Harris Lipman News

Harris Lipman Wins Tax Case

06/11/2008

Harris Lipman have played a key role in winning a tax case crucial to the survival of a company in the construction industry.

The firm has just won a hearing before the General Commissioners of Income Tax – the body that hears appeals against decisions by HM Revenue & Customs (HMRC) – against HMRC’s attempt to withdraw gross payment status from the company, which operates under the Construction Industry Scheme. The scheme governs the way payments to subcontractors for construction work must be handled by contractors in the construction industry.

Barry Lewis, senior partner at Harris Lipman, said: “After a great deal of argument with the inspector representing HMRC, our arguments were accepted in full and the company was completely vindicated against the alleged breaches of the legislation, as set out by HMRC.

“If the appeal had failed, the loss of gross payment status would have involved the company having tax deducted at source from main contractor clients. This in turn would have meant a severe cash flow problem and probably the eventual closure of the company, with the loss of nearly 170 jobs.

“The loss of gross payment status would also have meant that the company would have been excluded from the tender lists of the major building companies in the UK, which provide a significant part of its total income.”

A spokesman for the company involved said: “It was all a tremendous success and we could not have achieved the result without Harris Lipman’s efforts and expertise.”