Validity of enquiry notices issued to limited liability partnerships

HMRC opened enquiries into two limited liability partnerships under TMA 1970 s 12A and later issued closure notices under TMA 1970 s 28B. The enquiry concerned whether the LLPs were carrying on business with a view to a profit however the instant appeal concerned whether HMRC had opened and closed the enquiry using the correct provisions.

Citing the Court of Session decision in R (oao Spring Salmon and Seafood Ltd) v CIR [2004] Scot CS 39 the LLPs said HMRC had no powers to open an enquiry under s 12AC and therefore there was no valid closure notice under s 28B. If it wanted to enquire into the LLPs’ returns it should have done so under FA 1998 Sch 18 para 24 (corporation tax self assessment) because an LLP is a corporate body. If it decided to enquire into the members’ returns ...