Penalties for the late submission of construction industry scheme returns were reduced on appeal, and HMRC was invited to mitigate the penalties further.
The appellant was a self-employed gardener and landscaper. Between June 2008 and April 2009 (i.e. in his accounts to 31 May 2009) the appellant made payments to subcontractors falling within the construction industry scheme (CIS) ranging between £40 and £3,500, amounting to £6,158. The appellant did not realise the payments related to works that fell within the CIS, and therefore no monthly returns were filed.
Following an enquiry into the appellant's tax return for 2009/10, HM Revenue and Customs (HMRC) issued penalty determinations totalling £31,500, due to the appellant's failure to make the necessary CIS returns (although HMRC subsequently agreed to mitigate the penalty down to £3,083). The appellant appealed, on the grounds that: he had a
