Jurisdiction(s):
United Kingdom

FTT (Tax) upholds barring order against HMRC for serious procedural breaches; refuses stay behind TAAG lead cases; summarily allows Carbon Six Engineering's MSC appeal

Published on: 11 February 2026

Published by a LexisNexis Tax expert

Legal News

Article summary

Carbon Six Engineering Ltd v HMRC [2026] UKFTT 177 (TC)

In 2022, HMRC issued determinations pursuant to regulation 80 of the Income Tax (Pay As You Earn) Regulations 2003 (SI 2003/2682) and section 8 of the Social Security (Transfer of Functions) Act 1999, in respect of income tax and National Insurance contributions (NICs) it considered due from the appellant, Carbon Six Engineering Ltd. The accompanying letter, notifying the issue of those determinations, asserted that the additional tax and NICs arose because the appellant was a managed services company (MSC), and identified its managed services company provider (MSC provider) as Churchill Knight & Associates (CKA). In truth, the appellant had never entered into any contract with CKA or otherwise engaged with it. It had, however, dealt with The App Accounting Group (TAAG), which HMRC also believed to be a MSC provider. Although HMRC did not formally acknowledge the erroneous reference to CKA, the mistake was corrected in correspondence between the parties on 27 October 2022. The company appealed the determinations to the First-tier Tribunal (FTT). Subsequently, HMRC failed to comply with several FTT directions within the required timescales and, in certain instances, did not comply at all...

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