The ‘likely’ lad: what’s in a word? by Israr Manawer, tax consultant

Israr Manawer highlights a case where a follower notice was quashed after a Judicial Review outcome was overturned by judges.

A recent Supreme Court ruling has highlighted the difficult line trodden by taxpayers who decide to challenge HMRC’s opinion that they are not entitled to the tax advantage conferred by entering into a particular tax arrangement.

Indeed, the Supreme Court’s introduction to its judgment describes the follower notice regime as ‘draconian’ and ‘raising the stakes on tax avoidance’.

In this case, the taxpayer, Mr Haworth, had challenged HMRC’s issuing of a follower notice and accelerated payment notice, claiming that he was entitled to the tax advantage and that HMRC was wrong to base its opinion on a previous case (Smallwood) as the situation was different.

The Supreme Court ruled in favour of Mr Haworth, upholding a previous ruling by the Court of Appeal to quash the follower and accelerated payment notices, thus overturning the outcome of a Judicial Review, which had found in favour of HMRC.

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