Originally posted by KSL
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1. Take the "corrective action". That is accept that the Follower Notice applies and settle with HMRC. This will involve paying the APN as well as any additional interest HMRC add on top. It also involves ending your appeal and signing a declaration you accept your circumstances are the same as the case cited in the FN.
2. Send a letter of representation giving HMRC reasons why the FN (& associated APNs) doesn't apply. The grounds are limited. For example if your case is different to the case HMRC are alleging you are a follower of. HMRC will review the representation and either confirm the FN or withdraw it. If they confirm the FN you have 30 days to take the prescribed corrective action or HMRC will add 50% penalty on top of your tax bill.
It is worth sending a LoR because it will buy you some extra time. However, unless you have a very good reason HMRC will not withdraw the FN.
If the FN is not withdrawn then just paying the APN will still likely result in HMRC applying a 50% penalty as on its own this doesn't qualify as corrective action.
The legislation is designed to make people pay up where a judgement in a similar case has been made.
So your options are very limited unless you are prepared to risk a 50% penalty.Do you have grounds for believing you can win your appeal even though the case the Follower Notice is in respect of lost?
If you win HMRC won't be able to levy a penalty (although they do have the power to levy the penalty before your appeal is decided - refunded if you win). You can also appeal the penalty. However, you should understand the grounds on which you could appeal if you wish to ignore the FN and continue .
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