HMRC were instructed by the First-tier Tribunal (FTT) to issue a closure notice in a case where evidence had been given that the evidence sought was not available. The case concerned a claim for charity tax relief that was being disputed by HMRC.
The taxpayer charity contended that “it is unreasonable to expect the information and documentation relating to transactions more than 20 years earlier to be available and that as there is no power to assess for such periods the documents and information cannot be reasonably required before the Enquiry is closed”.
The FTT concluded that it was satisfied that there were no reasonable grounds to maintain the Enquiry:
“HMRC must decide on the information and documentation they hold. HMRC are capable of making an informed judgment as to the quality of the information provided to them and whether it justifies the claim to charity tax relief on the payments made in the accounting period to 30 June 2017. If they consider, in the absence of the further information and documentation that their concerns justify a conclusion that the payments totalling £821,000 were not eligible for charity tax relief they may close on that basis. In substance it is no different to any other closure notice where HMRC are not satisfied on the evidence as to entitlement for a relief or deduction.
The Appellant will be entitled to appeal the closure notice. It will then be for the Tribunal hearing the case to determine, on the balance of evidence (already produced – as it is stated that there is no more evidence), whether entitlement to charities relief is made out in relation to those payments.”
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In Tax Appeals – Law and Practice at the FTT, tax barrister Keith Gordon analyses some 500 precedents to show how the FTT rules are applied in practice, and how taxpayers may use the tribunal system for appealing against tax decisions.