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HMRC have been investigating a number of complaints received relating to penalties incurred for the late filing of monthly construction industry scheme (CIS) returns.

HMRC have investigated a number of cases where contractors have claimed to have filed on time, but have subsequently been issued with a penalty notice. The conclusion drawn is that many contractors have put the wrong postage amount on the envelope when sending the returns in.

HMRC say they have examined the postmarks on the envelopes of some 300 returns that were delivered to the CIS Processing Office in the days immediately following 19 February. Although it appears that Royal Mail are not at fault, HMRC have observed that many contractors failed to put any postage on the envelope, did not pay sufficient postage for the size of the envelope sent, or simply posted them too late to have any realistic chance of reaching HMRC by 19th of the month.

A 34 pence first class stamp on the envelope does not cover the correct postage due for an A4 envelope that Royal Mail classes as ‘Large Letter’ post. The minimum postage to send a Large Letter envelope by first class post is 48 pence and returns weighing more than 100 grams will cost more than this.

Contractors intending to send their returns by first class post, but who do not pay the right postage, should be aware that these returns will be delayed within the Royal Mail postal system whilst they are surcharged and delivered separately. They are then much more likely to arrive at the HMRC CIS Processing Centre after the 19th when they will incur a late-filing penalty.