In The Oaks (Gatley) Ltd v HMRC [2024] UKFTT 594 (TC) (4 July) the FTT dismissed the taxpayer’s appeal against determinations made by HMRC under The Income Tax (Construction Industry Scheme) Regulations SI 2005/2045 (‘the CIS regulations’) reg 13 charging it to tax on the amounts it should have deducted from payments made to sub-contractors. It also dismissed the taxpayer’s appeal against late filing penalties imposed pursuant to FA 2009 Sch 55.
The taxpayer (TOGL) accepted that it had failed to make deductions at source from amounts paid to a construction service provider Dreamspace Construction Ltd (Dreamspace) under the CIS regulations. However Dreamspace brought the amounts into account in calculating its own corporation tax liabilities. As such there was no net loss of tax. Regulation 9 of the CIS regulations provides that a HMRC officer ‘may’ direct that a contractor is not liable to pay...