T Arden Ltd v Revenue & Customs (INCOME TAX/CORPORATION TAX : Sub-contractors in the construction industry)

CONSTRUCTION INDUSTRY SCHEME - penalties for late filing of returns - the director of the appellant Company believed that �project management� services provided by the Company did not fall within the CIS and that there was no obligation to deduct tax from payments made to sub-contractors or file monthly returns - whether the appellant Company had a reasonable excuse for its failures - no - appeal dismissed

This is an appeal by T Ardern Limited (�the appellant�) against a decision of the Respondents (�HMRC�) dated 3 July 2018 refusing a claim under Regulation 9(3) (Condition A) of the Income Tax (Construction Industry Scheme) Regulations 2005 (�the CIS Regulations�). The refusal resulted in an amount of �405 (�192 falling in the tax year 13-14 and �213 falling in the 14-15 tax year) becoming chargeable for non-declared CIS liability.

The appellant company also appeals penalties of �3,671 imposed by HMRC under Schedule 55 Finance Act 2009 for its failure to make monthly returns by the due dates under the CIS for various periods between 6 April 2012 and 5 November 2014.

i. ��Whether the appellant took reasonable care to comply with s 61 of the Finance Act 2004 to make deductions from contract payments made by the company to sub-contractors engaged by it, and

ii. Whether the appellant has a reasonable excuse for the failure to submit CIS returns.