In J P Whitter (Waterwell Engineers) v HMRC [2016] EWCA Civ 1160 (24 November 2016) the Court of Appeal found that a decision to cancel registration under the Construction Industry Scheme (CIS) did not have to involve the consideration of the implications for the taxpayer’s business.
J P Whitter was a small family-owned and operated company. In July 2009 the company failed an annual review for the first time because of late payment of PAYE and its registration was cancelled. The company appealed and its appeal was upheld but the letter allowing the appeal gave a clear warning that the rules would be interpreted strictly in the future. Despite this warning the company failed the two followings reviews and HMRC cancelled its registration after the third failure.
It was established that the loss of gross payment status would mean the loss of 63% of the company’s turnover...
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