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HMRC internal manual

Enquiry Manual

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HM Revenue & Customs
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Concluding an Enquiry: SA Legislation: Timing of Closure Notice - General

It has always been common practice in enquiry cases to discuss with the taxpayer and agent the emerging conclusions as to the amount of profits which have been understated and the amount of additional tax etc. which might be due. Such discussions are often exploratory in nature. They give both HMRC and the taxpayer the opportunity to explore any differences and clear up any misunderstandings. They also help to keep the payment position under review and to arrive ultimately at an agreed settlement.

Where the taxpayer and agent are co-operating with you in an attempt to arrive at an agreed position you should be prepared to discuss with them, whether at a meeting, on the telephone or by correspondence, any emerging conclusions on the figure which ought to be included in the closure notice. In other words, what the self assessment should be. You would not enter into such discussions before you have a reasonably full picture of the case.

The timing of the issue of the closure notice will therefore be a matter for careful judgement based on all the circumstances of the case.

In general terms, you must bring the enquiry to a conclusion when there is no more information you need to determine whether the return is correct and complete or to quantify any errors or omissions. You will need to strike a balance between obtaining sufficient information to arrive at an informed and sustainable conclusion and seeking every last item of information which might relate to the return.

You will not be able to ask any more questions about the return once you have issued the closure notice. You should therefore ensure, before you issue it, that you have sufficient evidence at your disposal to be able to draw soundly based conclusions which, if necessary you will be able to defend before the tribunal.

You should not feel that this obliges you to ask for everything conceivable in case you miss something. You must make every effort to obtain all the information that you consider both relevant and material but you must not waste time pursuing trivial matters.