CIS reasonable excuse: a game of 2 halves

A recently self-employed builder (Toby Turner) appealed against 22 penalties for late provision of monthly returns under the construction industry scheme (CIS).

He argued that he should get relief due to his ‘reasonable excuse’:  i.e. he had paid an accountant, who then failed to tell him to file monthly returns.

The First-tier Tribunal (FTT) found that neither his “ignorance of the obligation to submit such returns”, nor the previous accountants’ failure to inform him of the requirement amounted to a “reasonable excuse”, and therefore a penalty was due.

However for the months between August and October 2010, the tribunal decided that although HMRC was made aware of the failure to file returns in August 2010, they had not alerted the taxpayer of what he had to do until October 2010, so the penalty should be reduced.

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