In Whispering Smith Ltd v HMRC [2022] UKFTT 165 (TC) (23 May 2022) the FTT dismissed the appeal by the taxpayer (WS) against penalties for failing to comply with follower notices (FNs). Applying the test and guidance in Haworth [2021] UKSC 25 enabled the FTT to determine that the Supreme Court (SC) decision in UBS [2016] UKSC 13 was a judicial ruling relevant to (i.e. which defeated the tax advantage from) WS's tax arrangements. The FTT also held that it had not been reasonable in all the circumstances for WS not to comply with the FNs on time. The FTT did however reduce the quantum of the penalties to reflect WS's level of co-operation.
WS had implemented a short-term equity deferral plan that reduced its PAYE payments. A similar tax arrangement had been found to fail in the SC’s decision in UBS. WS appealed against the FN penalties....
