This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Follower notice: Taxpayer not liable to penalty for failing to take corrective action

By Mark McLaughlin, July 2019

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).

Subscribe to the McLaughlin’s Tax Case Library to get instant access
to the Tax Case Library.
14 day free trial , 90 day money back guarantee
Subscribe

Related or similar articles

Information was not reasonably required to check the appellants’ tax positions
By Mark McLaughlin, May 2022
Appeal against penalties for failure to notify high income child benefit charge allowed
By Mark McLaughlin, July 2020
Online tax return filing notice was valid despite notification emails being assumed to be spam and deleted
By Mark McLaughlin, March 2020
Taxpayer’s ‘involuntary’ self-assessment registration was a special circumstance in late filing penalty appeal
By Mark McLaughlin, June 2019
HMRC’s Refusal To Grant Special Relief Was Unreasonable
By Mark McLaughlin, August 2015