What is a follower notice from HMRC?
Answered 17 March 2026
Here is a comprehensive explanation of what a follower notice is, based entirely on the statutory sources and case law retrieved.
What is a Follower Notice from HMRC?
What the law says
A follower notice is a formal notice that HMRC may issue to a taxpayer ("P") under Chapter 2 of Part 4 of the Finance Act 2014 (FA 2014). Its purpose is to require a taxpayer who has used tax arrangements to "follow" a final court or tribunal ruling that HMRC considers defeats those arrangements, by giving up the claimed tax advantage.
Conditions for issuing a follower notice (s.204 FA 2014)
HMRC may only issue a follower notice if all four of the following conditions are met:
- Condition A: A tax enquiry is in progress into P's return or claim, or P has made a tax appeal that has not yet been determined or disposed of.
- Condition B: The return, claim or appeal is made on the basis that a particular tax advantage (the "asserted advantage") results from particular tax arrangements (the "chosen arrangements").
- Condition C: HMRC is of the opinion that there is a judicial ruling which is relevant to the chosen arrangements.
- Condition D: No previous follower notice has been given to the same person (and not withdrawn) by reference to the same tax advantage, arrangements, judicial ruling and tax period.
A follower notice must be issued within 12 months of the later of: (a) the date the judicial ruling was made, or (b) the date the return/claim was received by HMRC or the appeal was made.
What "relevant" judicial ruling means (s.205 FA 2014)
A judicial ruling is "relevant" to the chosen arrangements if it relates to tax arrangements and is a final ruling — i.e., one against which no further appeal is possible or has been pursued. Crucially, the ruling must be one where "the principles laid down, or the reasoning given, in the ruling would, if applied to the chosen arrangements, deny the asserted advantage or a part of that advantage".
What a follower notice must contain (s.206 FA 2014)
A follower notice must:
- Identify the judicial ruling in respect of which Condition C is met;
- Explain why HMRC considers that ruling meets the requirements of s.205(3); and
- Explain the effects of ss.207 to 210 (i.e., the recipient's rights and obligations).
Corrective action and penalties (s.208 FA 2014)
Once a follower notice is issued, P must take "necessary corrective action" — broadly, amending their return to counteract the denied advantage and notifying HMRC — within the specified time (generally 90 days from the notice, or 30 days after HMRC responds to representations). If P fails to do so, they become liable to a penalty of 50% of the value of the denied advantage, which may be reduced to a minimum of 10% where the taxpayer co-operates with HMRC.
Representations
P has 90 days from receipt of the follower notice to send written representations to HMRC objecting on the grounds that: Condition A, B or D was not met; the judicial ruling is not relevant to the chosen arrangements; or the notice was not given within the 12-month time limit. HMRC must consider those representations and either confirm or withdraw the notice.
HMRC guidance / practice
In practice, HMRC has used follower notices extensively in the context of mass-marketed tax avoidance schemes. For example, HMRC issued follower notices to approximately 8,000 taxpayers who used a particular IR35 avoidance scheme, following a final judicial ruling in that area.
The FTT has summarised the practical effect of a follower notice as follows: HMRC issues the notice where it considers that a final judicial ruling in another case is determinative of a dispute between HMRC and the taxpayer as to the availability of a particular tax advantage. If the taxpayer fails to take the necessary corrective action — broadly, telling HMRC they have given up their claim to the tax advantage — the taxpayer can be charged a penalty of up to 50% of the tax in dispute.
HMRC's follower notices also include a form for taking corrective action and warn recipients explicitly of the penalty consequences of failing to act.
Citation sources
ruling meets the requirements of section 205(3), and 4. (c) explain the effects of sections 207 to 210.” 81. The definition of “judicial ruling” relevant in the circumstances of this appeal is contained in Section 205 FA 2014. The relevant parts of Section 205 FA 2014 read as follows:- “205 “Judicial ruling” and circumstances in which a ruling is “relevant” … (1) … (2) “Judicial ruling” means a ruling of a court or tribunal on one or more issues. (3) A judicial ruling is “relevant” to the chosen
PART 4 Follower notices and accelerated payments CHAPTER 2 Follower notices Representations Representations about a follower notice 207 1 Where a follower notice is given under section 204, P has 90 days beginning with the day that notice is given to send written representations to HMRC objecting to the notice on the grounds that— a Condition A, B or D in section 204 was not met, b the judicial ruling specified in the notice is not one which is relevant to the chosen arrangements, or c the notic
ment with HMRC to relinquish the denied advantage. HMRC further advised that: “Penalties for failing to take corrective action on time If you do not take the necessary corrective action on time and we do not withdraw the notice, you will be liable to pay a penalty of 50% of "the value of the denied advantage" as determined by section 209 of the Finance Act 2014. Schedule 30 to the Finance Act 2014 explains how the value of the denied advantage is calculated. If you take corrective action on time
ircumstances in which HMRC may give a follower notice to a taxpayer. Various conditions must be met, including (at s204(4)) Condition C that “HMRC is of the opinion that there is a judicial ruling which is relevant to the chosen arrangements”. Section 204(3) explains such arrangements arise where a return is made by the taxpayer “on the basis that a particular tax advantage (“the asserted advantage”) results from the particular arrangements. Under s201(2)(a) “tax advantage” includes relief or in
had already been granted, it was not appropriate for Mr Huitson to apply for permission to appeal but rather that he should seek an extension of time within which to provide his notice of appeal to the UT. In relation to such an application, the response drafted by counsel stated that: “It will be for the Appellant to satisfy the UT that its discretion to extend time for compliance with the requirements of rule 23 should be exercised in his favour, notwithstanding the delay that has occurred. Th
PART 4 Follower notices and accelerated payments CHAPTER 2 Follower notices Giving of follower notices Circumstances in which a follower notice may be given 204 1 HMRC may give a notice (a “follower notice”) to a person (“P”) if Conditions A to D are met. 2 Condition A is that— a a tax enquiry is in progress into a return or claim made by P in relation to a relevant tax, or b P has made a tax appeal (by notifying HMRC or otherwise) in relation to a relevant tax, but that appeal has not yet been—
sentations, HMRC must determine whether to— (a) confirm the follower notice (with or without amendment), or (b) withdraw the follower notice, and notify P accordingly.” 90. Section 208(2) FA 2014 imposes a liability to a penalty if ‘necessary corrective action’ is not taken in respect of the ‘denied advantage’ within the ‘specified time’ as follows: “(2) P is liable to pay a penalty if the necessary corrective action is not taken in respect of the denied advantage (if any) before the specified t
Introduction 1. The Appellant (‘Georgios Kamperis’) appeals against follower notice penalties (“the Penalties”) issued pursuant to s 208 of the Finance Act 2014 (“FA 2014”), in the sum of £39,153.22 (reduced from £49,326.65) HMRC have asked us to exercise our powers under s 50(6) TMA to reduce the penalties in accordance with the review. , for the 2004-05 to 2007-08 (inclusive) tax years (“the relevant period”). The Penalties arose in respect of follower notices issued to the Appellant under Cha