Note that this guidance note uses the term compliance check in line with HMRC’s current terminology. However, the term ‘enquiry’ is still used in the legislation referenced.

HMRC will close a compliance check into a tax return once it has successfully addressed the perceived risks (with or without the agreement of the taxpayer / adviser). These risks will normally have been identified before the check began and as the check progresses. HMRC and taxpayers may resolve and close individual aspects by way of a partial closure notice (PCN), whilst leaving other matters open. When all issues are resolved, a final closure notice is issued.

HMRC may have found nothing wrong with the tax position being checked or may have found an inaccuracy. During the check HMRC should normally have asked for interim payments of late paid tax and Class 4 national insurance contributions if applicable and considered the position regarding interest and penalties.

If the check is closed without any inaccuracy being identified, HMRC must send a final notice to the taxpayer