No goodwill

Closure notice and scope of appeal

 

The taxpayer appealed against an amendment in its corporation tax return relating to the amortisation of goodwill attributable to a company acquisition. 

 

The decision concerned the taxpayer’s argument that HMRC’s closure notice and the scope of the appeal covered the method of amortisation only; the substantive appeal has still to be determined. HMRC said the closure notice encompassed the value of the goodwill, which it considered had been overstated in the accounts.

 

The First-tier Tribunal said HMRC made clear in the closure notice that details of the amortisation charge in the accounts had not been prepared in accordance with UK GAAP (generally accepted accounting principles). Further, a ‘reasonable recipient’ would have assumed from that letter that it concerned the calculation of amortisation, not the value of the goodwill.

 

The taxpayer’s application that the scope of the appeal was limited to the amortisation issue was allowed.