The Oaks (Gatley) Limited v The Commissioners for HMRC
[2024] UKFTT 594 (TC)
Gallagher's Windows, Doors & Conservatories Ltd v The Commissioners for HMRC
10 August 2023
[2023] UKFTT 706 (TC)
First-tier Tribunal
A company didn't pay the right taxes for its subcontractors. The tax authority said they owed money. The company tried to appeal, but the court said they couldn't because they missed the chance to appeal earlier. They need to try a different legal process to challenge this.
Key Facts
- •Gallagher's Windows, Doors & Conservatories Ltd. (Appellant) failed to include subcontractor payments in monthly CIS returns and did not make CIS deductions.
- •HMRC issued determinations totaling £51,279 for under-deductions from 2013-2017.
- •Appellant claimed relief under reg. 9(4)(Condition B) of the CIS Regulations, arguing subcontractors paid tax on gross receipts.
- •HMRC refused relief, and the Appellant appealed, arguing unjust enrichment.
- •The appeal centered on whether there's a right of appeal against a refusal to make a direction under reg. 9(5) when reg. 9(4)(Condition B) isn't met.
Legal Principles
CIS requires contractors to deduct tax from subcontractor payments and file returns (Section 61, Finance Act 2004).
Finance Act 2004, Section 61
HMRC can issue determinations to recover under-deducted CIS tax (reg. 13(2), CIS Regulations).
Income Tax (Construction Industry Scheme) Regulations 2005, reg. 13(2)
HMRC may grant relief from CIS tax liability if the subcontractor paid tax (reg. 9(4)(Condition B), CIS Regulations).
Income Tax (Construction Industry Scheme) Regulations 2005, reg. 9(4)
There is no right of appeal against HMRC's refusal to grant relief under reg. 9(4)(Condition B).
Case law (Ormandi v HMRC [2019] TC 07442, North Point (Pall Mall) Ltd. & Anor [2021] TC 08205, R (on the application of Beech Developments (Manchester) Ltd. & Ors) v HMRC [2023] EWHC 977 (Admin))
The First-tier Tribunal has no jurisdiction to review HMRC's decisions under reg. 9(4)(Condition B); judicial review is the only avenue.
Tribunals, Courts and Enforcement Act 2007
Outcomes
The Appellant's appeal was dismissed.
The Tribunal lacks jurisdiction to hear appeals against HMRC's refusal to grant relief under reg. 9(4)(Condition B). Once a reg. 13 determination is issued, it cannot be challenged under reg. 9(5).
Similar Cases
Beech Developments (Manchester) Limited & Ors v The Commissioners for HMRC
[2024] EWCA Civ 486
Evancast (Kent) Limited v The Commissioners for HMRC
[2024] UKFTT 1045 (TC)
Beech Developments (Manchester) Limited & Ors., R (on the application of) v Commissioners for HMRC
[2023] EWHC 977 (Admin)
Access Contracting Services Ltd v The Commissioners for HMRC
[2023] UKFTT 973 (TC)