Ashfaq Rahman v The Commissioners for HMRC

Facts

Mr Rahman, an IT consultant who had previously worked through his own personal service company, participated between 2004-05 and 2007-08 in tax arrangements promoted by Montpelier Tax Consultants Ltd and notified under the DoTAS provisions. He became a partner in the Fuelmas partnership and later Fernleigh, established a trust of which he was a beneficiary, and received partnership income through that trust, relying in his returns on the Isle of Man double tax treaty to claim it was not taxable in the UK. HMRC opened enquiries and in 2010 issued closure notices and amendments, against which Montpelier appealed. After the First-tier Tribunal's decision in Huitson v HMRC, concerning a Montpelier scheme, became final on 23 January 2016, HMRC issued Mr Rahman with follower notices for the relevant years on 9 November 2016, together with accelerated payment notices — 35 pages of technical documents in one day. Representations drafted by Montpelier were rejected, extending the deadline for corrective action to 17 November 2017. No corrective action was taken by that date, and on 9 October 2019 HMRC assessed follower notice penalties of £112,076.72, later reduced to £91,848.91. Mr Rahman appealed to the First-tier Tribunal on 6 May 2024.