Invalid enquiries and closure notices
HMRC have made errors in the way they have opened enquiries. If this has happened to you then it potentially gives you individual grounds for appealing closure notices.
Bottom line is it could save you tens of thousands of pounds. It's therefore in your own interest to check.
However the devil is in the detail. Let's look at the process they should have followed, and to make it simple we'll use a specific tax year 2003/4.
You would have filed your self-assessment for 2003/4 in January 2005. HMRC then have 12 months in which to open an enquiry ie. up until January 2006. If they missed the cut-off date then they would have had to open the enquiry under discovery.
But they've made mistakes. Enquiries have been sent to the wrong address. Enquiries have been opened late without citing discovery. Closure Notices have been issued where no prior enquiry had ever been opened.
Now let's come to the wording of the actual enquiry letter. At the very least the letter should say they are opening enquiries. It may also reference Section 9a TMA 1970 or Code of Practice 8 (COP8).
In the case of 2006/7 and 2007/8, some people received a letter inviting them to amend their return. This does not constitute opening an enquiry because you can't amend your return once it is under enquiry.
What does it all mean?
Well, if an enquiry wasn't opened properly then the subsequent closure notice may not be valid either. There could be grounds for getting the closure notice withdrawn or appealing on this basis to a tax tribunal.
Checklist
You need to check this for every single closure notice.
If you think they have not followed due process in your case please contact NTRT.
HMRC have made errors in the way they have opened enquiries. If this has happened to you then it potentially gives you individual grounds for appealing closure notices.
Bottom line is it could save you tens of thousands of pounds. It's therefore in your own interest to check.
However the devil is in the detail. Let's look at the process they should have followed, and to make it simple we'll use a specific tax year 2003/4.
You would have filed your self-assessment for 2003/4 in January 2005. HMRC then have 12 months in which to open an enquiry ie. up until January 2006. If they missed the cut-off date then they would have had to open the enquiry under discovery.
But they've made mistakes. Enquiries have been sent to the wrong address. Enquiries have been opened late without citing discovery. Closure Notices have been issued where no prior enquiry had ever been opened.
Now let's come to the wording of the actual enquiry letter. At the very least the letter should say they are opening enquiries. It may also reference Section 9a TMA 1970 or Code of Practice 8 (COP8).
In the case of 2006/7 and 2007/8, some people received a letter inviting them to amend their return. This does not constitute opening an enquiry because you can't amend your return once it is under enquiry.
What does it all mean?
Well, if an enquiry wasn't opened properly then the subsequent closure notice may not be valid either. There could be grounds for getting the closure notice withdrawn or appealing on this basis to a tax tribunal.
Checklist
You need to check this for every single closure notice.
- You should have received a letter, prior to the CN, opening an enquiry.
- The enquiry should have either been opened inside the 12-month window OR if it was late, it should have included the word "discovery".
- The letter should have made it clear they were opening an enquiry.
- The letter should not have invited you to amend your self-assessment tax return.
- The letter should have advised you of your rights under COP8, and included the COP8 booklet - http://www.hmrc.gov.uk/pdfs/cop8.pdf
If you think they have not followed due process in your case please contact NTRT.
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