This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Company Failed To Take Reasonable Care To Comply

By Mark McLaughlin, May 2017
A contractor was liable to pay income tax under-deducted from payments to subcontractors, as reasonable care had not been taken to comply with the construction industry scheme legislation.

The appellant contractor made payments to subcontractors, but failed to make construction industry scheme (CIS) deductions from payments to the subcontractors for a range of payments for materials that included vans, fuel and tools, and the use of plant and machinery owned by the subcontractors, resulting in a tax liability for the tax years 2010/11 to 2014/15 inclusive of £21,816.

Following a review of subcontractor invoices, HM Revenue and Customs (HMRC) stated that unless the appellant, as contractor, was able to satisfy itself that the subcontractor had hired in the machine/plant and had incurred additional costs for doing so, no amount could be excluded from CIS deductions (for ‘net payment’ subcontractors), because no
Subscribe to the McLaughlin’s Tax Case Library to get instant access
to the Tax Case Library.
14 day free trial , 90 day money back guarantee
Subscribe

Related or similar articles

Tribunal erred in allowing appeal against HMRC’s withdrawal of gross payment status
By Mark McLaughlin, May 2022
Deductions partly disallowed in the absence of sufficient proof
By Mark McLaughlin, June 2020
Cumulative Effect Of Several Circumstances Amounted To Reasonable Excuse For Late Returns
By Mark McLaughlin, December 2017
HMRC Is Not Required To Consider Financial Effect Of Cancelling Gross Payment Registration
By Mark McLaughlin, March 2017
Workers Were Not All Subcontractors
By Mark McLaughlin, April 2016