Effect on future trade

The taxpayer was a roofing contractor who appealed against a decision by HMRC to cancel his gross payment status under the construction industry scheme. The department said its reason was the taxpayer’s failure to pay his self assessment tax for 2010/11 on time meaning he did not pass the compliance test.

He claimed had been working away from home and “simply overlooked making the payment sooner”. He accepted this was not a reasonable excuse but added that the withdrawal of gross payment status would probably lead to his bankruptcy and to the necessity of laying off the subcontractors he employed because he was subject to an individual voluntary arrangement (IVA).

The Revenue told the taxpayer he would be able to continue working in the construction industry without the gross payment status and said the “possible effect on future trade is not relevant”.

The First-tier Tribunal was...