What is the penalty for not registering for CIS?

Based on the sources retrieved, the available materials do not contain a single, specific statutory penalty provision for failing to register for CIS (as distinct from other CIS penalties). However, the sources do reveal two relevant consequences/penalties depending on the party involved. Here is what can be confirmed from the retrieved sources:

HMRC Guidance / Practice

For subcontractors who fail to register:

The practical consequence of a subcontractor not registering for CIS is that contractors are required to deduct tax at the higher rate from all payments made to that subcontractor.

Specifically, where HMRC cannot verify a subcontractor, "the contractor will be instructed to make a deduction at the higher rate from all payments to the subcontractor."

For false statements made in connection with CIS registration:

Under s.72 Finance Act 2004, a penalty of "not exceeding £3,000" can be charged where a false statement or document is provided in connection with a CIS registration application. From April 2021, this penalty can also be charged to another person (e.g. an agent, director, or company secretary) who exercises influence or control over the person registering.

Important Limitation

I could not find an authoritative source in the available materials for a specific standalone penalty for simply failing to register as a contractor for CIS. The CIS penalty provisions retrieved relate primarily to:

• Late filing of CIS monthly returns (FA09/Sch 55)
• Late payment of CIS deductions (FA09/Sch 56)
• False statements on registration applications (s.72 FA 2004)

For a complete answer on contractor registration penalties, you may wish to consult:

• FA 2004, Part 3, Chapter 3 directly
• HMRC's Construction Industry Scheme Reform Manual (CISR), particularly sections dealing with contractor obligations
• HMRC's CIS340 guide for contractors and subcontractors