Mr K G & Mrs H E Johnston (Johnston Builders) v Commissioners for Her Majesty's Revenue and Customs
Decision date: 11 May 2010
Neutral citation: [2010] UKFTT 212 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This is an appeal by Johnston Builders against HMRC Regulation 13 CIS determinations totaling £834.84 for tax HMRC say should have been deducted from payments to a sub-contractor (Mr N) for 2004–07. The Tribunal found the Johnstons were contractors, Mr N was a sub-contractor, the Appellants did not operate CIS or make the required deductions/returns, and they failed to satisfy Regulation 9 conditions (reasonable care and proof the sub-contractor paid the tax). The appeal was dismissed and HMRC was entitled to recover £834.84.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The Tribunal’s decision indicates that where a contractor fails to operate CIS and make required deductions, HMRC may issue Regulation 13 determinations to recover amounts that should have been deducted, and that ignorance of the CIS regime or of legal obligations does not satisfy the “reasonable care” requirement for relief under Regulation 9.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The notes record the Tribunal’s observations that HMRC’s earlier non-notification or delay about small amounts does not absolve contractors of statutory CIS duties, and that cooperation with HMRC can secure relief where the sub-contractor has in fact paid the tax; these points were not essential to the holding.