Regulation 9 direction may be made

The taxpayers were six related companies set up to carry out a specific construction project. They all made payments to another group entity BCPL but failed to operate the construction industry scheme. After an HMRC enquiry BCPL obtained gross payment status in August 2018. However HMRC issued determinations under reg 13 of the CIS Regulations for the years 2015-16 to 2018-19 on the sums that should have been deducted.

The taxpayers requested a direction under reg 9 on the basis that BCPL had paid all the corporation tax due on its profits so there was no loss of tax and HMRC should forego the CIS tax determined. HMRC refused citing that it was too late to apply for a reg 9 direction after determinations had been issued. It should have been done beforehand.

The taxpayers applied for judicial review. The judge found in favour of HMRC...