Complex enquiries

Applications for closure notices

BlueCrest carries out a fund management business in the UK with businesses incorporated in the Cayman Islands. HMRC opened tax enquiries into different aspects of the business. In relation to the Cayman businesses issues concerned transfer pricing thin capitalisation and restriction of tax relief for interest on unallowable purpose loans. HMRC was also investigating a partnership incentive plan (PIP).

HMRC asked to see 106 000 documents but 2 700 were withheld on legal professional privilege grounds. The department was concerned about these; it considered that some were not privileged and could be relevant to the PIP enquiries.

The taxpayers requested closure notices claiming there was no reason to delay their issue. HMRC’s enquiry process had extended over seven years it had given precise estimates of the tax at stake had raised discovery assessments and had issued accelerated payment notices.

HMRC...