CIS fixed penalties ruled disproportionate
Penalties of nearly £20,000 for a builder who filed 18 late tax returns are “harsh and unfair”, a tax tribunal has ruled in a setback for the Construction Industry Scheme (CIS) aimed at reducing tax evasion.
The first-tier tribunal (Anthony Bosher v HM Revenue and Customs, TC02307), ruled that although Bosher had no reasonable excuse for repeatedly filing monthly returns to HMRC giving details of all payments to sub-contractors under the Construction Industry Scheme, the taxman’s fixed penalties of about £19,000 on tax deductible from the returns of about £6,000 were “not merely harsh but are plainly unfair”.
Anthony Bosher, who has been registered with the CIS since 2007, said that he made all of his returns on time and did not receive any penalty notices until 22 June 2010. He claimed that HMRC’s penalties were “unjust".