Beech Developments (Manchester) Limited & Ors v The Commissioners for HMRC
[2024] EWCA Civ 486
Beech Developments (Manchester) Limited & Ors., R (on the application of) v Commissioners for HMRC
28 April 2023
[2023] EWHC 977 (Admin)
High Court
Companies didn't pay taxes they owed under a construction scheme. The tax authority said they couldn't get a reduction because they'd already been assessed. The court agreed, but let them appeal the decision.
Key Facts
- •Claimants (6 companies) failed to deduct amounts due under the Construction Industry Scheme (CIS) from payments to a subcontractor.
- •HMRC issued Liability Determinations for the unpaid amounts.
- •Claimants argued that Non-Liability Directions should have been considered under regulations 9(3) and 9(4) based on the Carefulness-Basis and Collection-Basis.
- •HMRC refused, stating that the prior Liability Determinations precluded Non-Liability Directions under Regulation 13(3) (the Interrelationship Provision).
- •The case concerns the interpretation of Regulation 13(3), specifically whether a prior Liability Determination prevents a subsequent Non-Liability Direction.
Legal Principles
Interpretation of Regulation 13(3) of the Income Tax (Construction Industry Scheme) Regulations 2005 (the Interrelationship Provision)
Income Tax (Construction Industry Scheme) Regulations 2005
Public law duties of lawfulness, reasonableness, and fairness apply to HMRC's decisions.
Common law principles of judicial review
HMRC has the power to withdraw a Liability Determination.
Commissioners for Revenue and Customs Act 2005, section 5
Presumption against double taxation or double recovery.
Common law principles of tax law
Outcomes
Claim for judicial review dismissed.
The court held that HMRC's interpretation of Regulation 13(3) was legally correct. A prior Liability Determination precludes a subsequent Non-Liability Direction. While acknowledging potential for abuse, the court relied on the availability of judicial review to address unlawful HMRC actions.
Permission to appeal granted.
The court granted permission to appeal on the ground that it wrongly interpreted Regulation 13(3) as precluding a subsequent Non-Liability Direction.
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