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The appellant company appealed against HMRC’s decision to withdraw its gross payment status for the construction industry scheme.
The company had been deregistered because it had failed the compliance test, having made ten late payments of PAYE.
The director of the company did not dispute the late payments but claimed reasonable excuse on the grounds of cashflow and personal injury.
He said that if the gross payment status were withdrawn the company would go out of business as the additional 20% deduction would adversely affect the company finances.
He said he had taken steps to ensure the company’s PAYE was paid in time in future as this was now paid by BACS.
The First-tier Tribunal said the director’s excuses did not constitute reasonable excuse. He could apply to have gross status reinstated after 12 months if he had been compliant.
The company’s appeal was dismissed.
