It was not reasonable in the circumstances for the appellant not to have taken corrective action in response to a follower notice, but the penalties for failing to take the corrective action were reduced due to the appellant’s cooperation in the provision of information.
The appellant participated in a tax avoidance scheme in the tax years 2006/07, 2007/08 and 2008/09. HM Revenue and Customs (HMRC) opened enquiries into the returns submitted by the appellant for those tax years. HMRC subsequently issued closure notices in 2009 and 2011 for each of those three tax years increasing the appellant’s liability to both income tax and National Insurance contributions. The appellant appealed (through the scheme advisers).
The appeal was put on hold pending the outcome of the appeal in Huitson v Revenue and Customs [2015] UKFTT 488. That appeal was finally determined on 23 January 2016. In HMRC’s view, it therefore became a judicial ruling