With less than two months until the Construction Industry Scheme (CIS) penalties come into force on 19 October, Access Accounting is warning contractors filing paper-based returns to ensure their manual systems are adequate or face fines from HM Revenue & Customs of up to £3000.

Kevin Misselbrook, customer services director at Access Accounting, commented: "Contractors employing manual processes have to contend with a number of problems including incorrect information being entered onto the form, such as adding sub-contractors details on nil returns or entering information in the wrong format.

"There have also been instances where the wrong forms have been used so one month's return is on another month's pre-printed form, the subcontractors and payments listed have not being included, or returns have been received without signatures. These could lead to penalties once the honeymoon period comes to a close. What's more, from this date, any outstanding returns from the last six months will also incur fines."

Due to the online verification process, such errors are unlikely to occur where companies have implemented an appropriate software solution. Automated systems will also lessen the burden on the administration process as online returns will save time and effort.

"Contractors will need to check their submissions carefully which could be very time consuming, depending on the number of subcontractors they employ. Whilst we're not implying that implementing a software system is the best route for every contractor, for many companies it will certainly guard against unnecessary mistakes and incurring the associated penalties," Kevin concluded.