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Follower notices upheld against ‘confused’ taxpayer


HMRC issued Michael Bentley penalties under section 208, Finance Act 2014 for failure to take corrective action in response to follower notices. Lucy Webb reports. 

7th May 2021
Tax Writer
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Bentley claimed that he was confused by the follower notices and accelerated payment notices but also admitted that he had not read them in detail and had followed the guidance of the scheme promoter. The First Tier Tribunal dismissed any such argument, but did find basis for a penalty reduction.

Between 2005/06 and 2007/08 Bentley participated in a tax mitigation scheme, which was promoted by Montpelier.

The scheme (which, incidentally, the FTT suspected was mis-sold to the taxpayer) was designed to mitigate his liability to income tax and National Insurance Contributions. In 2014, Montpelier advised Bentley to invest in certificates of tax deposit to cover the tax saved by the scheme.

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Replies (3)

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By Paul Crowley
07th May 2021 13:10

Love to read of a case where HMRC acted in an exemplary fashion.

Taxpayer warned on day 1 that likely to fail and still refused to follow the correct advice, relying on the failed scheme promoter's standard letters. Too bone idle to even read the HMRC correspondence.

'The taxpayer levied several criticisms against HMRC, and even involved his MP Dominic Raab while disputing the penalties under appeal. The FTT made it abundantly clear that there was nothing to justify those criticisms. HMRC had behaved in an exemplary fashion, not only when explaining to Bentley on numerous occasions what was required of him and how to avoid penalties, but also when responding to Raab.'

Thanks (2)
Replying to Paul Crowley:
By Hugo Fair
07th May 2021 14:24

Hen's teeth spring to mind.
But agree ... a pleasant surprise from HMRC for a change.

Thanks (2)
Replying to Paul Crowley:
By Carol Jefferis
10th May 2021 10:35

Of course if Dominic Raab was involved from an early stage that might explain HMRC's exemplary behaviour.

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