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Construction industry scheme: Special purpose property development company payments were subject to the CIS

By Mark McLaughlin, August 2020

Payments by a company specially formed to facilitate property development to building contractors were under ‘construction contracts’ and the company was a person to whom FA 2004, s 59 applied as carrying on a business which included construction operations. 

The appellant company was formed in connection with the development of a property in Henley. Ownership of the property was in five separate parts: (1) one part (which was residential) by an individual (S); (2) another part (also residential) by another individual (M); (3) the other three parts by three private companies each owned by S and M (who were also the directors). 

In August 2015, the appellant and the five property owners entered into a development agreement in relation to the property (apart from those parts owned personally&

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