Late CIS returns

Reliability of evidence of submission

The taxpayer was a small business in the construction industry. It was not registered for gross payment so had to deduct tax at 20% from payments to subcontractors. It retained an accountant to prepare its construction industry scheme monthly returns.

HMRC imposed penalties of £7 680 under FA 2009  Sch 55 because it said 13 returns had been submitted late between November 2014 and September 2016. The taxpayer appealed.

The First-tier Tribunal accepted that the taxpayer had submitted returns on time for the periods May 2015 to November 2015 and June 2016. The judge was satisfied that the taxpayer’s evidence was more reliable than HMRC’s. This was because the taxpayer had produced screenprints from its own system and receipts for returns from HMRC that were more detailed than those produced by the department. The penalties for these returns were cancelled.

However the taxpayer could...