IT consultant ‘failed to take corrective action’ in £32k tax dispute

Contractor loses tax appeal related to use of Montpelier tax scheme after tribunal rules he did not take ‘corrective action’ to resolve situation despite numerous HMRC letters

At the First Tier Tribunal, the appellant, Matthew Smith, appealed follower notice penalties (FNPs) totalling £42,369.80 issued by HMRC on 14 August 2019 related to four tax years from 2004-05 through to 2007-08 (the relevant tax years).

Smith is an IT consultant and over the four-year period in question, he participated in a scheme promoted by Montpelier Tax Consultants. The scheme sought to exploit the UK-Isle of Man double taxation arrangements by routing his earnings through an Isle of Man partnership and an Isle of Man trust, the tribunal stated.

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