Notice of enquiry is out of time

The taxpayer claimed post-cessation trade relief for a settlement payment to his former partners in his 2009-10 tax return. The payment was made as a result of his breach of fiduciary duties. HMRC refused the claim.

The taxpayer appealed saying that the closure notice was invalid because HMRC’s notice of enquiry into his return was raised out of time.

The First-tier Tribunal noted that in this case the taxpayer had amended his return so HMRC had up to the quarter day next following the first anniversary of the day on which the amendment was made to raise an enquiry. Here the taxpayer’s agent amended the return by a letter dated 28 April 2011 - to include the post-cessation trade relief claim. HMRC said the letter was received on 4 May 2011 as shown by the date stamp applied in accordance with HMRC practice on the date of receipt....