In Island Contract Management v HMRC [2015] UKUT 472 (28 August 2015) the UT found that deductions were due under the construction industry scheme (CIS) despite the fact that payments were made to a company established in the Isle of Man.
The issue was whether the UK company Island Contract Management (ICM) ought in order to comply with the CIS to have made deductions from the payments that it received from clients and transferred them to its parent company (IOM) which was established in the Isle of Man.
The UT upheld the FTT’s finding that the relationship between ICM and the clients was one of contractor and sub-contractor for CIS purposes. This was the intention of both parties when they contracted. Indeed clients contracted with ICM precisely because they wanted to pay for labour gross without having the burden themselves of making and...
