Q&A: The FA 2014 legislation on follower notices

What is the purpose of a follower notice?

In HMRC’s words the new rules ‘are designed to improve the rate at which tax avoidance cases are resolved where the point at issue has in HMRC’s view already been decided in another taxpayer’s case’. Under the new regime when HMRC has secured a ruling in a court or tribunal case which it considers would govern other open cases it can issue a follower notice (FN) in those cases.

What does HMRC need before it can issue a FN?

There are three main requirements:

• First there must be in existence an open tax enquiry or an open appeal. A FN cannot be used as a way to open a closed year or to raise an...