Penalty imposed for failure to comply with notice

The taxpayer was part of an informal group of companies based in the Isle of Man and acted in relation to tax avoidance schemes used by UK contractors and sub-contractors. The details of its activities were unclear but they included marketing avoidance schemes on behalf of the group companies and designing and implementing at least one scheme. HMRC opened enquiries into the company’s returns and issued an information notice in February 2018. The company failed to comply with the notice until December 2019 when it sent some of the documents required. But it was not until August 2021 that it submitted other items. HMRC had previously issued fixed and daily penalties but it also applied to the Upper Tribunal to impose a penalty under FA 2008 Sch 36 para 50

The Upper Tribunal first had to consider whether HMRC had reason to believe that as a result of...