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It was not ‘reasonable in all the circumstances’ not to take corrective action

By Mark McLaughlin, July 2021

The Upper Tribunal overturned the First-tier Tribunal’s decision in the taxpayer company’s appeal against a penalty notice for not taking corrective action in response to a follower notice but reduced the penalty rate.  

The respondent company participated in a stamp duty land tax (SDLT) avoidance arrangement involving the purchase of a property in August 2011. No SDLT was paid on the property purchase. HM Revenue and Customs (HMRC) opened an enquiry into the land transaction return. Subsequently, other cases were heard by the First-tier Tribunal (FTT) about similar schemes. The scheme was found not to work. HMRC treated a decision released in February 2017 as the final judicial ruling relevant to the arrangements. 

In September 2017, HMRC sent the company a follower notice

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