Beech Developments (Manchester) Ltd and others v HMRC [2024] EWCA Civ 486 (9 May 2024) highlights a light on a potential mismatch between different parts of in the Income Tax (Construction Industry Scheme) Regulations SI 2005/2045. The CA decided there was nothing preventing HMRC reducing any determination of a CIS underpayment – for example on an ‘equitable’ basis to reflect the fact that there was no real loss of tax – and that HMRC should interpret the rules more broadly.
Regulation 9 of rules allows HMRC to forgo collection of any CIS duties where it is fair and reasonable to do so and reg 13 governs HMRC collection and enforcement of actual duties due. Unfortunately the case showed the two separate sets of rules do not work smoothly in tandem with each other.
Under reg 9 HMRC is able to forgo collection of CIS...