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G Laithwaite (TC3879)
The taxpayer was a builder with a yearly turnover of between £17 000 and £25 000.
His accountant advised him to register for the construction industry scheme (CIS). He then employed subcontractors all of whom held certificates that allowed them to be paid gross. He did not complete monthly in the belief no tax had to be accounted for under the CIS.
HMRC issued three penalty notices for £41.13 £140 and £7 200 saying all payments whether gross or net should be reported under the scheme.
The taxpayer appealed insisting he had taken reasonable care to comply with TMA 1970 s 61 and had made a genuine error. He also claimed reasonable excuse on the ground he had relied on the advice of his accountant.
The First-tier Tribunal held that the taxpayer had reasonable excuse because he genuinely believed he was operating the...
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