Commentary

A6.418B Form and validity of closure notices

Administration and compliance

A6.418B Form and validity of closure notices

A6.418B Form and validity of closure notices

An enquiry into a return of an individual, trustee, partnership or company return, is completed when an HMRC officer notifies the taxpayer that he has completed his enquiries and states his conclusions, ie what (if any) omissions or understatement of income, gains or business profits he considers to have occurred and the amount of additional tax due in respect of those omissions or understatements. Such a statement is on a 'without prejudice' basis so that if the conclusions are not agreed, HMRC is not bound by them in any subsequent proceedings1.

The self assessment legislation requires that any matter to which the enquiry relates is completed by a partial closure notice, where applicable, and by a final closure notice when all enquiries are completed2. This notice gives certainty to the taxpayer and prevents HMRC from making any further enquiries into that year except on the grounds of discovery (see A6.701). It takes effect when it is issued3.

The closure notice takes effect when it is issued and it must4:

  1.  

    •     inform the taxpayer that the enquiry has been completed, and

  2.  

    •     state the inspector's conclusions

Case law regarding the validity of closure notices

The scope and wording of a closure notice have been considered in the following cases.

Case lawCommentary
Closure notices perform a public function and this should be considered when a notice is being written.In Tower MCashback LLP1 (and cross-appeal)5, the Supreme Court held that 'in issuing a closure notice

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