SolvedCOM71125 | Enquiries: CTSA enquiries: Partial closure notice
From HM Revenue & Customs · COTAX Manual
The Finance Act (FA) 2017 made changes to the Taxes Management Act (TMA) 1970 and Schedule 18 of the FA 1998 to allow HMRC to close, and taxpayers to seek a Tribunal direction to require HMRC to close, specific matters of an open CTSA enquiry in advance of final closure by issuing a Partial Closure Notice (PCN).
The legislation applies to enquiries under:
This measure allows HMRC to conclude checks in relation to specific matters, by issuing a partial closure notice, whilst keeping the compliance check itself open until such a time that all the matters included in the check have been concluded, either by issuing further partial closure notices, or a final closure notice (FCN) to conclude the overall enquiry.
It is current HMRC policy that this measure should only be used by compliance colleagues undertaking compliance checks in Counter Avoidance and Large Business and only in specific circumstances where the following circumstances apply:
large amounts of tax are at risk
there is evidence of tax avoidance
high levels of complexity occur
Further information and guidance about PCNs can be found in the Compliance Handbook at CH279600 and CH279610.
Further information regarding the actions you must take and implications for COTAX can be found at COM71126.
Closing an enquiry (non-contract settlements)
When closing an enquiry, if a Partial Closure Notice (PCN) has been issued during the enquiry, the caseworker should request the PCN charge in SAFE is reduced to nil and reallocate any associated payments in ETMP to COTAX. The enquiry can then be closed and a Final Closure Notice (FCN) issued with the full charge posted on COTAX. Any credit and/or debit interest is automatically calculated by COTAX.
See COM71090 for guidance on how to issue a Final Closure Notice (non-contract settlements).