Miss the 31 January filing deadline and HMRC charges you £100 automatically — even if you owe nothing. After that, penalties stack up quickly: daily fines, percentage-based charges, and interest. Worst case, you could face a tax investigation. And most CIS subcontractors who haven't filed are actually owed a refund. Not filing doesn't just cost you in penalties — it means you're leaving your own money sitting with HMRC.

The Penalty Timeline

This is what happens when you miss the 31 January Self Assessment deadline:

Day 1 (1 February)

£100 automatic penalty — even if you owe no tax, even if you're due a refund. This penalty is issued automatically by HMRC's system. No warning, no grace period.

3 months late (1 May)

£10 per day for up to 90 days. That's an additional £900 on top of the initial £100. Your total penalties are now up to £1,000.

6 months late (1 August)

£300 or 5% of the tax due (whichever is greater). If you owe £4,000 in tax, that's an extra £300. If you owe £10,000, it's £500.

12 months late (following January)

Another £300 or 5% of tax due (whichever is greater). In serious cases where HMRC suspects you're deliberately withholding information, this can rise to 100% of the tax due.

The total damage

And that's before interest charges, which run from the original due date.

Interest on Late Payments

If you owe tax and don't pay it by 31 January, HMRC charges interest from that date. The current late payment interest rate is the Bank of England base rate plus 2.5%. On top of that, you face late payment surcharges:

• 30 days late: 2% of outstanding tax
• 6 months late: Additional 2%
• 12 months late: Additional 2%

So if you owed £5,000 and didn't pay for a year, you'd face the surcharges (around £300) plus daily interest.

What Most People Don't Realise

The cruel irony: most CIS subcontractors who haven't filed are owed a refund, not a tax bill.

If 20% has been deducted from your pay all year but you haven't filed a return, that money is sitting with HMRC. They won't send it back automatically — you have to claim it through Self Assessment.

So by not filing, you're:

1. Getting hit with penalties you don't need to pay
2. Losing your own refund money (potentially thousands of pounds)
3. Building up stress and a bigger problem for later

Every year you don't file is another year of penalties AND another year of unclaimed refund.

Can HMRC Investigate Me?

Yes. If you repeatedly fail to file, HMRC can:

• Issue a determination — They'll estimate how much tax you owe (usually more than you actually do) and demand payment
• Open a compliance check — A formal investigation into your tax affairs
• Issue a tax assessment — Based on information from your contractors' records (HMRC already knows roughly how much you earned because your contractor reports it)
• Take enforcement action — In extreme cases, this includes debt collection, county court judgements, and even making you bankrupt

HMRC already has data from your contractors' monthly CIS returns showing how much they paid you and how much CIS tax they deducted. Not filing your return doesn't hide your income — it just means you're not claiming back what you're owed and you're racking up penalties.

"I Haven't Filed for Years — What Do I Do?"

This is more common than you'd think. Plenty of construction workers go years without filing because they think they'll be in trouble. The longer you leave it, the worse it gets — but the solution is always the same: file now.

Your action plan:

Step 1: Don't panic

HMRC is generally more reasonable when you come to them proactively rather than waiting for them to come to you. "Voluntary disclosure" is always better than being caught.

Step 2: Work out what you owe (or what you're owed)

For each year you haven't filed, you need to calculate your income, expenses, and CIS deductions. Our calculator can give you a quick estimate.

Step 3: File all outstanding returns

You can go back 4 years to claim CIS refunds. For years before that, you can't claim a refund but you may still need to file to clear penalties. Our guide on how to claim your CIS tax refund walks you through the filing process step by step.

Step 4: Appeal penalties where possible

If you have a "reasonable excuse" for late filing (serious illness, bereavement, exceptional circumstances), you can appeal. HMRC accepts appeals through their online system.

Step 5: Set up a payment plan if you owe money

If you owe tax plus penalties and can't pay in one go, HMRC offers "Time to Pay" arrangements — typically 6-12 months of monthly payments.

Reasonable Excuses That HMRC Accepts

HMRC may cancel penalties if you had a genuine reason for filing late:

• Serious illness or hospitalisation
• Death of a close family member
• Unexpected hospital stay
• HMRC's own service was unavailable (online system down)
• Postal delays or loss (for paper returns)
• Fire, flood, or natural disaster affecting your records

Not accepted as reasonable excuses:

• "I didn't know I had to file"
• "I was too busy"
• "My accountant didn't remind me"
• "I lost my paperwork"
• "I couldn't afford an accountant"

Contractor Penalties (If You Hire Subcontractors)

If you're a contractor who hasn't filed monthly CIS returns, the penalty structure is different but equally painful:

• 1 day late: £100 per return per 50 subcontractors
• 2 months late: Additional £200
• 6 months late: £300 or 5% of CIS deductions due
• 12 months late: Additional £300 or 5%

Miss multiple months and penalties compound rapidly. A contractor with 10 subcontractors who misses 6 months of returns could face thousands in penalties.

The Bottom Line

Filing late costs you money. Not filing at all costs you more — in penalties AND in lost refunds. The best time to sort it out was when it was due. The second best time is right now.

Step one: find out what you're owed. Use our free CIS tax refund calculator — it takes under a minute and might show you that HMRC owes you more than you think.

→ Calculate My CIS Refund

Related Guides

• CIS Tax Return Deadlines — Every filing and payment date so you never miss a deadline again
• How to Claim Your CIS Tax Refund — Step-by-step guide to filing your return and getting your money back
• How Long Does a CIS Refund Take? — Processing times after you file and how to speed things up

Frequently Asked Questions

Will I go to prison for not filing a CIS tax return?

Not for simply filing late. Criminal prosecution is reserved for deliberate tax evasion — actively hiding income or claiming false expenses. Honest mistakes and late filing result in financial penalties, not criminal charges.

Can I claim a CIS refund for previous years?

Yes. You can file Self Assessment returns and claim CIS refunds for up to 4 previous tax years. So in 2025/26, you can still claim for 2021/22, 2022/23, 2023/24, and 2024/25. Find out how long the refund process takes once you file.

What if HMRC contacts me before I file?

Respond promptly and cooperate. It's still better to engage and file late than to ignore HMRC correspondence, which can escalate the situation.

Can penalties be more than the tax I owe?

Yes. If you owe zero tax but file a year late, you'll still face £1,600+ in penalties. This happens regularly to CIS workers who are owed a refund but haven't filed.

Last updated: November 2025. Penalty amounts are based on current HMRC Self Assessment penalty regime. The new MTD points-based penalty system applies from April 2026 for those within MTD.