In HMRC v Comtek Network Systems (UK) Ltd [2021] UKUT 81 (TCC) (1 April 2021) the Upper Tribunal overturned the decision of the First-tier Tribunal (FTT) and reinstated a penalty on the taxpayer for failing to take corrective action following the issue of a follower notice (but reduced the penalty to reflect the taxpayer’s cooperation).
A follower notice and an accelerated payment notice (APN) were issued to the taxpayer in relation to a failed SDLT scheme. The FTT cancelled the penalty for the taxpayer’s failure to take corrective action in accordance with the follower notice because it agreed with the taxpayer that the failure was in accordance with FA 2014 s 214 (3)(d) ‘reasonable in all the circumstances’. The FTT reached this decision despite the fact that payment of the denied advantage (i.e. the tax in dispute) does not constitute corrective action even if the taxpayer genuinely...
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