Closing an HMRC enquiry

This article was first published in Taxation on 2 June 2025 in response to a Readers’ Forum query. You can read the original question and response here.

HMRC opened an enquiry into a specific area of a client’s tax return a year ago. The department wanted more information on three transactions and given their complexity, the adviser felt HMRC’s queries were justified and they provided detailed explanations and further evidence.

Over the following months, after more questions and evidence, HMRC accepted that two of the transactions were fine. The department continued to query the third, even though the adviser and the client believed they had provided sufficient information to demonstrate beyond reasonable doubt that the tax declaration in respect of this transaction was correct.

HMRC keeps requesting further information without reason and the adviser believes (given the above) that the additional requests are unnecessary. Should the adviser continue to provide the information? How can the adviser push HMRC to conclude matters?

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A taxpayer can apply for a closure notice at any time during an enquiry. We would however only advise doing so when HMRC has sufficient information to identify the quantum of additional tax due, if any.

You can also request partial closure notices in respect of the areas resolved.

Normally, we would advise you to request a closure notice from HMRC informally and if a positive response is not forthcoming you can apply to the FTT for HMRC to issue a closure notice. The Tribunal is required to direct HMRC to issue a closure notice unless HMRC shows it is reasonable not to; the burden of proof is on HMRC.

HMRC’s arguments against issuing a closure notice are typically that the department needs more time or more information to determine the liability. If HMRC already has this information however, it should be fairly easy to demonstrate at Tribunal.

The Tribunal will take into account factors such as the time taken so far – bearing in mind that one year is not that long in enquiry terms – versus the complexity of the case, the proportionality of further information being requested against the taxpayer’s right to certainty and protection against inappropriate protraction of an investigation.

We would suggest first of all speaking to the inspector to try and identify whether there are any other concerns. If there are not, then you can write to HMRC requesting a closure notice, detailing the information provided to date and why it is sufficient for the enquiry to be concluded. You can also add that should HMRC refuse to issue a closure notice, the client will apply to Tribunal.

Bear in mind that whether under threat of Tribunal or by direction of Tribunal, HMRC may issue a closure notice however the liability may then need to be appealed.

This article considers in more details the various options available for closing an HMRC enquiry.

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