Kalinga Holdings Limited v The Commissioners for HMRC
Decision date: 11 March 2026
Neutral citation: [2026] UKFTT 368 (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
Kalinga Holdings appealed HMRC's refusal under regulation 9(5) CIS to relieve it of liability for under-deductions after Kalinga paid c.£1.45m to subcontractors without CIS deductions. The Tribunal accepted Kalinga genuinely believed CIS did not apply but found that belief was not formed after taking reasonable care because Kalinga relied solely on HMRC guidance (CIS340) despite project scale and warnings that specialist advice was needed. The Tribunal upheld HMRC's refusal and dismissed the appeal.
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
A taxpayer's genuine belief that CIS does not apply will not satisfy regulation 9(3)(a) unless that belief was formed after taking reasonable care; reliance on a single piece of HMRC guidance (CIS340) can be insufficient where the guidance is ambiguous, the contracting activity and sums involved are significant, and there are clear indicators that professional advice should have been sought.
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 Tribunal noted but did not decide that taxpayers may need to "read around the subject" (including Manuals and linked materials) when self-advising, and observed that later revision of guidance does not by itself prove earlier guidance was deficient.