No liability

Failure to make construction industry scheme deductions

The taxpayer was the director of two nursing homes. He wished to make improvements to one and entered into contracts with three construction workers to carry out the work. HMRC said he should have made deductions under the construction industry scheme when paying the contractors and imposed a penalty.

The First-tier Tribunal said this was a ‘strange’ case because had the nursing home company engaged the builders there would have been no liability on its part to make deductions in the same way as there is no liability on the part of a home owner when they pay for building work on their house. Further the invoices were issued to the nursing home rather than the taxpayer suggesting that he was ‘simply acting in his role as a director of the non-construction company’ that was receiving the services.

However ...