The client

A large construction company specialising in groundworks asked K3TA to support them with a HMRC CIS enquiry.

Our involvement

Our team were brought in to support with the enquiry part way through where HMRC had narrowed their focus to the payments the client had made to its sub-contractors and the CIS withheld from sub-contractors providing plant.

Unfortunately, the client had failed to withhold CIS on the element of the invoice relating to plant owned by the sub-contractor. This had led to errors in the amount of CIS under-deducted of over £400,000 over a period of 6 years. HMRC’s were looking for the client to pay the full amount of under-deducted tax, plus interest and penalties.

The outcome

Following our work to mitigate and negotiate the exposure, a settlement was eventually agreed at a substantially reduced sum of below £100,000 from the original £400,000 HMRC were.