Tax advice that a company was not required to submit employment intermediaries returns and subsequent legal advice to that effect from counsel constituted a reasonable excuse for the late submission of those returns for penalty purposes.      

The appellant company provided cleaning services through the provision of workers (cleaners) to mainly corporate clients. It had operated a PAYE scheme since 2003 and registered as a contractor in 2010. The appellant sought professional tax advice prior to registration to establish their PAYE status issues and obligations.

HM Revenue and Customs (HMRC) notified the appellant that they intended to conduct a check of the appellant’s employer and construction industry scheme records. The appellant subsequently sought legal advice from counsel and was informed that the PAYE provisions were inapplicable, given the manner their cleaners provided services (i.e. the cleaners were not subject to, or subject to