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
