Why the delay?

Grounds for not issuing a closure notice

The taxpayer claimed loss relief arising out the activities of a limited liability partnership. HMRC refused the claim saying the losses were the result of the taxpayer’s participation in a tax avoidance scheme. It opened an enquiry into the relevant return.

After three years during which scant progress had been made the taxpayer asked HMRC to close the enquiry. In response HMRC asked for information. The taxpayer applied to the First-tier Tribunal for a closure notice and did not provide the documents requested.

The First-tier Tribunal accepted that the information requested by HMRC was relevant to the enquiry and was not excessive. Further this would be reasonable grounds on which to refuse the taxpayer’s request for a closure notice. However the taxpayer’s view was that even if HMRC was entitled to ask for the documents at...