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The taxpayer company was registered for gross payment under the construction industry scheme. The registration was withdrawn after the firm made several monthly PAYE payments after the due dates.
The company appealed, arguing the cancellation was disproportionate, would prevent the business tendering for contracts, and would result in a ceasing of trade.
The First-tier Tribunal agreed with the taxpayer: HMRC had not taken account of the financial implications on the withdrawal of registration.
The tribunal declined to follow the decision in Barnes v Hilton Main Construction Ltd [2005] STC 1532, which the Revenue argued was the authority in this case, and noted the cancellation provisions in FA 2004 were different from the the provision for the grant of a certificate under TA 1988.
The taxpayer’s appeal was allowed.
