Open and shut by Mark McLaughlin

Mark McLaughlin looks at HMRC enquiries into self-assessment returns and considers when it might be appropriate to apply to the First-tier Tribunal for a direction that HMRC issues a closure notice.

HMRC enquiries into self-assessment returns can be a long, time-consuming, and potentially costly process. This can sometimes lead to frustration and resentment, with the taxpayer (or adviser) perhaps considering that HMRC is unduly prolonging the enquiry, or possibly that the HMRC officer is on a ‘fishing expedition’ by extending the scope of the enquiry into new areas.

Application for closure notice

However, there is an important protection available to taxpayers in such circumstances. The legislation dealing with closure notices by HMRC at the completion of enquiries into personal or trustee returns (TMA 1970, s 28A) includes a facility for taxpayers to apply to the tribunal for a direction requiring HMRC to issue a closure notice within a specified period (s 28A(4)). There is a similar statutory protection in respect of HMRC enquiries into the tax returns of partnerships (TMA 1970, s 28B(4)) and companies (FA 1998, Sch 18, para 33).

It should be noted that taxpayers can also apply for a tribunal direction that HMRC issues a partial closure notice (PCN). This allows specified matters in an enquiry to be resolved in advance of a final closure notice, through the issue of the PCN. However, this article focuses on applications to the tribunal for directions that HMRC issue final enquiry notices.

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