Autumn Statement 2014: New flexible closure notices

Under the current enquiry legislation, HMRC have to issue a closure notice when an enquiry into a tax return has been completed. A taxpayer can also apply to the tribunal for a closure notice to be issued if he or she believes an enquiry has ended.

The government will consult on a proposal to introduce a new power, enabling HMRC to achieve early resolution and closure of one or more aspects of a tax enquiry whilst leaving other aspects open.

This could result in a closure notice issued in respect of some aspects of a tax return, accelerating the payment of tax, while, for example, other aspects are litigated.

There is a risk with this measure that HMRC could resolve matters on a piecemeal basis. This would be unwelcomed by taxpayers, as it could prolong an already stressful and disruptive procedure.