Closure Notices either confirms that the Tax Return requires no amendment or makes changes to it to give effect to HMRC’s conclusions, thus altering the tax due.
A taxpayer (or their adviser) can apply to the tribunal for a Closure Notice at any time following the commencement of the enquiry.
Therefore receiving a Closure Notice at the end of any challenge by HMRC is arguably a taxpayer’s goal in life. Its all over. Taxpayers can get their lives back!
How are Closure Notices obtained?
A Closure Notice can only be achieved with the agreement with HMRC. If there is no additional duties (tax) to be paid, HMRC will conclude matters by a simple letter. If there are duties to be paid, a Settlement Agreement will be the contract signed by all parties to conclude matters.
Does a Closure Notice mean the end?
Once closure has been reached, there are very few limited ways in which an investigation can be reopened. These are primarily where:
- New information has become available that can impact upon an agreed Settlement; or
- The taxpayer has either lied or misled HMRC.
A Closure Notice is therefore the point at which “a line is drawn in the sand”. Occasionally HMRC may ask questions on the same matter in error in which case, the taxpayer should not answer the questions raised but instead refer HMRC to the previous correspondence.
Can a taxpayer seek a Closure Notice?
Yes. A taxpayer can seek a Closure Notice from the First Tier Tribunal without needing the agreement of the Inspector.
A Closure Notice is often sought if an investigation is unnecessarily prolonged having failed to identify any taxable adjustments.
Help is at hand
If you would like to discuss this matter further, please contact me at firstname.lastname@example.org or on 07979 313 010.