Compliance: Regulation 13 determinations: appeals: evidence
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Evidence at an appeal hearing
In a case where HMRC is arguing that payments were made gross to someone who was not entitled to be paid gross, you should consider covering the following points at a hearing.
How did the contractor satisfy himself that payments could be made without deduction?
You need to enquire whether the contractor believed they did not need to verify the subcontractor perhaps because they had previously included them on a return within the current or previous two tax years.
Alternatively, the contractor may have gone through the verification process and simply chosen to ignore the instruction to make a deduction from the subcontractor, if necessary.
If payment was made to someone other than the subcontractor engaged to do the work, was that third party entitled to gross payment, that is, had they also been verified by the contractor.
Regular infringements of Scheme
If the contractor has a history of making gross payments to subcontractors who should be paid under deduction, you should make the Tribunal aware of this.