In K Pitt v HMRC [2024] UKUT 21 (TCC) (22 January 2024) the Upper Tribunal (UT) dismissed the taxpayer’s appeal against penalties under the follower notice regime.
In 1999 the taxpayer (P) entered into arrangements involving the acquisition and disposal of loan notes which were relevant discounted securities and claimed an income tax loss of almost £700 000 for 1998/99. HMRC opened an enquiry and sought to disallow the loss. HMRC issued a follower notice on the basis that the principles and reasoning in the FTT decision in Audley v HMRC [2022] UKFTT 222 (TC) would if applied to P’s arrangements deny the tax advantage he was seeking. P chose not to take corrective action by amending his return to disallow the loss and so HMRC issued a closure notice to the same effect. HMRC also issued a penalty under the follower notice provisions.
The FTT dismissed P’s...
