he taxpayer failed to take corrective action in respect of a follower notice, but it was held to be reasonable in the circumstances for him not to do so and his appeal against a penalty for failing to take corrective action was allowed. 
 
The appellant participated in a tax avoidance scheme (‘working wheels’) during the tax year 2006/07. He included a loss of £500,174 in his tax return for 2006/07. He offset £372,344 of that amount against income in that year, generating a tax overpayment of £128,986. He carried back the balance of £127,830 against his income for 2005/06, generating an amount repayable of £51,139. 
 
HM Revenue and Customs (HMRC) did not repay either the £128,986 shown as overpaid for 2006/07, or the £51,139 claimed as repayable for 2005/06. In December 2008, HMRC opened an enquiry into his tax return for 2006/07 (under TMA 1970, s 9A).