Late filing penalties under the Construction Industry Scheme are automatic charges that HMRC issues when a contractor's CIS300 monthly return is not received by the 19th of the month following each tax month.
The penalty ladder escalates with the length of the delay:
- 1 day late: £100 per return, charged automatically by HMRC.
- 2 months late: a further £200 penalty on top of the £100.
- 6 months late: an additional £300 or 5% of the CIS liability shown on the return, whichever is higher.
- 12 months late: a further £300 or 100% of the CIS liability, whichever is higher.
Each monthly return is treated as a separate return for penalty purposes, so a contractor who misses three consecutive months immediately faces three separate £100 charges. The reinstatement of nil returns from 6 April 2026 (they were removed in 2015) means contractors who assumed they had no obligation to file in quiet months are now accumulating penalties without realising it. Nil returns carry the same penalty ladder, though the 5% and 100% floors do not bite on a return with no underlying CIS liability.
A penalty can be cancelled if the contractor can demonstrate a reasonable excuse, such as a serious illness, bereavement or an HMRC system failure. Appeals must be made within 30 days of the penalty notice, either online or using form SA370. HMRC does not accept “I did not know I had to file” as a reasonable excuse.
Late payment of the deducted CIS (due by the 22nd electronically) attracts interest on top of the late-filing penalty, which is calculated separately. The CIS300 penalty ladder is distinct from the Self Assessment penalty ladder: never merge the two figures when advising a subcontractor who is also late with a Self Assessment return.
For the complete CIS penalty framework and appeal process, see CIS penalties and appeals: the complete guide. The nil-return obligation that reopened this penalty risk from April 2026 is explained at CIS nil return explained.