Government fines 30,000 firms for failing to report supply chain details on time

Almost one-fifth of contractors have been hit with government fines since November for failing to lodge supply chain details on time.

Up to May, HM Revenue & Customs issued 800,000 penalty notices to 30,000 contractors who did not comply with the new Construction Industry Scheme (CIS).

The fines are incurred each month that a contractor fails to provide information about the subcontractors it has used and how much they were paid. The system aims to ensure all parts of the supply chain are paying the required levels of tax.

HMRC said around half of the fines issued were cancelled and a further 125,000 dropped after appeal. Around 350,000 fines are still due.

Around 12,000 contractors have also been stripped of their gross payment status, though 4,500 successfully appealed the decision.

A spokesperson for HMRC said: “The first year of the new compliance test was always expected to expose a significant number who were not taking their obligations seriously.”

He said 85% of CIS returns were now received on time and more than 95% received eventually.