Tax Compliance for Builders

7th October 2015

Removal of CIS Gross Payment Status: Financial consequences no longer relevant.
A recent HMRC appeal (CRC v J P Whitter) heard in the Upper Tribunal overturned a decision made by the First-tier Tribunal to reinstate gross CIS payment status on the grounds of it having a ‘significant detrimental effect on the business’. The Upper Tribunal allowed HMRCs appeal stating that a business “should retain his registration only if he continues to display an adequate track record” and in this case he did not.

This case reinforces the need for construction businesses with gross CIS payment status to have a ‘squeaky clean’ compliance record with HMRC and to keep up-to-date with all of its tax affairs. It should also be remembered that HMRC will also look at the directors personal tax affairs in deciding if a compliance breach has occurred for the purposes of CIS gross payment status.

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