UKFTT 274 (2009) Vaccine Research LLP v HMRC

Closure Notice direction - Taxpayer won

Case Summary:

The firm sought a direction under section 28B(5) of the Taxes Management Act 1970 requiring a closure notice, within 30 days of the hearing on 2 October 2009, in respect of an enquiry into the partnership’s return.

HMRC were prepared to give a closure notice but requested 3 months from the hearing date as they still wished to make some enquiries of third parties and were concerned that they may not be able to obtain it within the 30 days.  But there was no guarantee that the necessary procedures for obtaining that information would be completed within 3 months.  The Tribunal found HMRC’s position illogical. 

 ”They accept that they may have to make a decision without that information and therefore by implication they agree they can do without it but they are not prepared to concede that they should make that decision within a shorter period in the hope that they will have the third party information by then.”

A closure notice need not be a long or complicated document nor need it set out reasons (Tower McCashback LLP 1 -v- HMRC [2008] STC 3366 per Henderson J).  An officer can be expected to make a decision once he has conducted his enquiry to the point where it is reasonable for him to make an informed judgment which may be expressed in broad or even alternative terms (Eclipse Film Partners No 33 LLP -v- HMRC [2009] UKSPC 00736 per Judge Edward Sadler). 

HMRC’s concession that they would, if necessary, make a decision on the information they now had indicated that they had conducted the enquiry to the point where it is reasonable for them to make an informed judgment which they could express in broad terms or in alternative forms in a simple document.

So HMRC’s request that they should be allowed 3 months was rejected and it was decided the closure notice should be given within 45 days of 2 October.