Evancast (Kent) Limited v The Commissioners for HMRC
Decision date: 21 November 2024
Neutral citation: [2024] UKFTT 1045 (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 appeal concerned whether Evancast (Kent) Ltd (EL) took reasonable care under Regulation 9(3) of the CIS Regulations when it engaged Langdale & Goodfellow (LG) to provide payroll/agency services and whether LG was a subcontractor for CIS purposes. The tribunal found LG was a labour agency/subcontractor and that EL failed to take reasonable care, relying on inadequate documentary evidence and no specific professional advice. HMRC's refusal to grant relief under Regulation 9(5) was upheld and the appeal dismissed, with under-deductions totalling £927,586.59 identified.
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
Where a contractor with active involvement in construction and CIS experience outsources payroll/agency services that involve substantial sums, it must make further enquiries and obtain written assurances/documentation; mere reliance on advisers does not satisfy the reasonable care requirement unless there is evidence of specific, considered advice or inquiries.
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: high
The tribunal indicated (obiter) that HMRC is not obliged to provide individualized education beyond published guidance and that an error will be treated as made in good faith only if preceded by reasonable due diligence such as consulting guidance or obtaining specific professional or HMRC advice.
Warning
- none