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An electrical contractor failed to deduct tax from payments he made to two subcontractors.
HMRC issued a determination under Income Tax (Construction Industry Scheme) Regulations 2005, reg 13, following an inquiry.
The taxpayer appealed, claiming the determination was excessive and that he had believed he was not required to deduct tax on the payments – although he now understood some tax was due.
He also asserted that the main contractor for whom he had worked was unreliable and had overstated the amounts he had received and those he made to the subcontractors.
The First-tier Tribunal accepted the taxpayer’s version of event and reduced the amount charged by the determination, to reflect the lower payments.
The taxpayer’s appeal was allowed in part.
