SDLTM82480 - Compliance: Concluding an enquiry

Closure notices: The closure notice: Timing of the closure notice: Co-operation of purchaser

It has always been common practice in enquiry cases to discuss with the purchaser and agent the emerging conclusions as to the amount of additional tax which might be due. Such discussions are often exploratory in nature. They give both HM Revenue & Customs and the purchaser the opportunity to explore any differences and clear up any misunderstandings. They also help to keep the payment position under review and to arrive ultimately at an agreed settlement.

Where the purchaser and agent are co-operating in an attempt to arrive at an agreed position a compliance caseworker should be prepared to discuss with them, whether at a meeting, on the telephone or by correspondence, any emerging conclusions on the figure which ought to be included in the closure notice. In other words, what the liability should be.

Such discussions would not usually be entered into before the compliance caseworker has a reasonably full picture of the case.

The timing of the issue of the closure notice will therefore be a matter for careful judgement based on all the circumstances of the case.

In general terms, the enquiry should be brought to a conclusion when there is no more information needed to determine whether the land transaction return is correct and complete or to quantify any errors or omissions. A balance needs to be struck between obtaining sufficient information to arrive at an informed and sustainable conclusion and seeking every last item of information which might relate to the land transaction return.

A compliance caseworker will not be able to ask any more questions about the land transaction return once the closure notice has been issued. They should therefore ensure, before issuing it, that they have sufficient evidence at their disposal to be able to draw soundly based conclusions which, if necessary, they will be able to defend before a Tax tribunal.

The compliance caseworker should not feel that this obliges them to ask for everything conceivable in case they miss something. Every effort should be made to obtain all the information that is considered both relevant and material but time should not be wasted pursuing trivial matters.