TC09615 - [2025] UKFTT 01016 (TC)

Fecha: 31-Jul-2025

Tower MCashback

Tower MCashback

42.

In Tower MCashback LLP v HMRC [2011] UKSC 19; [2011] STC 1143, the Supreme Court considered a closure notice issued by an HMRC Officer, Mr Frost, which was worded as follows, see [13] of the judgment (emphasis in the judgment):

“I have now concluded my enquiries into the Partnership Tax Return for the year ended 5 April 2005. As previously indicated, my conclusion is: The claim for relief under section 45 CAA 2001 is excessive. The partnership returns for the year ended 5 April 2005 is amended as follows.
Capital Allowances £Nil
Allowable Loss £Nil.”

43.

Officer Frost’s previous correspondence had referred to the Capital Allowances Act 2001 (“CAA”) s 45(4), and the letter attached to the closure notice also referred only to s 45(4). However, HMRC abandoned reliance on s 45(4) during the hearing before the Special Commissioners, but continued to rely on s 45 more generally.

44.

At [15] of the judgment, Lord Walker quoted with approval the words of Henderson J (as he then was) when the case was decided by the High Court:

“There is a venerable principle of tax law to the general effect that there is a public interest in taxpayers paying the correct amount of tax, and it is one of the duties of the commissioners [the predecessors of the FTT] in exercise of their statutory functions to have regard to that public interest…For present purposes, however, it is enough to say that the principle still has at least some residual vitality in the context of section 50, and if the commissioners [the FTT] are to fulfil their statutory duty under that section they must in my judgment be free in principle to entertain legal arguments which played no part in reaching the conclusions set out in the closure notice. Subject always to the requirements of fairness and proper case management, such fresh arguments may be advanced by either side, or may be introduced by the commissioners on their own initiative.”

45.

At [17] he endorsed the following words from Moses LJ’s judgment in the Court of Appeal, which said in relation to the closure notice:

“…Whilst it did refer to previous correspondence which clearly focussed on s 45(4), the closure notice itself was, in plain terms, a refusal of the claim for relief under s 45 CAA 2001. That was the conclusion stated pursuant to s 28B(1). There is neither statutory warrant nor any need to look further.”

46.

Lord Hope said this:

[83]…The closure notice that Mr Frost issued was in very bald terms. All he said was that the claim for relief under s 45 CAA was excessive, and that the amount in the return for capital allowances was amended to £nil. No details were given of the reasons why he had reached the conclusion to which his amendment gave effect. The statute does not spell out exactly what it means by the words ‘his conclusions’. But taxpayers are entitled to expect a closure notice to be more informative.

[84] Notices of this kind, however, are seldom, if ever, sent without some
previous indication during the enquiry of the points that have attracted the officer’s attention. They must be read in their context. In this case Mr Frost
drew attention to this when he prefaced his conclusion with the words ‘as
previously indicated.’ He also sent a covering letter which cast further light on the approach which he had taken to the various issues that had been under
examination. In these circumstances it does not seem unfair to the LLPs to
hold that the issue as to their entitlement to the allowances claimed should be
examined as widely as may be necessary in order to determine whether they
are indeed entitled to what they have claimed. Furthermore, while the scope
and subject matter of the appeal will be defined by the conclusions and the
amendments made to the return, s 50 of TMA does not tie the hands of the
commissioners (now the Tax Chamber) to the precise wording of the closure
notice when hearing the appeal.”