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What discretion does HMRC have when considering whether to cancel a CIS gross payment status? RICHARD SOWLER analyses the legislation and decided cases
KEY POINTS
- Can the tribunal review HMRC’s failure to mitigate penalties?
- More leeway if gross payment status is being cancelled.
- Does the appellant have a ‘reasonable excuse’?
- HMRC’s manual and the computerised review seem to omit discretion.
- Local compliance teams appear to occasionally use their discretionary powers.
The new style construction industry scheme (CIS) was introduced from 6 April 2007 just in time for the beginning of the credit crunch. It replaced the previous arrangements as explained in Iain Macleod’s article Blackballed! which dealt with the growing incidence of withdrawal of gross payment status.
Predictably in the economic climate the CIS is in difficulties – as indeed are many construction companies. The CIS is on the surface highly prescriptive; the word ‘must’ occurs...
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