CBL Cable wins CIS certification appeal

Medium-sized electrical contractor CBL Cable Contractors has successfully appealed in the Chancery Division against the refusal of its CIS certificate. The Hartlepool-based firm defeated the Inland Revenue’s zero-tolerance stance.

The firm won on the basis of the definition of its failure to meet its CIS obligations being "minor and technical".

The Revenue successfully objected to the granting of a CIS5 certificate to CBL in 1999, but then relented and the certificate was granted. This expired in 2002. The Revenue refused to renew the certificate, citing late payment of corporation tax, PAYE, National Insurance, CIS demands and late submission of self-assessment returns. CBL appealed, successfully, to the General Commissioners. The Revenue appealed this decision and lost in the Chancery Division a fortnight ago.

The court found: "The words ‘minor and technical’ had to be construed in their context."

In the context of CBL, which had been taken over by another firm in 2000 (possibly contributing to the failures), the infringements were minor and technical and therefore its certificate could not be refused.

However, Birmingham-based electrical contractor Lightpower (a small firm exempt from providing audited accounts) lost its certificate the day before CBL’s success.

Lightpower’s request to renew its certificate was refused on the basis that throughout the previous qualifying period all its payments were late. The firm successfully appealed to the commissioners, but the Revenue successfully appealed that decision and Lightpower’s certificate was quashed a fortnight ago.

Lightpower was unavailable for comment as CJ went to press.

Kathryn Hiddleston, head of construction at Grant Thornton, has spotted a possible trend: "Every case ruling must be found on its facts and we do not have the full details of these cases, but it would be a very worrying trend if larger organisations were to be given more leeway in the interpretation of their compliance requirements than smaller entities."

She added: "It is not yet clear whether the Revenue is concentrating on the easy wins against small firms or that there are a number cases with larger firms pending arrival in court."