The appellant, William Archer, appealed against notices of penalties issued by HMRC totalling £1,403,181.78 for his failure to pay tax.

Archer argued that he had a ‘reasonable excuse’ for not paying the tax due as a result of closure notices issued by HMRC, and that he later paid the tax without ‘unreasonable delay’ once that excuse came to an end.

HMRC opened enquiries into Archer’s tax returns for the tax years 2001-02 and 2002-03 due to concerns that he had used two marketed tax avoidance schemes designed to produce tax losses.

The first scheme related to relevant discounted securities (RDS) and the second to hand life assurance policies (known as SHIPs). In 2009, the Court of Appeal held that both schemes were ineffective.