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First Choice Recruitment v HMRC

In First Choice Recruitment v HMRC [2019] UKFTT 412 (25 June 2019) the FTT found that the taxpayer was entitled to costs on the basis that HMRC had acted unreasonably (under the Tribunal Procedure (FTT) (Tax Chamber) Rules 2009 rule 10(1)(b)). 

The appeal concerned HMRC’s refusal to direct that First Choice was not liable to pay deductions which (in HMRC’s view) should have been paid under the Construction Industry Scheme. The issues were whether First Choice had taken reasonable care to verify the ‘gross payment status’ of a subcontractor; and whether First Choice’s view that the subcontractor had ‘gross payment status’ was due to an error made in good faith. 

First Choice had appealed against HMRC’s decision and HMRC had alleged fraud in its statement of case by reference to emails between the directors of First Choice which were never submitted. HMRC had withdrawn from the appeal and First Choice...

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