United Kingdom Tax Tribunal Clarifies Income Tax Deductions From Subcontractor Payments Under Construction Industry Regime

The United Kingdom First-Tier Tax Tribunal May 28 issued Decision No. TC09900, clarifying income tax deductions from subcontractor payments under the construction industry regime (CIS). The taxpayer, a construction contractor, challenged the refusal by HM Revenue and Customs to relieve it of liability for failing to deduct tax from payments made to subcontractors. The taxpayer argued lack of knowledge of U.K. tax rules, and reliance on an accountant. On appeal, the Tax Tribunal found that: 1) the taxpayer had awareness that payments to subcontractors would have possible tax implications, given almost 20 years of experience, but failed to take steps ...