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Flemming & Son Construction (West Midlands) Ltd v HMRC

In Flemming & Son Construction (West Midlands) Ltd v HMRC (TC01900 – 29 March) a company (F) operated the construction industry scheme. HMRC formed the opinion that in accounting for tax under the scheme it had overstated the amounts of the payments it made which represented the cost of materials and had therefore not deducted sufficient tax from the payments it made to its contractors. They issued determinations under SI 2005/2045 reg 13 to recover the tax. The First-tier Tribunal dismissed F’s appeal against the determinations. Judge Poole observed that FA 2004 s 61(1) required a deduction to be made from all payments made to subcontractors except for ‘any part of the payment which is shown to represent the materials cost’. He held that ‘the word "shown" in this context connotes the satisfactory demonstration by appropriate evidence of the relevant facts...

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