Closure notices are not invalid

The taxpayers appealed against closure notices on the basis they were invalid and therefore HMRC was unable to collect the tax specified in them, even though it was accepted that the tax planning which was the subject of the enquiry did not work. They accepted that a return submitted in response to a computer-generated notice to file was retrospectively valid (FA 2019, s 87). But ‘the retrospective legitimisation of the tax return’ did not and could not have the effect of legitimising an enquiry into such returns. 

The First-tier Tribunal did not accept this argument. It said that such a result would be inconsistent with the policy and purpose of the act. Having accepted that the return was valid, the normal consequences followed, including enquiries and closure notices.