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Information about professional advice was not reasonably required by HMRC to determine if penalties were due

By Mark McLaughlin, September 2021

Information requested by HMRC, including professional advice obtained by the appellant company about a failed tax avoidance scheme, was not reasonably required to determine whether the company failed to take reasonable care to prevent a tax return inaccuracy. 

The appellant company implemented tax planning arrangements with the assistance of tax specialists (C) and a remuneration consultant (H) in the tax year 2009/10. These types of arrangements (Clavis Herald arrangements), and this type of arrangement involving an employer contribution to establish an employee benefit trust (EBT), was the subject of the decision in RFC 2012 Plc v Advocate General for Scotland [2017] UKSC 45. 

The appellant entered into Clavis Herald arrangements, and some £1.3 million of the company’s funds were paid

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