The taxpayer’s failure to take corrective action in respect of a follower notice was held to be reasonable in the circumstances and his appeal against a follower notice penalty was allowed.
The appellant entered into a tax avoidance scheme in 2006/07. The effect on his tax return was that a tax repayment of £949 became a repayment of £261,038. However, the scheme was subsequently held not to work. HM Revenue and Customs (HMRC) opened a tax return enquiry for 2006/07 in October 2008 and confirmed that no repayment would be made until the enquiry was completed because most of it related to the avoidance scheme.
In December 2014, HMRC sent a follower notice and an accelerated payment notice (APN) to the appellant. The APN stated that the amount of the accelerated payment was £260,089. The follower notice explained the corrective action required.
Following communications between
