Island Contract Management (UK) Ltd v HMRC

In Island Contract Management (UK) Ltd v HMRC (TC02622 – 4 April) an English accountant who lived in the Isle of Man incorporated a company (O) in 1991. In 1999 O incorporated a subsidiary company (IM). IM began to carry on business in the UK and to help construction workers to obtain work but did not register under the construction industry scheme. In 2001 IM incorporated a UK subsidiary (IK) which applied for and obtained registration under the scheme. In 2007 HMRC began an enquiry into IK’s returns. HMRC subsequently discovered that IK had made substantial payments to IM and formed the opinion that these had been made for the supply of subcontract labour and should have been treated as falling within the construction industry scheme. They issued determinations ...