Penalty to take corrective action on follower notice

The taxpayer took part in a tax avoidance scheme and included details in his 2004-05 tax return. HMRC enquired into the return and issued a closure notice amending it to deny the tax advantage.

The taxpayer appealed pending the final outcome in Barnes v CRC [2014] EWCA Civ 31. After the Court of Appeal’s decision in that case ruling that the avoidance scheme failed HMRC issued the taxpayer an accelerated payment notice (APN) and a follower notice. It told him that if he did not take corrective action within 90 days he would be liable to a penalty. This required the taxpayer to take all necessary action to enter into a written agreement with HMRC to relinquish the denied advantage. Then he had to tell HMRC that he had taken this step state the amount of the denied advantage and if different the additional tax...