Amendments 308 to 311 relate to paragraph 13 of schedule 55, which provides for fixed sum penalties incurred by persons who fail to make a first construction industry scheme return by the due date to be capped at £3,000. The purpose of the cap is to prevent disproportionate results from an accumulation of fixed sum penalties if someone is late joining the CIS, which has monthly return filing obligations. The cap is a response to concerns expressed about the current CIS penalty regime, and the four amendments are designed to ensure that the taxpayer protection works as intended. It is more generous than what was in the Bill as originally published, and I believe that it has been welcomed by the industry.
Amendment 308 makes it clearer that the provision applies only during periods starting from when a person should have made the first return under the CIS, so a person who has been making returns in the scheme for several months and then stops making returns, even for a prolonged period, would not be subject to the cap.
Paragraph 13 of the schedule caps only the fixed sum penalties but does not restrict tax-geared penalties, even if they are the minimum value of £300, where no payment is due. Therefore, for those who have very small or nil liabilities, but who still need to make a CIS return, the protection of the cap was not as generous as intended by the Government. Amendments 309 and 310 disapply the minimum value of £300 for the tax-geared penalties where the cap applies.
Amendment 311 defines more clearly the circumstances in which the cap applies. It does so by refining the definition of earlier return to be those with a filing date earlier than when a first return is made, rather than when it is due to be filed. It corrects a technical deficiency in the drafting.
I believe that the amendments have been welcomed by industry and therefore ask the Committee to accept them.
Amendments made: 309, in schedule 55, page 400, line 34, leave out P is not liable.
Amendment 310, in schedule 55, page 400, line 35, after applies insert
(a) paragraphs 10(2)(b) and 11(5)(b) do not apply, and
(b) P is not liable.
Amendment 311, in schedule 55, page 400, line 37, leave out from first the to end of line 38 and insert
date on which P first made a return. (Ian Pearson.)