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FTT applies Haworth in follower notice penalties appeal (Whispering Smith v HMRC)

Published on: 27 May 2022
Published by a LexisNexis Tax expert

Table of contents

  • Applying the Haworth test to determine whether a judicial ruling is relevant
  • Whether reasonable in all the circumstances not to have complied with the follower notices
  • Why it matters
  • Case details

Article summary

Tax analysis: In Whispering Smith, the First-tier Tax Tribunal (FTT) dismissed the appeal by the taxpayer (WS) against penalties for failing to comply with follower notices (FNs). This was because applying the test and guidance in Haworth enabled the FTT to determine that the Supreme Court decision in UBS was a judicial ruling relevant to (ie which defeated the purported 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.

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