Corrective action not taken by the specified date

The taxpayer appealed against penalties issued for his failure to take corrective action by the date specified in follower notices. He had participated in a scheme promoted by Montpelier which was defeated in the courts. After receiving the follower notice he contacted Montpelier on whom he said he relied to provide him with tax advice. He said he did not understand what corrective action required and was confused by the notices.

The First-tier Tribunal did not find it ‘objectively reasonable’ for the taxpayer to say he took no corrective action because the notices confused him and that he thought they related only to National Insurance. The judge said the letter sent with the follower notices were ‘abundantly clear’ about the taxes they covered the action required by the recipient and the consequences of his failing to do so. ‘The reasonable taxpayer endowed with all the appellant’s characteristics’ would not have...