In Miroslaw Pawlikowski v HMRC [2020] TC7584, the First Tier Tribunal (FTT) dismissed the taxpayer’s appeal against HMRC’s denial of tax credits for 2016/17 in respect of certain CIS deductions. The taxpayer failed to keep adequate records to support his claim.

Based on section 50(6) of the Taxes Management Act 1970, the onus is on the taxpayer to substantiate a claim for Construction Industry Scheme (CIS) deductions on appeal to the Tribunal.

On appeal to the FTT:

The FTT dismissed the taxpayer’s appeal as their submissions did not evidence the CIS deductions claimed. In particular

The FTT also concluded that as it has no general judicial review function. It has no jurisdiction to judge whether the approach taken by HMRC was unfair. HMRC acknowledged that sometimes contractors do not issue CIS deduction statements but this does not remove the need for sub-contractors to keep accurate records which support accurate tax returns.


CIS: Contractors and Subcontractors
What is the Construction Industry Scheme? Who does it apply to? How does it work? 

CIS: Construction Industry reverse charge
The Construction Industry Scheme (CIS) VAT Domestic Reverse Charge (DRC) applies to supplies of construction services from 1 March 2021.

How to appeal an HMRC decision
What type of decision can you appeal? What are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External link

Miroslaw Pawlikowski v HMRC [2020] TC7584