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HMRC internal manual

Enquiry Manual

Working the Enquiry: Closure Applications: Linked Enquiries

The taxpayer may apply to the tribunal for closure where there are linked enquiries. These will include enquiries into partnership and partners’ returns and into companies and directors.

Where you received notice that closure applications have been made to the tribunal in respect of linked enquiries handled by different offices you should, wherever possible, liaise with the office dealing with the other enquiry (where relevant) to ensure that you both adopt a consistent approach. Liaison will clearly be more straightforward if the linked enquiries are handled in the same office.

Partners and partnerships

The giving of a notice under Section 12AC(1) into a partnership return is deemed to include the giving of a notice under Section 9A or paragraph 24 into the returns of all the partners, whether or not they have all filed their returns by the date that the Section 12AC notice is given (Section 12AC(6)).

Where the partnership return is under enquiry, the deemed enquiries into the partners’ returns will be dependent on the main enquiry. An application for a direction to complete the enquiry into the partnership return can be made under Section 28B(5) EM7060.

An individual partner may attempt to apply for a direction for the issue of a closure notice in respect of the deemed notice of enquiry into his or her personal return. If you receive or become aware of such an application you should explain to the taxpayer that the closure of your enquiry is dependent on the resolution of your enquiries into the partnership return and that a deemed enquiry is not susceptible to challenge under Section 28A(4) in the way that an actual Section 9A enquiry is. If the taxpayer persists in the application you should resist it at the tribunals hearing on the basis that the taxpayer has no grounds for making the application.

An application can be made by a partner for the issue of a closure notice in an actual enquiry into non-partnership matters included in the partner’s own return. The same considerations apply here as would apply to an application by an individual taxpayer.

Companies and directors

A closure application may be made where there are linked enquiries, for example enquiries into group or associated companies, or into companies and directors, or into companies and pension schemes operated by them as employers.

There is no formal statutory link between the returns of

  • associated companies
  • companies in the same group
  • companies and directors
  • companies and their shareholders, or
  • companies and their pension schemes.

Where linked returns within these categories are under enquiry, you may be unable to complete your enquiry into one return until you have arrived at a conclusion in respect of the other. But each company, director, shareholder or pension scheme is entitled to apply separately for a direction for you to complete your enquiry.

If you receive an application in these circumstances, you should explain to the company, the director, the shareholder or pension scheme or the agents acting on their behalf that your enquiries are interlinked and cannot be separately concluded. You may explain why the enquiries are interlinked if you are able to do so without breaching the confidentiality of any of the parties. If the company, director, shareholder or pension scheme persists in the application, you should present the same arguments to the tribunal.

You should make a report to contact link following an adverse tribunal decision. The giving of a direction in respect of one return in a linked enquiry will not mean that your enquiry into the other return must also be finalised, but it will normally be appropriate to take account of the changed circumstances in deciding how best to proceed.

For more detailed guidance on the application process, refer to the Appeals, Reviews and Tribunals Guidance, ARTG7500+.