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RF Farrow (TC4241)
A building contractor took on subcontractors in the years ended 5 April 2005, 2006, 2007 and 2008, without accounting for tax at source.
HMRC imposed penalties in October 2010 under TMA 1970, s 98A(2), for failing to make monthly returns as required under the Income Tax (Construction Industry Scheme) Regulations 2005.
The taxpayer appealed on the bases he had cooperated with the Revenue and the fines were excessive. The department offered to mitigate the total sanctions from £11,900 to £3,376.58.
The First-tier Tribunal noted the taxpayer had operated the construction industry scheme for several years and was aware of his responsibilities.
The principles in A Bosher v HMRC (UT [2013] UKUT 579) applied: the tribunal had no power to mitigate the penalties; the matter was entirely the concern of the taxman; the tribunal’s absence of power did not infringe the European Convention on Human Rights.
The fines were correct, and the taxpayer’s appeal dismissed.
