David Andreae v The Commissioners for HMRC
Decision date: 21 April 2022
Neutral citation: [2022] UKFTT 142 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned follower‑notice penalties imposed on Mr Andreae for failing to take corrective action in relation to an Isle of Man scheme. The Tribunal found he had reasonably relied on his professional advisers (Montpelier) and on ongoing litigation, so it was objectively reasonable for him not to take corrective action by the deadline. The appeal succeeded and the penalties were cancelled.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The Tribunal's decision indicates that, for the statutory reasonableness defence to follower‑notice penalties, a taxpayer may reasonably refrain from corrective action where, objectively viewed in the taxpayer’s circumstances and attributes, there were reasonable grounds to rely on professional advice and on the state of relevant litigation such that the taxpayer believed a judicial ruling was not final; the assessment is fact‑specific and must consider the taxpayer’s thought process and reliance on advisers.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal noted that it has no jurisdiction to determine the validity of a follower notice itself when deciding penalties and that HMRC’s internal (non‑statutory) policy weightings for cooperation credits do not bind the Tribunal, which may reassess cooperation factors afresh.