Countrywide Partners Limited v The Commissioners for HMRC

1. This appeal is made against a penalty of £1 million issued by HMRC on 16 February 2024, under para 2(1) of schedule 35 of the Finance Act 2014 (“ ”), on the basis that the appellant had failed to comply with a “stop notice” imposed on the appellant by HMRC on 6 December 2022. A “stop notice” is a formal notice which may be issued by an authorised officer of HMRC to a person who is suspected of promoting certain arrangements which requires that person to stop promoting that arrangement (under FA 2014 s 236 A FA 2014 ).

2. The background to the current proceedings is as follows: (1) On 18 April 2022, HMRC allocated a “scheme reference number” (‘ SRN ’) to a relevant arrangement that it suspected was promoted by the appellant. In a decision released on 11 April 2024, ( Countrywide Partners Limited v HMRC [2024] UKFTT 00323 (TC) ) this tribunal decided that the SRN was lawfully issued in respect of a relevant arrangement, namely, a “contractor loan scheme” (“ the scheme ”), for which the appellant was found to be a promotor (see [174] of that decision). The appellant was refused permission to appeal against that decision. Material facts set out in that decision are as follows: “7. The Appellant was incorporated in England and Wales on 14 December 2016. Until 12 July 2019, it was known as IPS Countrywide Ltd. According to Companies House, the 'Nature of its Business' is 'Other activities of employment placement agencies'. … HMRC's initial interest

12. On 25 October 2021, HMRC's Counter-Avoidance directorate wrote to the Appellant that it had reason to suspect that the Appellant might have been carrying on a business as a promoter as defined under the Promoters of Tax Avoidance Scheme (POTAS) legislation in the Finance Act 2014 , and requiring information and documents. The Notice of Potential Allocation

13. On 8 March 2022, HMRC produced a 'Notice of potential allocation of Scheme Reference Number' (the subject matter of Ground 1 of this Appeal). The Allocation of the SRN

14. On 18 April 2022, HMRC allocated an SRN (the subject matter of Grounds 1 and 2 of this Appeal). The naming of the Appellant on the list of named tax avoidance schemes

15. On 4 August 2022, HMRC published information about the Appellant and its arrangements on its 'Current List of Named Tax Avoidance Schemes, Promoters, Enablers, and Suppliers'.” (2) Following the issue of the stop notice to the appellant on 6 December 2022, on 23 December 2022, the appellant asked HMRC to withdraw it. On 3 February 2023, HMRC refused to do so. Initially, the appellant appealed against that decision; however, that appeal was withdrawn on 5 January 2025. Accordingly, there is no dispute that the stop notice was lawfully issued. (3) On 16 February 2024, HMRC determined that the appellant was liable to pay a penalty of £1million for failure to comply with the stop notice. A review of this decision took place and, on 29 July 2024, HMRC informed the appellant that their decision to impose the penalty was upheld. (4) By Notice of Appeal dated 25 August 2024, the appellant appealed to this tribunal against the penalty notice.

3. HMRC has the power to issue a stop notice under s 236 A FA 2014 as follows: “ Power to give stop notices (1) An authorised officer may give a person a notice (a “stop notice”) if the authorised officer suspects that the recipient promotes, or has promoted, arrangements of a description specified in the notice or proposals for such arrangements. (2) A description of arrangements may be specified in a stop notice only if the authorised officer considers that – (a) condition A and any of conditions B and C are met, or (b) conditions B and D are met. (3) [Condition A is set out here but is not relevant here] (4) Condition B is that - (a) arrangements of that description, or proposals for such arrangements, have been, or are likely to be, marketed (in any manner, whether by the recipient of the stop notice or otherwise) as capable of enabling a person to obtain a particular tax advantage, and (b) it is more likely than not that arrangements of that description are not capable of enabling that advantage to be obtained. (5) [Condition C is set out here but is not relevant here.] (6) Condition D is that - (a) arrangements of that description or proposals for such arrangements would be relevant arrangements or relevant proposals (see section 234), and (b) the recipient of the notice is subject to a conduct notice or a monitoring notice. (7) For the purposes of this section, and sections 236 B to 236K and 272A, a person promotes arrangements or a proposal for arrangements if the person does anything in connection with those arrangements or that proposal that would, if those arrangements or that proposal were relevant arrangements or a relevant proposal, cause the person to be carrying on a business as a promoter, or to be treated as such, for the purposes of this Part.” (Emphasis added.)

4. The effect of a stop notice is set out under s 236 B FA 2014 as follows: “ Section 236 B Effect of stop notices (1) A person subject to a stop notice must not promote – (a) Any arrangements that meet the description specified in the notice or that have similar form or effect to the arrangements of that description ; or (b) Any proposal for such arrangements.” (Emphasis added.)

5. The term “promote” is defined by reference to ss 235 FA 2014 which defines when a person is a “promoter”: “Carrying on a business “as a promoter” (1) A person carrying on a business in the course of which the person is, or has been, a promoter in relation to a relevant proposal or relevant arrangements carries on that business “as a promoter ”. (1A) For the purposes of this Part, a person is treated as carrying on a business as a promoter if the person is a member of a promotion structure (whether or not the person carries on a business). Schedule 33A describes the cases in which a person is a member of a promotion structure. (2) A person is a “promoter” in relation to a relevant proposal if the person - (a) is to any extent responsible for the design of the proposed arrangements, (b) makes a firm approach to another person in relation to the relevant proposal with a view to making the proposal available for implementation by that person or any other person, or (c) makes the relevant proposal available for implementation by other persons. (3) A person is a “promoter” in relation to relevant arrangements if the person – (a) is by virtue of subsection (2)(b) or (c), a promoter in relation to a relevant proposal which is implemented by the arrangements, or (b) is responsible to any extent for the design, organisation or management of the arrangements .” (Emphasis added.)

6. Under s 234: (1) A “relevant proposal” means “a proposal for arrangements which (if entered into) would be relevant arrangements (whether the proposal relates to a particular person or to any person who may seek to take advantage of it)”. (2) Arrangements are “relevant arrangements” if: “(a) they enable, or might be expected to enable, any person to obtain a tax advantage, and (b) the main benefit, or one of the main benefits, that might be expected to arise from the arrangements is the obtaining of that advantage.” (3) “Tax advantage” includes – “(a) relief or increased relief from tax, (b) repayment or increased repayment of tax, (c) avoidance or reduction of a charge to tax or an assessment to tax (d) avoidance of a possible assessment to tax, (e) deferral of a payment of tax or advancement of a repayment of tax, and (f) avoidance of an obligation to deduct or account for tax.” (4) “Arrangements” includes “any agreement, scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.”

7. A person subject to a stop notice must provide quarterly returns to HMRC as set out in s 236 B FA 2014 as follows: “Quarterly returns (1) A person subject to a stop notice must provide a return to HMRC containing the information described in subsection (4) for each relevant period. (2) The first relevant period is the 3 month period commencing on the day the stop notice was given to its recipient. (3) Each successive 3 month period that commences within the period of 3 years commencing on that day is a relevant period. (4) The information that must be contained in a return under subsection (1) is - (a) the number (which may be nil) of relevant clients of the person subject to the stop notice in the relevant period to which the return relates, (b) if the return is the return for the first relevant period, the number (which may be nil) of relevant clients of the person in the period ending with the commencement of the first relevant period, (c) in respect of each relevant client— (i) the client's name and address, (ii) the unique taxpayer reference number (if any) allocated to the client by HMRC, and (iii) the client's national insurance number (if any), (d) any name by which any such arrangements or proposal is known or is marketed. (5) For the purposes of this section, a person (“C”) is a “relevant client” of a person subject to a stop notice (“P”) in a period if at any time during that period - (a) P has made a firm approach to C in relation to a proposal for arrangements that fall within the description specified in the stop notice; (b) P has made the proposal available for implementation by C; (c) P has provided services to C in relation to arrangements falling within the description specified in the stop notice, or in relation to a proposal for such arrangements. (6) If the person does not have the information referred to in subsection (4)(c)(ii) or (iii) in respect of a relevant client, the return must instead include a statement of that fact. (7) A return for a relevant period must be provided to HMRC before the end of the period of 15 days commencing on the last day of the relevant period. (8) An authorised officer may by notice to a person subject to the obligation to make a return under sub-paragraph (1) provide for that obligation to cease to have effect in relation to that person from such time as may be specified in the notice.”

8. Schedule 35 of FA 2014 imposes penalties for failure to comply with the provisions of a stop notice: (1) Penalties for failure to comply are imposed under para 2: “2(1) A person who (a) fails to comply with a duty imposed by or under this Part mentioned in column 1 of the Table is liable to a penalty not exceeding the amount shown in relation to that [duty] in column 2 of the Table.” (2) Column 1 includes s 236 B and the maximum amount is specified as follows in para 2(A): “(2A) In relation to a failure to comply with section 236 B(1), the “relevant amount” is the sum of— (a) £100,000 in respect of one or more failures relating to a particular stop notice, and (b) £5,000 for each person to whom arrangements of a description specified in that stop notice, or a proposal for such arrangements, were promoted (within the meaning it has in that section). … (4) The amount of a penalty imposed under sub-paragraph (1) is to be arrived at after taking account of all relevant considerations, including the desirability of setting it at a level which appears appropriate for deterring the person, or other persons, from similar failures to comply on future occasions having regard (in particular)— (a) in the case of a penalty imposed for a failure [relating to any arrangements or proposal promoted by a person], to the amount of fees received, or likely to have been received, by the person in connection with the [those arrangements or that proposal]; (b) in [such a case], to the amount of any tax advantage gained, or sought to be gained, ... in relation to the ... arrangements or the arrangements implementing the ... proposal [ (including, where the person liable to the penalty is the promoter of those arrangements or that proposal, any advantage that was gained or sought to be gained by the persons to whom the arrangements or proposal were promoted)]. (5) The references in sub-paragraph (4) to arrangements or a proposal being “promoted” are to be construed in accordance with section 236 A(7). (6) Sub-paragraphs (5) to (11) of paragraph 13A of Schedule 34 (meaning of “control” and “significant influence”) apply to this paragraph as they apply to Part 2 of that Schedule.” (3) A taxpayer is not liable to a penalty if there is a reasonable excuse for the relevant failure under para 9: “Reasonable excuse 9(1) Liability to a penalty under this Schedule does not arise if there is a reasonable excuse for the failure. (2) For the purposes of this paragraph - (a) an insufficiency of funds is not a reasonable excuse unless attributable to events outside the person's control, (b) if the person relies on any other person to do anything, that is not a reasonable excuse unless the first person took reasonable care to avoid the failure, (c) if the person had a reasonable excuse for the failure but the excuse has ceased, the person is to be treated as having continued to have the excuse if the failure is remedied without unreasonable delay after the excuse ceased, (d) reliance on legal advice is to be taken automatically not to constitute a reasonable excuse where the person is a monitored promoter if either – (i) the advice was not based on a full and accurate description of the facts, or (ii) the conclusions in the advice that the person relied on were unreasonable, and (e) reliance on legal advice is to be taken automatically not to constitute a reasonable excuse in the case of a penalty for failure to comply with section 258, if the advice was given or procured by the monitored promoter mentioned in subsection (1) of that section.” (4) It is provided that the provisions in the Taxes Management Act 1970 regarding penalties apply subject to certain exceptions: “Assessment of penalty and appeals Part 10 of TMA 1970 (penalties, etc) has effect as if – (a) the reference in section 100(1) to the Taxes Acts were read as a reference to the Taxes Acts and this Schedule, (b) in subsection (2) of section 100, there were inserted a reference to a penalty under this Schedule, other than [(i)] a penalty under paragraph 3 of this Schedule in respect of which the relevant sum is £600. [(ii) a penalty in respect of a failure to comply with section 236 B(1) unless an officer of Revenue and Customs authorised for the purposes of section 100 of TMA 1970 considers that paragraph 2(2C) of this Schedule applies in relation to that failure; (iii) a penalty in respect of a failure to comply with section 236 B(3), (4) or (3), 236C(1) or 236J(1);….”

9. The appellant submitted that (1) it was not in breach of the stop notice on the basis that, at the time of the purported breach, the appellant was (a) no longer in business at all for the purposes of the legislation and/or (b) no longer in business as a promoter for the purposes of the legislation, and (2) if that is found not to be correct, any penalty should be reduced to nil (or substantially reduced) on the basis that the appellant has a reasonable excuse for the asserted breach and/or in consideration of a number of factors which HMRC have failed to take into account in determining the amount of the penalty. HMRC dispute all of these points.

10. In summary, for all the reasons set out below, we have decided that the appellant did not comply with the stop notice and the penalty of £1 million has been properly and appropriately imposed. Evidence and Facts

11. We have found the facts on the basis of the documents in the bundles and the evidence of Mr Peter MacGregor, who gave evidence for the appellant, and Ms Charlotte Stanford who gave evidence for HMRC. Their roles are described below. A brief witness statement was also provided by Mr Michael Hall who at the relevant time was a director of the appellant but he did not attend the hearing and was not cross-examined. In such circumstances, we do not consider it appropriate to attach any weight to the untested brief comments made in Mr Hall’s witness statement.

12. On 4 August 2022, HMRC published information about the appellant and its arrangements on their “Current List of Named Tax Avoidance Schemes, Promoters, Enablers, and Suppliers”.

13. Prior to the issue of the stop notice HMRC and representatives of the appellant met on 13 September 2022 to discuss various issues. This is reflected in email exchanges of 14, 15 and 20 September 2022 between Mr MacGregor and Ms Stanford. They each sent each other their notes of the meeting for review. Ms Stanford asked Mr MacGregor if he would like to make any amendments to her note. It appears that he did not suggest any amendments.

14. Mr MacGregor’s note of the meeting includes the following statements: “[HMRC’s representatives] Going forward HMRC intend to: Publish information under S316C – FA S86 – Inform public of risk of using IPS Name & Shame directors Send conduct notices to directors Stop notices to be issued. Operations to cease by 31/12/22 (penalties for non-compliance) [Mr MacGregor] Explained problems with stopping suddenly, damage caused to reputation if we advise agencies with immediate effect. Also advised that from an operational point of view, IPS couldn’t handle the switching of all workers in a single week. IPS need to run down the business more gradually. [Mr MacGregor] Advised HMRC that the publication of information is also not helpful from a reputation point of view. Told HMRC that the damage caused to the business could put IPS in a position where the payment of penalties would become impossible. This is not in HMRC’s interest and they would need to work with us rather than punish and damage the business. AE Agreed that they would not look to harm our wider business and they are not in the business of trying to stop businesses operating or ceasing assets. Closure The meeting ended amicably and both parties agreed to go away and consider matters further with regards to quantum of penalties and other matters.” (Emphasis added.)

15. Ms Stanford’s note of the meeting includes the following statements: “[ HMRC’s representatives] explained the stop notice legislation and stated that HMRC would be looking to issue a stop notice which would help alleviate any “phoenixing”. [He] explained that if CP are already leaving the market the stop notice obligations would be minimal provided there was no transfer of users. [Mr MacGregor] queried whether HMRC intended to publish IPS. [HMRC representative] explained that the publishing decision was pending based on the outcome of the meeting. [He] queried whether a client list had been provided…. [Mr Andrew Wood, a barrister acting for the appellant] queried whether IPS would be published under S86 FA 2022, S316 C FA 2004 or using the stop notice legislation (POTAS). [A HMRC representative] confirmed that HMRC were looking at S316 C…. [A HMRC representative] explained that HMRCs main concern is the promoter activity. [He] queried if there were current financials for the company. [A HMRC representative] clarified the future actions that could be taken by HMRC. [He] explained that HMRC could publish under S86 to inform the public of any risk. [Mr MacGregor] queried whether this would be beneficial for a scheme that has ceased. [He] explained that the grouping would like to move forward with a “clean slate”. [He] raised concerns that publishing would result in no money being available to pay penalties. [Mr Wood] queried whether there was a threat of loss to the taxpayer. [A HMRC officer] explained there was a possibility to name directors and any links. [He] stated that if the arrangements continued and agreement couldn’t be reached, HMRC could look to publish under S86 and possibly issue a conduct notice. [ Mr MacGregor] explained that as CP are not taking on new clients then there will naturally come a point where CP ceases. [He] stated that if they were to cease before this then they would need to give clients some notice. [A HMRC officer] queried whether CP had started informing clients of the cessation. [Mr MacGregor] confirmed that they had not informed clients. [He] stated that no-one new had been taken on since the SRN was issued. [He] explained that the directors would be reluctant to cease straight away as they do not wish to alarm their big agency clients into taking their business elsewhere. [ Mr Wood] queried whether CP could give the agencies a date by which CP will be ceasing. [He] suggested December as a possible cessation date. Mr MacGregor explained that CP would need to issue a P45 to each client. [He] stated that this could be done by December. [Mr Wood] suggested the issuing of the stop notice should line up with the cessation. [A HMRC officer] raised the concern that a consensus hadn’t been reached on penalties. [There was some discussions recorded on this.] [A HMRC officer] queried whether [Mr MacGregor] had previously discussed penalties with the directors. [The officer] explained that the penalty acts as a deterrent for others looking to promote avoidance. [He] stated that he is prepared to look at the IPS penalty for settlement to see if the dates could be changed, however HMRC would still seek the maximum should a compromise not be achievable. [ He] outlined that HMRC would seek to issue a stop notice by December for CP. [A HMRC officer] stated that if CP were to cease then it would be prudent to resolve all outstanding issues at the same time. All parties agreed to keep an open dialogue on the issues. Meeting End Time: 13:25 Action points - HMRC to request statements of assets and liabilities for each director. - HMRC to issue stop notice to CP by 31st December 2022 - CP to stop arrangements by 31st December 2022 .” (Emphasis added.)

16. A further note dated 13 October 2022 was provided by Mr Andrew Wood, who at the time was representing the appellant and who also attended the meeting.

17. It appears from the notes of the meeting held in September 2022 that (1) the appellant was told by HMRC officers that HMRC would issue a stop notice by 31 December 2022 and that it was to “stop arrangements” by that time, and (2) whilst Mr MacGregor said that the appellant could not stop its activities immediately, it was agreed between those attending the meeting that the appellant would aim to do so by December 2022, when the stop notice was to be issued. To some extent Mr MacGregor disputes this but we do not accept his evidence on this as set out in our conclusions below.

18. The stop notice was then issued on 6 December 2022 by Mr Colin Williams, a senior officer of HMRC. This sets out the description of the arrangements subject to it in these terms: “The description of the arrangements is based on my review of the evidence provided by users of the arrangements (“Scheme Users”)

1. The user enters into a Contract of Employment with a company which provides that the employee will be paid for time worked at the National Minimum Wage (NMW) rate (or, if applicable, the National Living Wage (NLW) rate unless otherwise specified in the Employee Assignment Schedule. At the same time the user also enters into a Loan Agreement.

2. The loan amount is unspecified. The company (lender) promises to loan certain monies to the borrower (the scheme user) and the borrower promises to repay the principal amount to the lender plus 2% interest above the official HMRC rate. The loan is said to be repayable within 60 days on written demand from the Lender and is be secured against ‘any achieved bonus payments’

3. Users also enter into a ‘Bonus, Incentive or Pay Scheme Offer’ agreement with the company. The offer invites the user to participate in a bonus scheme where the company will pay a bonus in the event of the user generating in excess of 170% of their employment cost. The bonus paid will be between 100% and 170% of the of the total employment cost attributable to the user. The company enters into a contract with end users directly or via an Agency. The employee then undertakes work for the end client/agency and submits timesheets either directly to the company or their agency who pass on the details to the company.

4. The company invoices the end client for work done, then receives payment for services from the end user or Agency.

5. The company issues a payslip to the user and deduct a management fee of 15% from the gross amount received from the end user as shown in the “Company Deductions” section of the payslip.

6. The company pay NMW and Holiday pay at an hourly rate as outlined in the Contract of Employment. National Insurance contributions (NICs) s and PAYE are deducted from the NMW/NLW and holiday earnings.

7. The company pay the remaining balance in the form of loan, the terms of which secure repayment against any future bonus or incentive payments arising from the ‘Bonus, Incentive or Pay Scheme Offer’ Agreement users enter into with CP. No tax or NICs is paid on the loan”

19. The stop notice also said this: “ Why I suspect you promote, or have promoted, arrangements of this description, or proposals for such arrangements Section 236 A(7) of the Finance Act 2014 provides that for the purposes of section 236 A a person promote arrangements or a proposal for arrangements if the person does anything in connection with those arrangements or that proposal that would, if those arrangements or that proposal were relevant arrangements or a relevant proposal under section 234 of the Finance Act 2014, cause that person to be carrying on a business as a promoter, or to be treated as such. Section 235 FA 2014 - Carrying on a business as a promoter Section 235(1) FA2014 provides that a person carrying on a business in the course of which the person is, or has been, a promoter in relation to a relevant proposal or relevant arrangements carries on that business “as a promoter”. A person is a “promoter” in relation to a relevant proposal if the person - S235(2) (c)- Makes the relevant proposal available for implementation by other persons. The following evidence causes me to suspect that you have made arrangements of the specified description, or proposals for such arrangements, available for implementation by other persons. 1) Signed Contracts of Employment and Loan Agreement and Bonus Scheme Offer You are party to the main contracts that are required to enable users to implement the arrangements. Had you not been counterparty to the agreements, the scheme users could not have implemented the arrangements. S235(3) (b) - Responsible to any extent for the design, organisation or management of relevant arrangements There is also evidence that you are responsible to any extent for the organisation or management of the arrangements. You undertake the following activities that evidence organisation or management of the arrangements: 1) Issue payslips/remittance advices to users reflecting the amounts that will be credited to their bank accounts either by way of salary or loan payment. 2) Make salary payments to users and complete RTI requirements It is therefore more than evident that you play a crucial role in the organisation and management of the arrangements and are a promoter of the arrangements per section 235(3) (b). The evidence I have set out above also underpins my suspicion that you carry on these promotion activities in the course of a business…… The persons who are ‘subject to’ this stop notice You are subject to this stop notice if you have been given this notice by an authorised HMRC officer. You are also subject to this stop notice if another person has given it to you. Being subject to a stop notice means that you must do everything the notice tells you to do. Another person may have given you a copy of a stop notice if (one of the following applies): • that person has control or significant influence over you • you have control or significant influence over that person • that person has made a relevant transfer to you You can find more information about why another person might have given you this notice in the sub-section below called ‘Giving copies of the stop notice’. What this means for you You must not promote: • arrangements that meet the description set out above or any arrangements that are similar in form or effect to arrangements of that description • any proposals for: − arrangements meeting the description set out above − arrangements that are similar in form or effect to arrangements of that description What you must do now You must (do both of the following): • tell your clients and intermediaries that you are subject to a stop notice • make quarterly returns about your clients If you have been given this stop notice by an authorised officer, you must also give a copy of it to the following persons and provide us with information about them. These are: • any company, limited liability partnership (LLP) or partnership that you control or have significant influence over • each person who controls or has significant influence over you • any person who you make a relevant transfer to There is more information about each of these below. Telling your clients and intermediaries You must give a notice to the following people in relation to arrangements falling within the description set out above, or proposals for such arrangements. These are: • each of your clients • each person you could reasonably be expected to know is an intermediary Your notice to them must: • tell them that you are subject to a stop notice • tell them that they are one of the following (as applicable) in relation to arrangements or proposals meeting the description in the notice: − a client − an intermediary • include a copy of this stop notice You must send your notice to each client and known intermediary within 5 days of the day you received the stop notice. If you later find out that any other person is an intermediary, you must send your notice to them within 5 days of you finding out. A person is a client if you have at any time (whether before or after you were given this stop notice) (done one or more of the following): • made a firm approach to that person in relation to a proposal for arrangements falling within the description set out above • made the proposal for such arrangements available for implementation by that person • provided services to that person in relation to arrangements falling within the description set out above or in relation to a proposal for such arrangements Giving copies of the stop notice This section applies to you if you have been given this stop notice by an authorised HMRC officer. If you control or have significant influence over a company, LLP or partnership, you must (do both of the following): • give a copy of this notice to that company, LLP or partnership, within 5 days of the date it was given to you • give us the following information about the company, LLP or partnership, within 15 days of the day you were given this notice: − their name − any current or previous business name or pseudonym − their business address or registered office…….. Quarterly returns You must give us the information shown below for each relevant period. A relevant period lasts for 3 months. The first relevant period is the 3 months from 12 December 2022 to 12 March 2023. You must make sure we receive this information by 27 March 2023. We call this a ‘quarterly return’. There’s more information in the enclosed letter about how to make the quarterly return. Information required for each quarterly return • the number of relevant clients (which may be nil) in the period to which the return relates • for the first relevant period, the number of existing relevant clients (which may be nil) at 12 December 2022 • for each client, their: − name and address − unique taxpayer reference number (UTR) − National Insurance number - if you do not have your client’s UTR and/or National Insurance number, you must state that fact • the name, if any, by which the arrangements or proposal are known or marketed A person is a relevant client, if at any time during the relevant period, you have (done one or more of the following): • made a firm approach to that person in relation to a proposal for arrangements falling within the description shown above • made the proposal for arrangements falling within the description shown above available for implementation by that person • provided services to that person in relation to arrangements falling within the description shown above or in relation to a proposal for such arrangements You must continue to make quarterly returns for each subsequent 3 month period starting on 13 March 2023. You must do this for each 3 month period that starts before 12 December 2025. You must me sure that we receive this information within 15 days of the end of the relevant period. The 15 days start on the last day of the period. What if you do not comply with this notice If you do not do the things that this notice requires you do to, you may be liable to penalties. The enclosed factsheet CC/FS61 gives you more information about penalties for not complying with a stop notice.”

20. The “Compliance Checks Series Notes” which were provided with the stop notice states that the recipient is “to immediately stop promoting arrangements of the kind specified in the notice”.

21. On 5 April 2023: (1) Mr MacGregor wrote to Ms Stanford regarding the quarterly reports the appellant was required to produce under the stop notice as follows: “I have been trying to pull the information together for our first quarterly report under the stop notice issued on the 6th of December 2022. Can you please confirm that my understanding of the requirements is correct. We made no proposals, approaches or took on any new workers during the relevant period therefore in that regard the report is a nil report. For the existing workers who were with us prior to the relevant period and were still in run-off at the 12th of December, do we supply the names addresses and NI numbers for them as we “provided services”? If so, will HMRC accept a listing of these people sent by email and who would I send this to?” (2) Ms Stanford replied to Mr MacGregor that the following information was required: “ The number of persons to whom Countrywide Partners has made a firm approach or provided services in relation to the relevant scheme. In respect of each client you must provide the: i. client’s name and address ii. unique taxpayer reference number (if any) allocated to the client by HMRC iii. client’s national insurance number (if any) Any names by which the scheme to which the stop notice relates is known or is marketed.” (3) In her reply, Ms Stanford also pointed Mr MacGregor to information and guidance on the effect of a stop notice: “More information on stop notices and the effects of stop notices can be found here: Promoters of tax avoidance schemes: guidance - GOV.UK (www.gov.uk). (Section 4.4 gives further details about quarterly returns)…. Please note that the quarterly return was due on the 27th of March, I therefore have issued a penalty warning letter explaining that a penalty may be due. Please do not hesitate to contact me should you require further clarification.” (4) Mr MacGregor responded apologising for the delay in submitting the first quarterly return and indicating it would be done that day. In his witness statement Mr MacGregor said that he had advised Ms Stanford on 5 April 2023 that there were customers in “run off” at 12 December 2022 and she did not raise any comments despite being provided with this information. He noted that issue was not raised again until her letter of 18 August 2023 (see below). We consider that the fact that Ms Stanford did not comment further is explained by the fact that she thought the appellant was aiming to cease its activities by the end of December 2022 (see the meeting notes above and her evidence below).

22. On 6 June 2023 HMRC notified the appellant that they would publish information about the appellant under the provisions of s 86(1) of the Finance Act 2022 . Mr Wood, acting for the appellant, then responded to HMRC on 3 July 2023 stating that the appellant was not promoting the arrangements and that: “As you know, they have already had their details published under the DOTAS “naming and shaming” provisions, the structure has been issued with an SRN and the owners of the business have wound down their activities. They ceased marketing some time ago and all that remains is the rump of the business. This seems to be accepted by HMRC. It is explicit in FA 2022, s86 that there must either be a risk to taxpayers (under s86(1) (a)) or to the public revenue (under s86(1) (b)). Bearing in mind my comments above, I cannot see how there is any risk to taxpayer or public revenue for a structure which is: • no longer marketed ( and has virtually ceased operation ), • has been issued with an SRN and forced to comply with DOTAS; and • also been subject to a prior naming and shaming. I don’t think any reasonable analysis would come to a different conclusion Further, in my last call to Mr Hughes and yourself, Mr Hughes went out of his way to thank my Clients for their engagement and for winding down their business.” (Emphasis added.)

23. On 4 July 2023, Mr MacGregor wrote to Ms Stanford noting that the appellant was supposed to make the second quarterly report in the previous week under the terms of the stop notice. He said that he could advise that there were no new customers or workers in the period and therefore there was nothing to report and he asked if this email would “suffice for reporting purposes” or whether there was a more formal process he should follow. Ms Stanford replied on 10 July 2023 thanking him for his response and confirming that the email sufficed.

24. Mr MacGregor said in his witness statement that the appellant had stopped taking on new business in September 2022 and that it was in the process of “running off” its business by the time the stop notice was issued and that the appellant “did not make the scheme available to any new person or approach any person after the issue of the Stop Notice”. He also made these comments: “On the 24th of May 2024, our advisor, Mr. Andrew Wood (who is a Barrister, with a tax specialism), advised us that part of HMRC's case was that we had made £3.2 million in turnover since the issue of the Stop Notice. I provided him a graph showing how the turnover of the business had plummeted from the month before the issue of the Stop Notice. I have attached a summary of the sales figures for each month from December 2022 up until the business run off was completed in January 2024. These clearly demonstrate a sharp decline in business demonstrating the CPL's intention to cease trading.” “During the run-off period in 2023, CPL wasn’t contributing any profits to our wider business the accounts show a loss of £6,652 for the year to 31.12.2023. CPL did pay £108,691 to a related company, IPS Administration, who provided IT, Staff and all other back office functions. The contribution received from CPL would barely cover the costs of operating the business for one year therefore CPL was not continued during 2023 with any intention of making profits.”

25. In examination in chief: (1) Mr MacGregor confirmed that the appellant did not take on any new clients after the stop notice was issued and did not make available any contracts of employment, loan agreements or bonus offers to any new people, (2) he said that the information he provided demonstrates that the appellant was “running off” its business in 2022 until it ceased in February 2024: as set out in his statement (a) there was a decline in the amount of turnover billed for the workers’ payroll which the appellant paid from November 2022 until the appellant’s activities completely ceased in February 2024, (3) this demonstrates that the company was “running off” its business. This and the fact that the accounts for the period ended 31 December 2023 show a net loss of £6,652 and a profit for the previous financial year of, £99,383, show that the company was in “run off” and was not making as much in fees in 2023 as in the prior year and so it made a loss by the end of the year, and (4) this all points to the fact that in 2023 they were “running off the business. We were not out looking to make profits, or any significant profits”.

26. In his witness statement Mr MacGregor stated that neither the appellant’s advisors nor HMRC raised any concerns with the appellant “running off” the business. He referred to Ms Stanford’s email of 10 July 2023 and noted that it was not until 14 February 2024 that Ms Stanford withdrew her advice previously given in that email. He commented that: “It is clear that Ms Stanford, and possibly her supervisors at HMRC, had difficulty interpreting the conditions of a Stop Notice and therefore it would be unfair to expect a higher level of interpretation from the taxpayer when HMRC are unsure of their own advice”. We do not accept these assertions for the reasons set out below.

27. The bundles contained data which shows the number of users of the scheme in each of the specified months to 5 of the month in each case as follows: (1) In 2023: January - 193; February - 180; March - 160; April - 116; May - 80; June -62; July - 40; August - 26; September - 42; October - 14; November - 14; December - 11; and (2) In 2024: January - 11; February - 8.

28. On 18 August 2023, HMRC issued a letter to the appellant stating it was liable to a penalty “because you continued to promote arrangements meeting the description specified in the stop notice we gave on 6 December 2022”. HMRC gave the following reasons for their view: “Your RTI records [being the date set out in [27] above] show that you have continued to promote the arrangements post 6 December 2022. You have continued to employ users of the arrangements who were employed by you prior to the issue of the stop notice. In addition, the letter of 3 July 2023 provided by your agent stated that the company has “virtually ceased operation” thus suggesting that as at 3 July 2023 the company had not ceased operation of the arrangements.”

29. Mr MacGregor commented in his witness statement that (1) HMRC were in receipt of “RTI” reporting information (“real time” information provided as regards payments made to users of the scheme (see [27] above)) throughout the entire period and therefore had the opportunity to raise concerns from December 2022 onwards, (2) Ms Stanford did not advise that a penalty was due until 18 August 2023, (3) it appears from the reasons given in that letter that some considerable weight was placed on Mr Wood’s statement that the appellant had “virtually ceased operation”, (4) he believes that Ms Stanford could have requested clarification on this statement rather than resort straight to the penalty mechanism. The appellant would then have had the opportunity to explain that this did not include promotion but merely “run-off” as HMRC were previously advised and had always been aware of, (5) his view is that the quarterly reporting mechanism must exist to facilitate any business subject to a stop notice to continue beyond the date of the stop notice otherwise the whole process would be redundant, and (6) HMRC’s own guidance is unclear as to what promotion means. The Gov.UK website has guidance on "Promoters of Tax Avoidance Schemes". Section 4.2 states this: 4.2 Section 236 A — Power to give stop notices Section 236 A gives HMRC the power to issue stop notices. In addition to various duties placed on the promoter which are discussed below, the stop notice requires the promoter to immediately stop promoting the proposal or arrangements described in the notice, or any that are similar in form or effect. This is designed to stop suspected promoters from selling schemes HMRC, on balance, think do not work . This will reduce the number of clients buying into such schemes, reducing the risk of taxpayers continuing to use a scheme for multiple tax years, potentially ending up with large tax bills if the scheme is ultimately found not to work.” (Emphasis added.)

30. He added that he took from the guidance that the appellant would be obliged to stop promoting or marketing to new clients. The link to this information was provided by Ms Stanford in her email of 5 April 2023. We have commented on this in our conclusions.

31. Mr MacGregor explained that after HMRC raised the possibility of a penalty for failing to comply with the stop notice, the company requested a legal opinion from Mr Andrew Thornhill KC who agreed with the approach adopted by the appellant. The opinion was dated 4 September 2023. The opinion states this: “1. The Company received a stop notice in December 2022. There may be grounds for challenging the notice on the basis that the Conditions specified in s.236 A FA 2014 are not satisfied. I do not deal with this point but am concerned to deal with a separate question – What does a stop notice stop?

2. Section 236 B FA 2014 answers the question. By sub-section (1) the recipient “must not promote” arrangements of the type specified in the notice and must not “promote” any proposal for such arrangements.

3. Suppose the recipient has clients to whom he has promoted the arrangements and those clients have entered into the arrangements. In other words clients have become employed by the recipient, supplied services to an end user and received a mixture of salary, loans and bonuses. Does the continued operation of the promoted arrangements amount to promotion?

4. In my view, the answer is clearly, NO. To promote arrangements involves getting persons to enter into them and does not involve operating them once entered into. This seems plain as a matter of ordinary language but is surely confirmed by s.236 C. The section provides for 3 monthly returns of clients to whom proposals have been made, that is, persons in relation to whom the recipient has acted as promoter. The information enables HMRC to contact the clients and claim any tax they consider to be due. If operating previously promoted arrangements amounted to promotion, it would have been stopped by the stop notice. The fact that s.236 C envisages continuing operation seems to me to give strong support that such continuing operation is not promotion.

5. The Company should write to HMRC stating that it has been advised that continuing the operation of arrangements already promoted for the contractual term of such arrangements is not promotion. HMRC should be asked to agree and explain, if they do not agree, how this is reconcilable with s.236 .”

32. On 13 September 2023 Mr Wood responded to HMRC stating that there was no breach of the stop notice: “To promote arrangements involves getting persons to enter into them and does not involve operating them once entered into. This seems plain as a matter of ordinary language but is surely confirmed by FA 2006 , s236 C. This section provides for quarterly returns of clients to whom proposals have been made, that is, persons in relation to whom the recipient has acted as promoter. The information enables HMRC to contact the clients and claim any tax they consider to be due. If operating previously promoted arrangements amounted to promotion, it would have been stopped by the Stop Notice. The fact that s236 C envisages continuing operation seems to give strong support that such continuing operation is not promotion. My Client has obtained multiple opinions on the position that support the view that continuing the operation of arrangements already promoted for the contractual term of such arrangements is not promotion. As such, if HMRC disagrees with this position then they should explain why this is so and how this is reconcilable with s236 C.”

33. Mr Wood also stated that HMRC’s conduct, as shown in the above emails, and as set out below, is consistent with them accepting that there was no breach of the stop notice: “A phone call took place on 16 May 2023 to follow up on the issue of settling the disputes between IPS Progression, Countrywide Partners and HMRC. On this call were Mr Hughes, Ms Stanford and me. At the beginning and end of this call Mr Hughes went out of his way to make clear his gratitude for My Client ceasing marketing the structure and for taking noticeable steps to unwind their business. There was no suggestion here that what remained of the business, the extent of which was known to HIMRC through RTI submissions, was in breach of the Stop Notice. General Further, for well over 12 months, there has been a direct line of communication between myself and HMRC regarding My Client. At any time, knowing that My Client has been actively trying to get out of the market and draw a line under their dealings, HMRC could have raised their concerns regarding any activity that they believed was in breach of the notice. They did not.”

34. On 14 February 2024 Ms Stanford sent Mr MacGregor a further response in relation to his query of 4 July 2023 on the second quarterly return: “Please accept my apologies for giving you the incorrect information in relation to the quarterly return below. Please note that the quarterly return should include individuals that you continue to provide services to. Further information on stop notices and the effects of stop notices can be found here: Promoters of tax avoidance schemes: guidance - GOV.UK (www.gov.uk). On this occasion HMRC do not intend to charge a quarterly return penalty for the second quarterly return failure. Please do not hesitate to contact me should you require further clarification.”

35. On 16 February 2024, HMRC responded to the appellant stating that among other things, whilst “I accept that the company has not promoted to new clients”, nonetheless they were of the view that the appellant was in breach of the stop notice: “There is extensive evidence of the company continuing to undertake the organisation and management of the arrangements. Countrywide Partners continue to make salary payments to users and complete RTI requirements. Countrywide Partners have continued to make the arrangements available to users and is therefore a promoter in regard to the above legislation. Mr Wood has also stated that s236 C confirms continued operation is not promotion, I disagree with this analysis. Firstly, S236 A(7) applies to s236 C of which I have covered above. Secondly the wording of s236 C (5)(c) states: “P has provided services to C in relation to arrangements falling within the description specified in the stop notice, or in relation to a proposal for such arrangements.” This confirms that the providing of services, aka the continuing operation of the business in providing employment services, is promotion.”

36. HMRC also rejected Mr Wood’s other arguments as follows: “ Mr Wood claims that as the breach was not mentioned to the company during a recent phone call or in prior communication then HMRCs conduct is consistent with no breach of the Stop Notice. There is no requirement for HMRC to inform a promoter of a breach of Stop Notice in all its communications with the company. Countrywide Partners Limited received the penalty warning letter explaining that HMRC believe a breach has occurred and therefore the company has been informed. Mr Wood also highlighted the email that was sent to Mr McGregor on XXX as proof of HMRC conduct being consistent with no breach of Stop Notice. This email queried the second quarterly return. Upon review I can see that information contained within the email sent to Mr McGregor was incorrect, however in a prior email to Mr McGregor dated 5 April 2023 he was correctly informed that the providing of services was to be included and given a link to the online POTAS guidance which also specifically states that the providing of services is to be included within the quarterly return. As per ADML1200, HMRC is not bound by any advice it gives which is incorrect in law. There has been no legitimate expectation given to the customer regarding the compliance of a stop notice, I therefore believe that a penalty is due. Please find attached copy of the “Notice of penalty determination – failure to comply with a stop notice.”

37. In the penalty notice issued on 16 February 2024, HMRC stated this: “The penalty for failing to comply with S236 B(1) FA2014 has two parts: S236 B(1)- Continuing to promote arrangements in relation to which a person is subject to a stop notice •£100,000 in respect of one or more failures in relation to a particular stop notice •£5,000 for each person to whom arrangements (or proposals for such arrangements) of a description specified in the stop notice were promoted The penalty amounts outlined above are the maximum penalties chargeable. Based on the company’s Real Time Information (RTI) returns, you continued to employ 180 clients following the issue of the stop notice on 6 December 2022. In employing these clients you continued to be involved in the organisation and management of the arrangements, and therefore you continued to promote the arrangements after the date of the stop notice. As a result, the second part of the penalty amounts to a maximum of 180 x £5000 = £900,000. This is added to the first part of the penalty, a maximum of £100,000, to give a total penalty of £1,000,000. Due to the serious nature of a promoter continuing to promote arrangements after the receipt of a stop notice HMRC has applied the maximum penalty amounts.”

38. In cross-examination, Mr MacGregor gave the following evidence: (1) He is an employee of a company named IPS Administration Limited, which is an Isle of Man based company. The group employed everyone through one business in the Isle of Man and that pays the overheads and rent and supplies the office for all the staff. He works across the wider group and he does the accounts for the appellant. He is not a director. The current directors are Mr and Mrs Hall and Mr Christopher David Champion was also a director, but he resigned from all IPS group companies on 30 September 2024. As noted above, Mr Hall provided a witness statement but did not attend the hearing. (2) He confirmed that he read the stop notice in full and that he read the leaflets that accompanied it. He said he looked briefly at the legislation but basically his research was his conversations with Mr Wood. He thought he had looked at the online guidance at the gov.uk website but he could not pin that down to a specific date. (3) He accepted that (a) the appellant carried out the activities set out in the stop notice, prior to it being issued, in terms of making available signed contracts of employment, issuing payslips and remittance advices, making payments to the users and completing the “RTI” requirements, and (b) as stated in the stop notice, the appellant played a crucial role in the organisation and management of the arrangements and was a promoter of the arrangements in the course of a business. He agreed that after the date of the issue of the stop notice, the appellant continued to issue payslips to scheme users but added - just where it was contractually obliged to – and continued to issue payslips and remittance advices to users reflecting the amounts that would be credited to their bank accounts and made payments to them. (4) It was put to him that the stop notice told him/the appellant that the appellant must not do any of those activities. He said his interpretation of the word “promote” is different from HMRC’s interpretation. It was put to him that the leaflet which accompanied the stop notice clearly told the appellant to stop promoting immediately. He said that is correct but: “ again, it comes down to that word “promoting”. So in our eyes, and I think everyone, including HMRC, including our advisers, were all on the same page at the time that promoting meant stop selling. So prior to the stop notice all those statements are true, but once you come past the date of the stop notice, we no longer promoted those things, as in we no longer went out and sold these things to new parties.” (5) He was asked if it was his understanding that if a scheme user had already gone through a payroll by the time of the stop notice, the appellant could keep processing his wages in accordance with the scheme indefinitely. He said - not indefinitely. He said they made it clear to HMRC at the meeting in September 2022 that they could not stop suddenly and that they would need a period of “run off”, nobody objected to anything, their legal adviser was on board with it and: “in our eyes we were doing nothing wrong. We had stopped selling the scheme, we had done that from September 22. We were then in full dialogue with HMRC about what we were doing. Nobody was raising objections at that.” (6) It was put to him that he had accepted that the appellant was responsible for the organisation and management of the scheme and the leaflet makes it clear that that falls within the term “promote” so the leaflet told the appellant to stop promoting immediately. He said that is correct but again “it comes down to that word “promoting”. So “in our eyes, and I think everyone, including HMRC, including our advisers, were all on the same page at the time that promoting meant stop selling”. He said he accepted that the appellant had done that. But: “I think if we are down to one particular line in one fact sheet in amongst all the legislation, which I believe is not clearly written, then it is open to interpretation. And at that point nobody was objecting to the appellant’s interpretation, including HMRC.” (7) He said that at the meeting with HMRC in September 2022 he explained the risk as regards damage to reputation if the appellant stopped business suddenly; they had various products with various clients/agencies, and if they stopped one suddenly, there is a risk that that agency would then take their other business and walk away and go to a competitor. Hence, a sudden, abrupt stop in this particular area could damage the wider business. In fact, HMRC agreed they would not try to harm the wider business. (8) It was put to him that the meeting notes show that both the appellant and HMRC appear to have been working towards the same endpoint – for the appellant’s business to cease by December 2022. He said that they were in negotiations, there were talking points. He agreed that the appellant’s adviser, Mr Wood, is recorded as suggesting that the issuing of the stop notice should line up with the cessation of the appellant’s business. He added that it was a discussion point and this took place prior to seeing the stop notice, so they did not know what the stop notice would be asking them to do at this point. This was just a discussion at this point. We do not accept this evidence in full as set out in our conclusions. (9) He accepted that (a) the business of the appellant was organising and managing a tax avoidance scheme, (b) for doing that it took a 15% fee from the gross amount processed each payroll, (c) in real world terms, the organisation and management of the tax avoidance scheme involved the issuing of pay slips, reflecting amounts that were going to be credited to users’ bank accounts and the making of payments to the scheme users by way of salary and loan, and (d) the meeting in September 2022 was all about ceasing that business at the time of the stop notice. (10) He accepted that in any correspondence or meetings, or any contact that HMRC had with him/the appellant, HMRC never said that the appellant could keep administering the scheme following service of the stop notice and at no time did they say, “yes, you keep issuing payslips, you keep making salary payments, that is absolutely fine”. He added that he did tell them on a couple of occasions “we were doing it and they never came back and objected. It maybe that they didn’t read my notes properly, I don’t know.” (11) He was taken to the online guidance he referred to in his statement. He accepted that “cease” means “to stop” and the guidance means that the appellant had to stop organising and managing its tax avoidance arrangement. He said: “It does, but in the context of that I was there to effectively fact find, find out from HMRC what they want and take it back to directors, and the payroll team. So I wasn’t binding the company by anything I would say that day, but obviously I was doing the negotiations on behalf of the company. So when I go back after that I think, let’s see, is this logistically possible whatever we’ve agreed or do we need to go back to HMRC? And then obviously once we’ve seen the stop notice the feeling was well, this is asking us not to promote, we don’t sell anymore, and that was backed up by everyone at the time.” (12) It was put to him that the stop notice told the appellant that it immediately had to stop promoting the scheme, in that it had to immediately stop organising and managing that scheme and immediately stop running the scheme in an unlawful way by issuing payslips and making salary payments, which were split by paying somebody a national minimum wage topped up by a loan payment. He said that if that is what the notice was intended to do, it could have been worded an awful lot clearer, but, in his view, the notice is vague and ambiguous, and he thought not just the appellant but also its counsel and HMRC interpreted that a different way. He believes “everyone was on the same page in that interpretation, which is clear from the evidence”.

39. In re-examination, Mr MacGregor said that he took HMRC’s guidance to which he referred to mean that the legislation is designed to stop persons selling schemes, and it was clear from the meeting in September 2022 that the appellant had already exited the market in that sense. They had “no intention of selling these anymore when that was our new business model”. He clarified that he accepted that organisation and management was clearly done by the appellant prior to the issue of the stop notice, and it was done afterwards, but only to the extent that the appellant had statutory duties to comply with: “to a certain extent we had statutory requirements to contend with, as in, we still had employees we had to pay, so therefore payslips had to be issued by law. Monies had to paid to the employees by law.” In his view at the time of the meeting in September 2022 there was still an open discussion and they “never came away from this meeting with anything firmly resolved...these were negotiation points or discussion points, and…but…we made our case that ceasing business immediately could harm the business”. He thought HMRC were quite open to discussions, and that, after this meeting, they would go away and come up with some kind of deal, they would pay penalties on the DOTAS side, there were no stop notice penalties at this time, so they would come to a negotiated penalty at that point, and then they would come to an orderly stop at some point. We have commented on Mr MacGregor’s evidence in our conclusions.

40. At the relevant time Ms Stanford was the lead investigator in “counter-avoidance”. In her witness statement, Ms Stanford said this as regards HMRC’s decision to issue the penalty to the appellant: “17. On 3 July 2023, HMRC received representations relating to a potential publishing under s 86 Finance Act 2022 . Within that letter, AW stated that CPL had “virtually ceased operations”. I understood this sentence to mean that CPL had not stopped operations. I then reviewed HMRC’s summary of the Real Time Information (“RTI”) data which showed that, as at 5 January 2023, CPL had 193 users still employed and receiving national minimum wage (“NMW”). I checked CPL’s VAT returns and noted that it was continuing to make a profit. I concluded that CPL were likely continuing to operate the tax avoidance scheme. “18. On 18 August 2023, I issued a penalty warning letter to CPL. The letter explained that I believed CPL to be liable for a penalty for failing to comply with the Stop Notice. The letter outlined that CPL’s RTI records showed that it continued to employ users of the arrangements who were employed prior to the issue of the Stop Notice.”

41. Ms Stanford set out that on 13 September 2023 she had received representations from Mr Wood which she had reviewed and had concluded that a penalty was due: “21. … I reviewed the legislation at s235 FA 2014 . I concluded that as CPL continued to make salary payments to users and complete RTI requirements, this demonstrated that CPL satisfied the condition at s235(3) (b) FA 20141 of being to any extent responsible for the organisation or management of the arrangements. Furthermore, I concluded that the condition s235(2) (c) FA 20142 was satisfied as CPL continued to make the arrangements available to users and was therefore a promoter. I concluded that the continued operation of the arrangements was evidence that CPL was still involved in the promotion of the arrangements outlined in the Stop Notice

22. …I considered whether I (or HMRC more widely) had said or implied anything that could reasonably be taken to suggest that CPL had been compliant with the Stop Notice. CPL claimed that as the breach of the Stop Notice was not mentioned during the phone call of 16 May 2023 between myself, James Hughes and AW, or in prior communication, I had provided CPL with a legitimate expectation that it was compliant. As of 16 May 2023, I was not aware that CPL was continuing to promote the scheme. AW’s letter dated 3 July 2023, informed me that CPL had continued to promote the scheme. It was at this point I became aware the CPL had potentially failed to meet the requirements of the Stop Notice. CPL further claimed that my email to PM on 10 July 2023, regarding the second quarterly return, implied there was no breach of the Stop Notice.

23. I reviewed my email of 10 July 2023 and noted that information contained within my email to PM was incorrect. I had incorrectly stated that there was nothing to report in the quarterly return as there were no new customers. However, I noted that in a prior email to PM dated 5 April 2023, he was correctly informed that the providing of services to existing users was to be included and was given a link to the online POTAS guidance. The POTAS guidance specifically stated that the providing of services is to be included within the quarterly return.

24. I checked the HMRC Manual regarding providing incorrect advice to customers (ADML1200). It stated that HMRC is not bound by any advice it gives which is incorrect in law. PM’s email of 5 April 2023 queried the contents of the quarterly return, it did not query the definitions contained within the Stop Notice. I believed that there had been no legitimate expectation given to the customer regarding the requirements to comply with the Stop Notice.

25. I further noted CPL was made aware of the Stop Notice requirements, specifically the requirement to stop operations, in the meeting of 13 September 2022, prior to the issuance of the Stop Notice.

26. As CPL was provided with the factsheets, online guidance and verbal advice, I did not agree that I had provided CPL with a legitimate expectation that it was compliant with the Stop Notice. I believed I had provided clear instructions so as to facilitate compliance with the requirements of the Stop Notice. At no point were CPL told, either implicitly or explicitly, that it had met the requirements of the Stop Notice. I therefore concluded that a penalty was due.”

42. Ms Stanford said this as regards the calculation of the penalty and its approval within HMRC: “27. I calculated the penalty by using the figure for RTI users for 5 February 2023. I chose to use the February figure instead of the higher January figure, thus showing some consideration to CPL’s contention that “IPS need to run down the business more gradually” as per the meeting note of 13 September 2022.

28. The RTI for February 2023 showed 180 users were continuing to use the arrangements after the Stop Notice. The penalty consisted of £100,000 for failure to stop promoting and £5,000 for each person to whom the arrangements were promoted. This totalled £1,000,000.

29. On 15 December 2023, my manager, Craig Hinks, agreed with my decision. As I am not an authorised officer, my opinion was sent to an independent Authorised Officer, Colin Williams.

30. On 4 January 2024, Officer Williams agreed that the statutory conditions for charging a penalty were met and that the penalty amount had been calculated correctly.

31. On 14 February 2024, I emailed PM apologising for the incorrect advice RE: Quarterly Return as summarised in paragraph 23 above and clarified that HMRC would not be charging a penalty for the failure to provide quarterly returns.

32. On 16 February 2024, I issued the penalty determination letter for CPL’s failure to stop promoting the arrangements along with a cover letter addressing the representations made in AW’s letter of 13 September 2023”

43. At the hearing, Ms Stanford gave evidence as follows: (1) She did not agree that the stop notice does not make it clear that a person must stop absolutely every activity which is subject to the stop notice. She said the notice tells a person that “you must not promote arrangements”. She accepted that it does not explicitly state that a person subject to the notice cannot wind down a business. She added “but it also doesn’t outline many lists of things that a promoter could or could not do”. (2) She said she could not comment on whether the penalties imposed for a breach of a stop notice are severe or not. She noted that they are set by statute and they are calculated as set out in the statute. She agreed that £1 million is a large amount. (3) It was put to her that, in that context, it is odd that the stop notice does not expressly say “stop means stop”. She said it says “you must not promote the arrangements”, the notice is called a stop notice and states it is “about the stop notice”, so one could argue it is implied and to her it does say to stop; however, she accepts that it does not explicitly say “you must stop everything right now” or “you must stop supplying under contracts entered into prior to receipt of the stop notice”. She reiterated that it does say “you must not promote arrangements”. She accepted that it does not say expressly “you must change your business model in relation to existing clients”. (4) Ms Stanford confirmed that the other attendees at the meeting with the appellant in September were senior officers of HMRC and she reported directly to one of them. She agreed that there is no record in Mr MacGregor’s note of the meeting, of either Mr Wood, Mr Hughes (her colleague) or her saying directly to Mr MacGregor: “no, Mr MacGregor, stop means stop, you can’t run down your business”. She said that the note refers to the fact that operations were to cease and in her note of the meeting it states that her colleague explained the stop notice legislation and that HMRC would be looking to issue a stop notice which would help alleviate any “phoenixing”. She said she understood her colleague meant that “if you are ceasing and you aren’t planning on starting a new company with...the same users, then you won’t have to do much because we are going to tie in the stop notice to you ceasing” and her note records that the stop notice legislation was explained and then shows that they discussed the appellant stopping and leaving the mass-marketed avoidance market and that the appellant had said that they were going to cease. So the point made was that if that was the case, this stop notice was not really going to be doing much. (5) She accepted that her note does not record any statement by any senior officer, or from her, that “stop means stop, you cannot wind down your business”. She said “but we took the definition of cessation to mean stop”. She agreed that when HMRC is dealing with penalty provisions that HMRC needs to make its position expressly clear in a meeting where a taxpayer's representatives are talking about the winding down of a business. She said that they explained at the meeting that there would be penalties for non-compliance with the stop notice. She said the meeting was in September, the appellant requested a wind down because Mr MacGregor had said it was impractical for the appellant to stop straight away. So the appellant had that wind down period between September and December 2022, when the stop notice was issued. (6) She noted that the stop notice was issued with a fact sheet and she provided the online guidance to Mr MacGregor later, after the meeting. She said that in the meeting they took cessation to mean stop and, as of that meeting, she thought they were all on the same page, “that they were going to stop in December. I took them in good faith that they were going to stop in December…I think that was implied by us giving until the December for them in order to stop”. (7) It was put to her that when dealing with penalty notice provisions, which can result in a penalty of up to £ 1 million, the most appropriate course of action would have been for HMRC to have expressly said, “Stop means stop. You cannot carry on your business or you have to change your existing contracts”. She said: “Well, in hindsight, yes. Because we are here”. (8) She accepted that in her email exchanges with Mr MacGregor relating to the first quarterly return she did not expressly state that a “run-off” period is contrary to the stop notice legislation. She said: “but Mr MacGregor specifically asked me about the first quarterly return. So…that was the point I was addressing. In addition, he did say, “In run off at the 12 December.” That was only six days after the stop notice…So I took that to mean “We still have people at the 12, we no longer have people…after 12." She said that she probably should have clarified it, with hindsight, but he asked her about quarterly returns so she gave him the information about those but she should have responded more robustly. (9) As regards the correspondence in July 2023 on the second quarterly return, it was put to her that she should have said in response to Mr MacGregor: “Whilst you are referring to no new customers, if there are any customers in run off that is contravening the stop notice”. She said “Yes, but I had taken them at their word… in September that they were ceasing in December and the action points outlined, CP to stop operations by 31 December…2022”. (10) She could not remember why the stop notice was issued on 6 December 2022 rather than 31 December 2022 but noted there were the Christmas holidays. She accepted that it is surprising that HMRC did not contact the appellant to say they anticipated issuing the stop notice on 6 December in terms of making sure the appellant brought its business to an end by that date. She said that when it came to the penalty that was taken into consideration; HMRC did not charge the penalty from 5 January 2023 which would have covered December. The penalty was taken from 5 February 2023 onwards. (11) She said that once she had received Mr Wood’s representations in September 2023 she went back to her email of 10 July 2023 and realised she had made a mistake in it and decided she needed to check with her senior whether this raised a legitimate expectation. There was then a delay until February 2024, when her seniors decided she should go back and correct her error. That was not the only issue. It took seven months to do this due to “the governance of that penalty”. She had to submit to her manager how much the penalty should be and whether there was a legitimate expectation. He then reviewed it, as did the counter avoidance technical team and then finally the authorised officer (Mr Williams), who is a senior civil servant outside counter avoidance: “There is a lot of internal governance to make sure that, you know, we are correct in issuing the penalty”. About five people approved it. (12) She did not accept that it appears from this that even HMRC did not have a definitive view on the legislation. She said: “Our view was clear that stop meant stop. Our view was: have I given them a legitimate expectation regarding the stop notice by saying there is no need to provide a return for any clients you provided services to? That was the question that we were dealing with”. She accepted it was not ideal this took seven months to deal with within HMRC. (13) She was asked why she did not immediately go back to Mr Wood or Mr MacGregor when she reviewed Mr Wood’s representations of July 2023 to ask what was happening and alert them to the asserted breach and say to them “stop means stop”. She said that is why she issued the penalty warning letter in August 2023; she thought that would be enough. It was put to her that in her email to Mr MacGregor of 10 July 2023, she did not say that there was a problem but rather than there was nothing to report. She said he was asking about the quarterly returns so she answered his question about that but, in hindsight, she probably should have said, “You are also still promoting?”. She said, in effect, that now she thought the most appropriate course of action would have been to have said in that email: “stop means stop. This is HMRC's interpretation” but at the time she answered Mr McGregor’s question on reporting. She realised in September 2023 that what she had said in that email was incorrect on reviewing the representations then received from Mr Wood. (14) She confirmed that (a) the contents of the penalty letter were discussed with Mr Williams and her manager and others reviewed it as set out above, and (b) she recognises that under the penalty legislation HMRC is required to take into account all relevant considerations in setting the penalty and the amount of the penalty is not a target - it is a maximum amount. It was put to her that in light of what is stated in the penalty notice at the meeting in September 2022 HMRC should have said: “If you continue to employ any clients, have any employees, then you will be involved in the organisation and management of the arrangements which will be subject to the stop notice”. She said “no” because at the meeting they were discussing the appellant ceasing by 31 December 2022: “We took that to mean there were going to be no clients as at 31 December for them to promote or arrange or manage the said arrangements. So no, I do not think at that September meeting it would have been prudent to do so.” (15) It was put to her that there is no reference anywhere in the penalty notice to the co-operation of the appellant with HMRC, attending meetings and the email correspondence between Mr MacGregor and her, no acknowledgement that the appellant was represented by Mr Wood and was relying on him from at least September 2022, no recognition that she had got her advice wrong to Mr MacGregor in relation to the quarterly returns and that HMRC had not expressly said: “stop means stop”. She agreed these matters are not set out in the penalty notice. She said this as regards how the penalty was calculated: “So, obviously we could have chosen the higher figure of 193 of the users, but to give some contention to the fact that you stated you needed to run off, we used the lower one of 180. That pretty much reduces the penalty by £65,000, assuming that went for 5,000 times 13. We also need to take account of the fact that you continued to receive fees throughout. So, for instance, the VAT returns showed 3.2 million of income coming through the business. Fifteen per cent is your management fee, so 15 per cent of 3.2 million…comes out around about the 400,000 mark. So I knew that the appellant had had at least 400,000 in fees in that period. In addition, obviously every single user of the arrangement is just paying tax on national minimum wage. So there is 3.2 million pounds that is going through, of which only about, you know, £7.25, whatever the minimum wage was at the time, £12, whatever it is, is actually being taxed. So there is that tax gap there. And on top of that there is the advantage that Countrywide Partners has, which is that they are not paying employee NICs on the money. So all of that was taken into account as to why we ended up with the maximum amount of a million pounds. Agreed, that should have been in the box.” (16) She said that this information would have been in the submission to the authorised officer, but it did not make it into the box. When asked why this explanation is not in her witness statement she said HMRC do not tend to submit their internal governance documents to the tribunal but the explanation given is why the penalty is £1 million. She agreed this should have been set out in the penalty notice. Submissions and decision on whether the appellant was in breach of the stop notice.

44. The appellant made the following uncontroversial points on the correct approach to construction of the relevant provisions: (1) In construing the provisions of FA 2014 and any tax legislation the required approach to statutory interpretation is conveniently summarised by Lewison LJ in Pollen Estate Trustee Co Ltd v HMRC [2013] EWCA Civ 753 ; [2013] STC 1479 at [24]: “24. The modern approach to statutory construction is to have regard to the purpose of a particular provision and interpret its language, so far as possible, in a way which best gives effect to that purpose. This approach applies as much to a taxing statute as any other: see Inland Revenue Comrs v McGuckian [1997] 1 WLR 991 , 999; Barclays Mercantile Business Finance Ltd v Mawson [2005] 1 AC 684 , para 28. In seeking the purpose of a statutory provision, the interpreter is not confined to a literal interpretation of the words, but must have regard to the context and scheme of the relevant Act as a whole: see WT Ramsay Ltd v Inland Revenue Comrs [1982] AC 300 , 323; Barclays Mercantile Business Finance Ltd v Mawso n, para 29. The essence of this approach is to give the statutory provision a purposive construction in order to determine the nature of the transaction to which it was intended to apply and then to decide whether the actual transaction (which might involve considering the overall effect of a number of elements intended to operate together) answered to the statutory description. Of course this does not mean that the courts have to put their reasoning into the straitjacket of first construing the statute in the abstract and then looking at the facts. It might be more convenient to analyse the facts and then ask whether they satisfy the requirements of the statute. But however one approaches the matter, the question is always whether the relevant provision of statute, on its true construction, applies to the facts as found: see Barclays Mercantile Business Finance Ltd v Mawson , para 32." (2) Regard must be had to the purpose of the provisions and interpret the language, so far as possible, in the way which best gives effect to that purpose. External aids to interpretation may assist in determining the purpose and meaning of a provision. However, they cannot displace the meaning conveyed by the words of a statute that, after consideration of the context, are clear and unambiguous and which do not produce absurdity: see UBS AG v HM Revenue and Customs [2016] UKSC 13 at [61]; Rossendale BC v Hurstwood Properties (A) Ltd [2021] UKSC 16 at [15] and [16] and R (O) v Secretary of State for the Home Department [2022] UKSC 3 at [30]. (3) If there is perceived to be a gap in the legislation it is not the role for it to be cured by the tribunals given that it is not the constitutional function of the tribunals to in effect, legislate to fill clear gaps in the statutory provisions. That is a matter for Parliament as is shown by this statement by Lord Neuberger (with whom Lords Kerr and Reid agreed) in Lehman Brothers et al [2017] UKSC 38 at [120]and see also Lord Hodge in Project Blue Ltd v HMRC [2018] STC 1355 at [34]. We cannot see that this is relevant as there is no gap in the legislation in this case.

45. The appellant made the following main submissions in support of its stance that it was not in breach of the stop notice: (1) For the reasons set out below, the clear purpose of the relevant legislation is to stop the selling of the arrangements specified in the stop notice to new individuals. It is not to stop an existing business winding down its activities to bring them to an end in an orderly way, in compliance with the business’ pre-existing contracts which it has entered into prior to receipt of the stop notice. That is not the continuation of a business; it is the bringing of the activity to an end. That is what the appellant was doing at the relevant time. Moreover, the stop notice itself does not state “stop means stop” and that the appellant must stop providing services to existing clients and/or that it must change its commercial contracts so that they do not fall within any of the specified arrangements. If that is the intent it should have said: “You must stop supplying immediately, the services, under the commercial contracts which form the basis of the steps which we have set out in this stop notice, or you must alter the contract and vary them”. (2) The explanatory notes published when the relevant provisions in FA 2014 were introduced (by Finance Act 2021 ) support this interpretation. For example, para 1 of the notes states this: “This clause and Schedule amend Part 5 of the Finance Act 2014 ( FA 2014 ), the Promoters of Tax Avoidance Schemes regime (POTAS). POTAS applies a series of sanctions to a person carrying on a business as a promoter of tax avoidance. These amendments give HM Revenue and Customs (HMRC) the power to issue ‘stop notices’ to promoters of tax avoidance schemes at an earlier stage, to stop the sale of schemes before the scheme has been defeated . HMRC will be able to publish details of the promoters and scheme when a stop notice has been issued. These amendments widen the scope of the legislation to include as promoters certain other persons involved in promotion structures. The legislation also introduces a range of technical amendments.” (Emphasis added.) (3) There is nothing in Part 5 of FA 2014 which states that there must be an immediate stop to the activities carried on by a recipient of a stop notice in respect of the targeted arrangements save that the recipient “must not promote” (see s 236 B FA 2025). This means on a natural interpretation (as supported by the explanatory notes) that the target of the prohibition is sales of the arrangements to new third parties and not the winding down of any pre-existing activities. This is supported by the scope of s 236 C FA 2014 relating to quarterly returns, and s 236 D FA 2014 concerning the withdrawal of stop notices. If Parliament had intended to stop pre-existing clients from using the specified arrangements, it would have inserted language which is identical or substantially the same as that in 236(5)(c) FA 2014 which, effectively, prohibits the supply of any services to a person who has already received them. (4) HMRC’s guidance: “Promoters of tax avoidance schemes” also supports the appellant’s interpretation. It states this: • a stop notice - can be issued by HMRC to a person carrying on business as a promoter where the arrangements they are promoting meet certain conditions - the stop notice requires the promoter to immediately cease promoting the arrangements, along with certain other duties and requirements … Section 236 A — Power to give stop notices Section 236 A gives HMRC the power to issue stop notices. In addition to various duties placed on the promoter which are discussed below, the stop notice requires the promoter to immediately stop promoting the proposal or arrangements described in the notice or any that are similar in form or effect. This is designed to stop suspected promoters from selling schemes HMRC, on balance, think do not work. This will reduce the number of clients buying into such schemes, reducing the risk of taxpayers continuing to use a scheme for multiple tax years, potentially ending up with large tax bills if the scheme is ultimately found not to work. … Practical Implications Persons who are subject to a stop notice are required to cease any promotion activity in relation to the relevant arrangements at once. Recipients of a stop notice also become subject to the duties to - make quarterly returns to HMRC, notify clients and intermediaries….. A person who is subject to a stop notice must provide quarterly returns to HMRC including information about the clients to whom they have promoted the relevant arrangements in the quarter to which the return relates. The first return must cover the 3-month period commencing on the day the stop notice was given. Further returns are required for each subsequent 3-month period that commences within 3 years of the date the stop notice was given….. The following information should be provided in returns: The number of persons to whom the person subject to the stop notice has made a firm approach or provided services in relation to the relevant scheme in the period in which the return relates.” If HMRC are right in their interpretation of the effect of a stop notice in s 236 B(2) under “practical implications” HMRC would have said in very simple and plain words: “stop means stop. You must stop continuing to provide services under the existing contracts you have entered into, which are subject to the arrangements which we have identified in our stop notice” and “you need to vary your contracts, or you are in breach of the stop notice, and there are the following severe penalties which flow from that”. (5) The effect of non-compliance with a stop notice is that it results in a penalty being imposed under para 2 of schedule 35 FA 2014 . Clearly, the penalties are set at such a level that the financial burden imposed on a person is severe. Penalty provisions are to be interpreted on a narrow basis, and where two interpretations are available then the interpretation which favours a narrower and lenient construction is to be applied. In Baxendale-Walker v Revenue and Customs [2024] UKUT 154 (TCC) the Upper Tribunal said this: “4. The same reasoning applies so far as the principle against doubtful penalisation is concerned. The principle against doubtful penalisation reflects the approach the courts have taken that it is: “generally reasonable to assume that Parliament intended to observe what Bennion on Statutory Interpretation (7th Edn, 2017) in section 27.1 calls the “principle against doubtful penalisation”. This is the principle that a person should not be subjected to a penalty - particularly a criminal penalty - except on the basis of clear law” In R(OAO the Good Law Project) v Electoral Commission & Ors [2018] EWHC 2414 (Admin) at [34] the principle was summarised as follows: “If there is a reasonable interpretation which will avoid the penalty in any particular case, we must adopt that construction. If there are two reasonable constructions, we must give the more lenient one. That is the settled rule for the construction of penal sections (Tuck & Sons v Priester) (1887) 19 QBD 629 ) “Without doubt, Parliament cannot have intended a person to be subjected to paragraph 50 penalty whilst there was real doubt about whether one of the conditions to liability had been met, but again the safeguard against doubtful penalisation is the requirement that the Upper Tribunal considers the imposition of a paragraph 50 penalty to be 'appropriate'; it is hard to see how imposing a paragraph 50 penalty could be appropriate before any live questions around the paragraph 39 liability had been finally determined.” The principle against doubtful penalisation is clear and material factor supporting the appellant’s straightforward interpretation of the relevant provisions. (6) At the relevant time, the appellant had ceased to have any business at all since it was in the throes of winding itself down. FA 2014 does not provide a standalone definition of “business” specifically for the purposes of issuing a stop notice. However, the wording of s 236 A(7) FA 2014 s implies that the concept of “business” is tied to the activities of promoting tax avoidance schemes and is to be interpreted in the context of the broader provisions of FA 2014 and the overall DOTAS legislation such that there must be business as a matter of law and fact. There is no statutory definition of business and, as per Lord Diplock in Town Investments v Department of the Environment [1978] AC 359 ), it is an “etymological chameleon” and takes its meaning from the context in which it is found. See further the succinct summary of the term “business” in GE Financial Investments v Revenue And Customs [2023] UKUT 146 (TCC) (29 June 2023) at [173] to [180]. (7) The stop notice provisions should be considered in the wider context of the DOTAS legislation on the basis that a stop notice is intended to give effect to stopping the promotion of DOTAS arrangements. The purpose of the DOTAS legislation in the Finance Act 2004 is to alert HMRC to schemes and arrangements which individuals or corporations use and sell to third parties to avoid tax. Under those rules, HMRC can investigate such schemes and their providers and as a result may amend legislation, where necessary, to reduce tax avoidance arrangements that seek to circumvent the law. Under that legislation, anyone involved in the arrangements must notify HMRC of the arrangements and that enables HMRC to take early action. These arrangements were allocated an SRN under those rules such that HMRC has full visibility in terms of who is using them. In R (on the application of Walapu) v Revenue and Customs Commissioners [2016] EWHC 658 (Admin) , [2016] STC 1682 the DOTAS regime is summarised as follows at [11] and [12]: “11. The Disclosure of Tax Avoidance Schemes ("DOTAS") regime was introduced by Part 7 of the Finance Act 2004 entitled "Disclosure of Tax Avoidance Schemes". Pursuant to these provisions certain persons, normally the promoters of tax avoidance schemes, were required to provide HMRC with information about "arrangements" and "proposals for arrangements" (i.e. the tax avoidance schemes): where that arrangement or proposal might be expected to provide a person with a tax advantage in relation to a specified tax; where the tax advantage might be expected to be the main benefit, or one of the main benefit, of using the scheme; and, where the scheme fell within certain descriptions contained within the Regulations. There have been changes to the Regulations since 2004 and the scheme now in force was introduced in 2006.

12. In circumstances where a scheme is notifiable the promoter is required to provide specified information to HMRC. The obligation to notify normally accrues within 5 days of the marketing of the scheme or the making of the scheme available to clients for implementation. HMRC may issue a Scheme Reference Number ("SRN"). If so the promoter is required to pass the SRN on to the scheme users who, in turn, are obliged to notify HMRC of their use of the scheme. They do this normally by including the SRN upon their tax return. This enables HMRC to identify the users of a particular scheme.” (8) The point to be taken from the purpose of the DOTAS rules is that the related stop notice rules are aimed at stopping the promotion of tax schemes and not the orderly winding down of an activity in compliance with a stop notice. (9) On 4 August 2022, HMRC published information about the appellant and its arrangements on its “Current List of Named Tax Avoidance Schemes, Promoters, Enablers, and Suppliers”. Arguably from that time the appellant did not conduct any activities on a commercial basis and had no view to the realisation of profits. The appellant was simply limiting the legal damage that it would have obviously suffered as a result of a potential breach of commercial and employment contracts in respect of its activities (as fully described in the earlier decision). The tribunal also has the clear evidence of Mr MacGregor as to the winding down of the appellant’s business. (10) Cases including the Upper Tribunal’s decision in Ramsay [2013] UKUT 226 (TCC) have considered the following six criteria for determining if there is a business, taken from Lord Fisher (1981) 1 BVC 392, a VAT case: “(a) whether the activity is a ‘serious undertaking earnestly pursued’, a phrase derived from the judgment of Widgery J in Rael-Brook Ltd v Minister of Housing and Local Government [1967] 1 All ER 262 at 266, [1967] 2 QB 65 at 76, or ‘a serious occupation, not necessarily confined to commercial or profit-making undertakings’, a phrase derived from the speech of Lord Kilbrandon in Town Investments Ltd v Department of the Environment [1977] 1 All ER 813 at 835, [1978] AC 359 at 402, both of them cited to and referred to by the tribunal in their decision; (b) whether the activity is an occupation or function actively pursued with reasonable or recognisable continuity: per Lord Cameron in Morrison’s Academy [1978] STC 1 at 8; (c) whether the activity has a certain measure of substance as measured by the quarterly or annual value of taxable supplies made: again per Lord Cameron (at 8); (d) whether the activity was conducted in a regular manner and on sound and recognised business principles: again per Lord Cameron (at 10); (e) whether the activity is predominantly concerned with the making of taxable supplies to consumers for a consideration: per the Lord President (at 6); (f) lastly, whether the taxable supplies are of a kind which, subject to differences of detail, are commonly made by those who seek to profit by them: per the Lord President (at 6) and per Lord Cameron (at 10).” (11) Those criteria which are of relevance here (some are relevant in a VAT context only) are not met in this case: (a) Although, prior to the appellant being named as set out above, the activities were a serious undertaking earnestly pursued, they evidently cannot be characterised as such since that time. It cannot be said that there is a long-term strategy or that the activities were conducted to any serious financial plan. The goal of the appellant was simply to strike a balance between obligations to HMRC (including the stop notice) and not being sued. There is no “serious undertaking” where one is faced with such a ‘Hobson’s Choice’. (b) Since 6 June 2023, there is nothing being pursued actively or with reasonable or recognisable continuity. Activities would only continue until the final contractual obligations were fulfilled. (c) If one looks at this question in the context of the current matter, the substance of sales were in fast decline due to the winding down of the business. (d) There is no sound or recognised business principle. One does not run a business with no attention to making a profit and with a singular aim of not being sued. (e) The activities of the appellant are not at all predominantly concerned with making sales. The primary focus was winding the business down without being sued by clients or employees. (f) The conduct of the appellant is at odds with a business which was seeking to profit from its activities. For example, in the latter case, there would be a clear plan for the future to maximise revenues and profits. In the present case, the rump of the business was being wound down against the threat of legal action (g) Based on the factors set out above, it is clear that the activities, since the “naming and shaming” (allied to the fact that the stop notice was issued) meant that the appellant was no longer carrying out a business at all (as a matter of law and fact), let alone as a promoter, at the time of the purported breach. (12) Further, for there to be a breach of s 236 B(1) FA 2014 the legislation would specifically have to bring within the meaning of “promote” (within s 236 B(1)) and /or “business” the concept of carrying on “anything carried out in connection with the termination, or intended termination, of a business”. This strongly supports the view that actions that are taken in the winding down or closing of the business are not, absent provisions expressly bringing them into the definition, considered part and parcel of carrying on a business. It is notable that the ordinary definition of “promote” in the Oxford English Dictionary is: “Further the development, progress or establishment of (a thing); encourage, help forward, or support actively…” It cannot be said that the appellant was promoting and/or otherwise carrying on a business for the purposes of FA 2014 so as to constitute a breach of the stop notice. (13) The relevant activities carried out by the appellant do not satisfy the “organisation or management” test in s 235 FA 2014 . In the absence of any definition in the legislation, we must use the natural meaning of these words: (a) The Oxford English Dictionary defines “management” as the: “Organisation, supervision, or direction; the application of skill or care in the manipulation, use, treatment, or control (of a thing or person), or in the conduct of something”. Organisation, supervision or direction points to activities which are taken at a strategic level. In this context, it means a strategic position in relation to the arrangements. This is supported by the legislation as “management” follows “design” and “organisation” in the definition of promoter which each constitute high level activities. They are not merely “day to day” tasks like making payroll payments, sending out payslips or invoices. Since the notification of the intention of publishing of information concerning the appellant (on 6 June 2023), there has been no strategic, higher-level management in relation to the arrangements. Instead, the appellant has simply focused on the winding-down of the business in a fashion that limited exposure to legal action (as well as addressing the various interventions made by HMRC). (b) The Oxford English Dictionary “organisation” as: “The action or process of organizing, ordering, or putting into systematic form; the arrangement and coordination of parts into a systematic whole; spec. the action of banding together or gathering support for a political cause.” Again, since 6 June 2023, there has been no ‘putting into systematic form’ the arrangement – in merely winding down the appellant’s legal obligations. At no point has HMRC addressed the clear fact that the appellant cannot simply cease activities without being in prima facie breach of its contractual obligations (including to end-users/agents and its employees). (c) Running down a business is consistent with complying with a stop notice. Simply letting existing contracts expire, including providing tax forms for employees, is not “management”, “design” or “organisation” of the business. These are simple, mechanical, administration activities. (d) Further and/or in the alternative it is not the carrying on of a business. Any company cannot realistically stop all activities or switch the workers to a materially different contract of employment within a month or other arbitrary time period. Broadly, it appears that HMRC’s approach is to impose a “Hobson’s Choice” on the business – you either breach contracts or risk challenge that there has been breach of a stop notice. It seems difficult that there could be a policy intention for this to be the case either. Further, if issuing payslips is considered as “management” or “organisation” of the arrangements it then becomes difficult to see why completing quarterly returns under s 236 C FA 2014 or responding to HMRC correspondence does not constitute the same. (14) In HMRC’s list of avoidance schemes subject to a stop notice (as updated on 30 October 2025), the language used again supports the appellant’s interpretation. It states that HMRC issues stop notices to promotors of tax avoidance schemes, “requiring them to stop selling or promoting the scheme.” (15) It is notable that in the DOTAS rules in FA 2004 as regards the meaning of promotor, the term a “relevant business” is defined whereas the term “business” is not defined in FA 2014 . For DOTAS purposes, Parliament very specifically chose for its own concept of relevant business in order for a person to be identified as a promotor. It is also notable that sub-para (1A) emphasises that the only situation in which a person is deemed to be both carrying on a business and as a promotor is that specified in that provision.

46. In our view, the appellant was in breach of the stop notice when the penalty notice was issued by HMRC. As HMRC submitted, the scheme of the legislation is clear and the stop notice is clear in identifying how the legislation was relied on by HMRC: (1) An authorised officer may give a person a stop notice if the officer “suspects that the recipient promotes, or has promoted, arrangements of a description specified in the notice or proposals for such arrangements”. (2) The circumstances where a person “promotes” or has “promoted” arrangements are set out in s 235 FA 2014 and include (a) where the person is responsible to any extent for the design, organisation or management of the arrangements, and (b) where the person does anything in connection with those arrangements or that proposal that would, if those arrangements or that proposal were relevant arrangements or a relevant proposal, “ cause the person to be carrying on a business as a promoter, or to be treated as such, for the purposes of this Part” (emphasis added). (3) The effect of a stop notice is that the person subject to it must not “ promote - (a) arrangements that meet the description specified in the notice or that have similar form or effect to the arrangements of that description ; or (b) any proposal for such arrangements” (emphasis added). The term “promote” is clearly intended to be interpreted in accordance with s 235 which sets out who is a promoter and in effect what constitutes promoting. (4) In the notice (a) HMRC clearly identified why they suspected the appellant of promoting the specified arrangements, namely, that they suspected it of making the specified arrangements available for implementation and of being the person responsible to any extent for the organisation or management of the arrangements, (b) HMRC set out what they considered to constitute organisation and management of the arrangements by the appellant, namely, (i) making available signed contracts of employment, loan agreements and bonus scheme offers, (ii) issuing payslips/remittance advices to users reflecting the amounts that will be credited to their bank accounts either by way of salary or loan payment; and (iii) making salary payments to users and completing “RTI” requirements, and (b) HMRC specified that the person subject to the notice (the appellant) must stop promoting the specified arrangements. Moreover, the factsheet sent with the stop notice stated: “The notice requires the recipient and the other persons subject to the notice to immediately stop promoting arrangements of the kind described in the notice.”

47. In our view, (1) HMRC’s interpretation of the provisions as reflected in the stop notice accords with the plain natural meaning of the relevant provisions, and (2) any reasonable reader of the stop notice could not fail to appreciate that it meant that the person subject to it must stop “promoting” the specified arrangements in the sense of entirely and immediately ceasing to carry on implementing, organising and managing them through the activities specified in the notice.

48. It is plain that when and after the stop notice was issued the appellant was carrying on its organisation and management activities, as Mr McGregor accepted, and is evident from the “RTI” data, its accounts and its VAT returns. The “RTI” data shows that this continued until February 2024 albeit that the number of users shown gradually declined. The appellant continued to take its 15% fee and on a rough calculation received around £480,000 from doing so. During the relevant 16 months the appellant had outputs for VAT purposes which exceeded £3.2 million.

49. In our view this activity was carried on by the appellant as a promoter in the course of a business: (1) The appellant asserts that, during this period, it was not trying to make a profit; rather, so the appellant asserts, it was trying to avoid being sued and complying with statutory obligations. However, no statute has been identified in relation to any compliance obligations, nor has the appellant identified anything within its contracts that would have prevented it from operating a tax compliant payroll system. HMRC made the point that, as recorded in the earlier decision, many of the users were not aware of how their pay was being organised so it is unlikely that users were going to object if behind the scenes the appellant changed its payroll mechanisms to operate in a tax compliant manner. (2) We take HMRC’s point that it was possible for the appellant to have amended its payroll functions following receipt of the stop notice such that all the earnings/gross contract values were processed through the payroll instead of being artificially separated between the payment of national minimum wage and loan payments. As such, the appellant could have continued to operate and manage the “run off” of its business in a way that did not contravene the stop notice but in fact it continued to operate as before albeit that it was winding its business down. (3) In any event, we can see no viable argument that a person who has acted as promoter in an established “business” instantly ceases to carry that business on when it starts to effect a winding-down of the activities which comprise that business (whether that occurs, as here, due to HMRC taking action to stop the activities or otherwise). It seems it is not disputed that the appellant had been running a “business”, as that term is generally interpreted as set out in the caselaw the appellant referred to. It is a necessary consequence of an entity winding down an established business that the entity stops taking on new business/clients and therefore may well cease to aim for and generate an overall commercial profit; the aim becomes to gradually effect a cessation of the activities in an orderly fashion, in as cost effective a manner as possible. That does not, in our view, somehow change the essential character of the entity’s activities and the case law does not support the appellant’s view to the contrary. The caselaw is clear that, depending on the context, it is not necessary for an entity to be regarded as carrying on a business that the purpose of the activity is to generate an overall commercial profit. Moreover, ending a business in an orderly fashion is as much part of the overall business activity as taking action to build the business up in the first place.

50. As HMRC submitted, the proposition that some form of ‘run off’ period should be allowed so as to enable the orderly exit of users from a tax avoidance scheme is wholly contrary to the purpose of the legislative regime, namely, to “stop” the “promotion” of the specified arrangements. The legislation is geared, in effect, to protect the public purse and not to protect the administrative arrangements of the promoters or users of specified arrangements. On the plain terms of s 236 B FA 2014 a stop notice takes effect upon service and thereby requires compliance immediately. On a purposive approach plainly Parliament did not intend, as is the effect of the appellant’s argument, to enable promoters to continue to use tax avoidance schemes unchecked for those who adopt it before a stop notice is issued. In this case, every time a payment to a scheme user is processed there is in effect another sale of the scheme and another fee is claimed, by the appellant.

51. We do not consider that proposition set out in the Baxendale-Walker case is of assistance here. The tribunal is not faced with two reasonable constructions of the relevant provisions; there is only one proper construction. The fact there is a definition of “business” in the DOTAS regime is irrelevant. The definition is of the different concept of a “relevant business”. On any view, in the context of the particular arrangements in question, the terms “management” and “organisation” encompass the activities which HMRC identify the appellant carried out. Reasonable excuse and amount of the penalty

52. The appellant submitted that the correct approach to follow is that set out in Archer v HMRC [2023] EWCA Civ 626 ; [2023] STC 1142 . In that case, the Court of Appeal commented at [18] on the “useful guidance” provided by the Upper Tribunal in Perrin v HMRC [2018] UKUT 156; [2018] STC 1302 (“ Perrin ”) and at [[19] and [21] said this: “Reasonableness is to be determined in each case depending on the facts. The analysis of Judge Berner in Barrett v HMRC [2015] UKFTT 329 (TC) at [161] is of assistance: "The test is one of reasonableness. No higher (or lower) standard should be applied. The mere fact that something that could have been done has not been done does not of itself necessarily mean that an individual's conduct in failing to act in a particular way is to be regarded as unreasonable. It is a question of degree having regard to all the circumstances, including the particular circumstances of the individual taxpayer. There can be no universal rule; what might be considered an unreasonable failure on the part of one taxpayer in one set of circumstances might be regarded as not unreasonable in the case of another whose circumstances are different…. ….The standard to be adopted is that of the responsible trader, explained by Judge Medd QC in The Clean Car Co Ltd v C&E Commissioners [1991] VATTR 234 as follows: "The test of whether or not there is a reasonable excuse is an objective one. In my judgment it is an objective test in this sense. One must ask oneself: was what the taxpayer did a reasonable thing for a responsible trader conscious of and intending to comply with his obligations regarding tax, but having the experience and other relevant attributes of the taxpayer and placed in the situation that the taxpayer found himself at the relevant time, a reasonable thing to do?"”

53. In Perrin, which the appellant also referred to, the Upper Tribunal considered whether the appellant had a “reasonable excuse” in the context of a penalty issued under schedule 55 of the Finance Act 2009 At [81] of that judgment, the Upper Tribunal set out a recommended process for the tribunal when considering whether a person has a reasonable excuse: “ (1) First, establish what facts the taxpayer asserts give rise to a reasonable excuse (this may include the belief, acts or omissions of the taxpayer or any other person, the taxpayer's own experience or relevant attributes, the situation of the taxpayer at any relevant time and any other relevant external facts). (2) Second, decide which of those facts are proven. (3) Third, decide whether, viewed objectively, those proven facts do indeed amount to an objectively reasonable excuse for the default and the time when that objectively reasonable excuse ceased. In doing so, the Tribunal should take into account the experience and other relevant attributes of the taxpayer and the situation in which the taxpayer found himself at the relevant time or times. It might assist the Tribunal, in this context, to ask itself the question “was what the taxpayer did (or omitted to do or believed) objectively reasonable for this taxpayer in those circumstances?”

54. At [82] the Upper Tribunal added: “One situation that can sometimes cause difficulties is when the taxpayer's asserted reasonable excuse is purely that he/she did not know of the particular requirement that has been shown to have been breached. It is a much-cited aphorism that “ignorance of the law is no excuse”, and on occasion this has been given as a reason why the defence of reasonable excuse cannot e available in such circumstances. We see no basis for this argument. Some requirements of the law are well-known, simple and straightforward but others are much less so. It will be a matter of judgment for the FTT in each case whether it was objectively reasonable for the particular taxpayer, in the circumstances of the case, to have been ignorant of the requirement in question, and for how long.”

55. The appellant also relied on the decision in Marlow Rowing Club [2020] UKUT 0020; [2020] STC 564 in particular the following comment at [67]: “As is clear from the approach to the question of reasonable excuse in Clean Car and indeed in Perrin, the judgment of whether a taxpayer has a reasonable excuse will depend on the evaluation of the particular facts relevant to the taxpayer’s circumstances. There is no benefit in focussing on a selection from the multitude of FTT decisions on reasonable excuse, each of which will turn on their facts, to extract more specific points of principle. This is illustrated by the way in which the UT in Perrin dealt with the situation where a taxpayer’s reasonable excuse argument was based on ignorance of the law, an issue which arose in a number of tribunal decisions, and concluded that ignorance of the law did not necessarily mean the taxpayer’s argument failed. The UT explained (at [82]) that it will be a matter of judgment for the tribunal in each case whether it was objectively reasonable for the particular taxpayer, in the circumstances of the case, to have been ignorant of the requirement in question. We make the same observation in relation to questions regarding what actions should be taken in the face of law which is said to be unclear; the objective reasonableness of what the taxpayer did or did not do in the light of that legal backdrop will depend on the particular case, and the relevant legal provisions. ”

56. At [81] the Upper Tribunal stated this: “Legal advice always gives person reasonable excuse? HMRC argue that, in any event, the mere fact of seeking legal advice does not, and should not, afford a “reasonable excuse”. We agree. But this is not because, as HMRC argue, that were it otherwise, this would be contrary to public policy as those who were financially able to receive eminent legal advice would be advantaged over those who could not afford to do so. Rather, it is, as HMRC rightly point out, because each case must be examined on its merits. As set out in the Clean Car test the hypothetical appellant will be taken to share such attributes of the particular appellant as the tribunal considered relevant to the situation – whether and what advice it is considered appropriate to seek and from whom will depend on the particular facts pertaining to the particular appellant.”

57. Finally the appellant submitted that the following decisions of the former VAT tribunal show that a taxpayer can have a reasonable excuse for making an error where the relevant law is confusing ( Weldon-Hollingsworth ([1995] VAT Decision 13248), Standing Conference of Voluntary Organisations ([2002] VAT Decision 17827) and Saint Benedict’s School ([1992] VAT Decision 7235)); and another in support of the view that the law should be regarded as complex if it is not reasonably obvious why the law was as it was ( Malin ([1992] VAT Decision 10085)).

58. The appellant made the following main submissions: (1) Applying the legal principles set out above, as to reasonable excuse, all the facts and matters set out in the grounds of appeal, including the conduct of the appellant in engaging with HMRC via Mr MacGregor and Mr Wood (such as by attending meetings with HMRC and corresponding with them), in not taking on any new users of the business model, and not carrying on any business relating to the arrangements subject to DOTAS are all relevant considerations as to why there is a reasonable excuse in respect of the penalty – all which justify its reduction to nil. (2) The appellant received formal advice on the issue from Mr Andrew Thornhill KC on the issue of stop notices and whether they could continue to “run-off” their business. This advice is clearly consistent with the position taken by appellant. The appellant has given permission to provide this advice and waived legal privilege. Mr Thornhill’s advice was unequivocal that winding down the business did not constitute “promotion” in the statutory context and neither should it from a common-sense point of view. (3) In July 2023 Ms Stanford confirmed to Mr MacGregor that his email on reporting was sufficient for HMRC but then subsequently reversed the position in February 2024. However, the HMRC officer stated that there was no legitimate expectation for the appellant to rely on this information. HMRC has discretion over whether it imposes a penalty, unlike the position when it comes to the collection of taxes. As such, this should be taken into account when determining whether the imposition of a penalty is justified at all. The ambiguity in the legal position (as demonstrated by HMRC via Ms Stanford) clearly shows that the appellant was entitled to act as it did in respect of the stop notice in reliance on Ms Stanford. Moreover, it demonstrates that HMRC’s view as to the application of the law was continuing to evolve. (4) HMRC’s main guidance which accompanies the list of schemes / arrangements that are subject to a stop notice gives no suggestion that the meaning of “promotion” would extend to winding down the business: “Stop notices are one of the ways in which HMRC tackle tax avoidance and those responsible for promoting it. The main aim of issuing stop notices is to reduce the number of tax avoidance schemes that are being marketed. This makes it harder for people to get caught up in them. When HMRC issues a stop notice to a promoter, it means: • the promoter who receives the notice must stop selling the specified scheme • the promoter who receives the notice must also pass a copy of it to certain associated persons, who are also subject to the stop notice and must also stop selling the promoter who receives the notice must also pass a copy of it to certain associated persons, who are also subject to the stop notice and must also stop selling the specified scheme • all those persons subject to the notice must inform HMRC of all the people they have promoted the scheme to and any they continue to promote it to • the persons subject to the stop notice must inform all clients and intermediaries that they are subject to a stop notice, what this means, and provide them with a copy of the stop notice” (Emphasis added.) (5) Like Mr Thornhill’s advice, it contemplates “promotion” in the natural, non-technical definition of the term. This reinforced by the statement of the aim is to “reduce the number of tax avoidance schemes that are being marketed”. This stated aim is repeated in other HMRC communications around stop notices. This stated aim is repeated in other HMRC communications around stop notices. Bearing this in mind, and the complexity of the definitions around “promoter” in the legislation, this should also be considered as a mitigating factor in any decision around penalties. (6) HMRC have imposed the maximum penalty which seems to have been used as a target as opposed to them reaching a reasoned decision as to the amount. The requirement is for the amount of the penalty to be arrived at after taking account of all relevant considerations, including the matters specified in the rules. It is a mandatory requirement for the officer imposing the penalty to take into account all relevant considerations but it does not appear they have done that. There has been absolutely no discount and no consideration given to the very important factors identified above. Whilst this penalty regime does not contain the discounts specified to apply to general penalties (such as for cooperation and disclosure etcetera) given the statutory test, these matters should have been taken into account. Penalty legislation must be interpreted on a narrow basis and, where two interpretations are available, the interpretation which favours a narrower and lenient construction is to be applied (as set out above)

59. In our view, essentially for the reasons given by HMRC, the appellant does not have a reasonable excuse: (1) The appellant cannot claim it relied on the advice of Mr Andrew Thornhill KC in any material sense given it was obtained only on 4 September 2023 some 9 months after the stop notice was issued and after the appellant was informed on 18 August 2023 that it was liable to pay a penalty for failing to comply with the stop notice. In any event, it is readily apparent to a reasonable taxpayer with the attributes of the appellant (as a sophisticated operator of tax avoidance schemes) that the opinion is unreliable given, in particular, that it does not consider s 235 FA 2014 , which contains the definition of a “promoter” and the concept of “promoting” as used in these rules. (2) The provision of incorrect information relating to the content of quarterly returns, has had no material consequence in that HMRC did not issue any penalty in respect of the incorrect return. Ms Stanford was clear that, with hindsight, matters could have been managed better. However, the appellant is a sophisticated purveyor of a tax avoidance schemes who had advisers available to it and Mr MacGregor is a chartered certified accountant. Such a person does not have a reasonable excuse on the grounds it required greater guidance by HMRC through the process. (3) Moreover, there is no ambiguity in the guidance and/or in any of the written information provided by HMRC. As set out above, the stop notice makes entirely clear to the reasonable reader what HMRC's position is and it mirrors what is stated in the legislation. The language used in HMRC’s factsheet and guidance is clear and appropriate; again it is in line with the wording of the legislation. In our view, Ms Stanford’s evidence, as supported by her contemporaneous notes establishes that, at the meeting held in September 2022, HMRC made it clear to the appellant that it was expected to “cease” or “stop” its activities in respect of the scheme by the end of December 2022 to coincide with the time that HMRC intended to issue the stop notice and that it appeared that the appellant (acting through Mr MacGregor and Mr Wood) took that on board. As he said and as his notes show, Mr MacGregor raised that the appellant would have difficulty in ceasing its activities instantly but in light of all the relevant evidence that appears to be why the parties agreed to work to a December date for the issue of the stop notice and cessation of the appellant’s activities in respect of the scheme (some three months after the September meeting). We do not accept Mr MacGregor’s implausible explanation, given what is stated in the meeting notes and what subsequently occurred (namely, the issue of the stop notice in December 2022) that these were just discussion points and/or that he can have been in any doubt as to HMRC’s views as to what the stop notice would require. (4) In our view, in all the circumstances, charging the maximum penalty is appropriate. The appellant continued to use the scheme as shown by the “RTI” data and continued to charge fees for doing so to the tune of around £480,000. Ms Stanford’s evidence is that, given the discussions that took place in September 2022 in relation to the appellant ceasing its business in December 2022, she effectively allowed the appellant credit for that and in effect started the penalty calculation only from 5 February. Whilst £1 million is a large number, we consider it is reasonable given that it represents roughly twice the amount of fees the appellant realised from the scheme in the relevant period. A smaller penalty of, for example, only £500,000 would provide no real deterrent value because that would just mean that the business had not taken any fees for the period as it should not have done in light of the stop notice. We accept HMRC’s stance that, in these circumstances, the penalty is intended to be punitive and significant in order for it to have a deterrent effect and charging twice the amount of the fees taken in a period does not seem unduly punitive. It must also be borne in mind, as Ms Stanford took into account, that during that period of time when the appellant was still trading, it was still putting users through its books and tax was still being lost to the Exchequer. Conclusion

60. For all the reasons set out above, we have concluded that (1) the appellant failed to comply with the stop notice, and (2) the penalty imposed upon it by HMRC of £1 million was correctly imposed in the correct amount. Accordingly, the appeal is dismissed.

61. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. RELEASE DATE : 04 th MARCH 2026