George Star Builders Limited v The Commissioners for HMRC
Decision date: 28 May 2026
Neutral citation: [2026] UKFTT 800 (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
George Star Builders Ltd appealed HMRC's refusal to give a Regulation 9 direction under the Construction Industry Scheme, arguing it had taken "reasonable care" to comply. The Tribunal found the company did not take reasonable care because its director, aware payments could have tax implications, paid subcontractors off the books and failed to consult or fully inform retained advisers. The appeal was dismissed and HMRC's refusal upheld.
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: medium
The Tribunal applied an objective "prudent and reasonable taxpayer" standard: where a taxpayer is aware that actions may have tax consequences, reasonable care normally requires taking steps to confirm treatment (for example by seeking advice or authoritative guidance), providing advisers with full facts, and following appropriate advice; retaining advisers but failing to consult or inform them undermines any claim to have taken reasonable care.
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 judgment reiterated that the required level of compliance systems is proportionate to the size and sophistication of the business, and that reliance on untested assumptions about tax treatment is insufficient to discharge the burden of showing reasonable care.