The appellant carried on business as a carpet and flooring contractor. B who owned 90% of the business and was the registered partner of the business applied for it to be registered for gross payment status under the construction industry scheme.
In 2009 HMRC withdrew gross payment status because tax had not been paid by the due date and the compliance test had therefore been breached.
The taxpayer appealed on the basis it had a reasonable excuse arguing that the tax had been paid late due wholly exceptional circumstances.
These were that the business was in a dire financial position caused directly by the economic downturn.
In early 2009 the business was almost wiped out with turnover falling by 68.65% for January and by 85.22% for February.
In addition although the partnership funds were inadequate to meet the tax liability as...
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