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Do you know why your ILR SET (O) is delayed? From what I have seen in this forum, TIer 1 to ILR often involves a lot of scrutinies. In my opinion, whatever is causing the delay will not disappear just by applying for ILR (LR). what actions have you taken to get a response from HO? Have you involved your MP?
The tax amendment issue won't be ignored for ILR based on Long Residence. You could still be refused for the same reasons as Set(O).