Decided public record[2021] UKSC 25England and WalesNo probability score

Deep case 001 · tax administration and judicial review

HMRC lost the notice case. The taxpayer later lost the tax case.

What happens when HMRC uses a penalty-backed notice that pressures a taxpayer to abandon an appeal, but has not reached the level of certainty Parliament required?

Amount affected

£8,786,288.40

An up-front demand set aside with the notice. Not an award or final tax saving.

Public-law remedy

2 notices quashed

The follower notice and linked accelerated-payment notice were set aside.

Money recovered

Not established

No damages award was identified. The accelerated sum had not been paid; the underlying tax appeal failed.

What the Supreme Court found

The statutory threshold mattered.

HMRC's conclusion that the earlier Smallwood ruling was likely to deny the tax advantage did not meet the statutory use of 'would'. The required opinion left no scope for a reasonable person to disagree.
HMRC misdirected itself by treating seven indicators from Smallwood as inevitably locating the trust's effective management in the UK.
Because the penalty risk discouraged a taxpayer from continuing an appeal, the regime interfered with access to justice and the statutory power had to be interpreted restrictively.

Read the full judgment , not only the summary.

What the win did not prove

Procedure and underlying liability stayed separate.

Quashing the notices did not decide whether the underlying tax was due.
The underlying tax appeal was later dismissed through the First-tier Tribunal, Upper Tribunal and Court of Appeal; the Supreme Court refused permission to appeal.
HMRC did not impose the follower-notice penalty within the statutory time limit.

The 2025 permission decision records the end of the separate substantive appeal.

Follow the whole record

Twenty-five years, six distinct procedural moments.

2000
The trust arrangements were implemented during tax year 2000–01. HMRC later opened an enquiry.
24 June 2016
HMRC issued a follower notice and an accelerated-payment notice for £8,786,288.40.
May 2019
The Court of Appeal allowed Mr Haworth's appeal and quashed the notices.
2 July 2021
The Supreme Court unanimously dismissed HMRC's appeal, leaving the notices quashed.
4 March 2024
In the separate merits dispute, the Upper Tribunal dismissed the taxpayers' appeals about the underlying capital-gains-tax liability.
30 October 2025
After the Court of Appeal also rejected the underlying tax appeal, the Supreme Court refused permission to appeal.

Potential gain, stated without theatre

The large numbers describe pressure—not a payday.

Documented figures, what each meant and what it did not mean
Figure	What it meant	What it did not mean
£8,786,288.40	The amount stated in the accelerated-payment notice that was quashed.	Not money awarded, not a refund, not net gain and not a final decision that the tax was not due.
£878,628.84	Ten per cent of the denied advantage stated in the notice: the minimum percentage after cooperation described by the judgment under the law then applicable.	Not a penalty imposed, paid, recovered or awarded. The judgment says no penalty was imposed in time.
£4,393,144.20	Fifty per cent of the denied advantage stated in the notice: the broad penalty percentage described by the judgment under the law then applicable.	Not a penalty imposed, paid, recovered or awarded. It is arithmetic context for the pressure created by the notice.

Always model the downside

£0 recovery plus own unrecovered costs and possible adverse costs; the net result can be negative.

Net recovery remains unknown

The sources identify no damages award, Mr Haworth had not paid the accelerated amount, the underlying tax appeal later failed, and this packet has no complete costs, interest, funding or tax-on-recovery record.

The historical contingent penalty range shown by the then-law was £878,628.84 to £4,393,144.20. No penalty was imposed in time. It is contextual exposure, not recovered money.

Pattern worth assessing

Could a similar challenge exist?

Identify the exact statutory condition for a coercive notice; compare the public body's contemporaneous reasoning with that condition; preserve the distinction between procedural lawfulness and the merits of the underlying liability.

A notice relies on an earlier case but the facts, legal argument or concessions materially differ.
The decision-maker's record shows only likelihood where the statute requires a firmer conclusion.
The notice or penalty pressures a person to abandon an independent appeal.
The official explanation overstates what the earlier court actually decided.

Not enough on its own

Similarity is not viability.

Disagreement with HMRC or another regulator
A large amount, public controversy or political objection
A complaint, investigation or procedural mistake without material legal effect
Similarity to Haworth without checking the current statute, facts, route and deadline

A qualified assessor should first check any statutory review or appeal, then consider judicial review only where appropriate and within the applicable clock.

Who a law firm should contact

The client first. The public body only through the proper route.

This is a historical example, so there is no live claimant to pick up. For a new matter, the order below protects consent, privilege, conflicts and valid service.

1
Prospective client or authorised representative
Only through a confidential channel the person has chosen, after clear consent to an initial review.
Instructions, identity, objectives, documents and authority come from the client—not from a public case packet.
2
The assessor's own conflicts and risk function
Before receiving more than the minimum information needed for a conflict check.
A public-interest theory does not displace conflicts, competence, insurance, privacy or matter-opening duties.
3
Specialist public-law and, where relevant, revenue counsel
After the instructing route and authorisation to practise have been checked.
The public-law remedy, underlying tax appeal and any separate money claim may require different expertise.
4
Correct public-body defendant and any interested party
Only after instruction, route, urgency, service address and the applicable pre-action or tribunal rules are checked.
The correct addressee and timing are procedural questions; unsolicited public pressure is not service.

TaxSorted publishes no claimant contact and receives no expression of interest. Verify a solicitor or firm through the SRA Solicitors Register and a barrister's exact permissions through the Bar Standards Board register . Registration is not an endorsement of expertise or outcome.

Forkable case packet

Take the public evidence. Keep the private matter private.

The JSON packet resolves every source and carries a SHA-256 identifier for its substantive fields. The response checksum covers the exact delivered bytes. Neither proves truth, identity, qualification or a viable claim.

Complete case packet JSON ↗Blank local assessment JSON ↗

Direct case sources

Reviewed 24 July 2026. Read each source's limitations in the machine source ledger. This page is public research, not legal advice.

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