UT (Tax & Chancery) UT-2024-000113 - [2025] UKUT 00165 (TCC)

Mr Grierson submitted that HMRC’s purported Closure Notices were not in the correct form and were not valid according to the test in Raftopoulou. The FTT found as a fact at [20] that the Appellant did not understand the two Closure Notices dated 25 July 2019. This finding was based on what the Appellant said in cross examination on his witness statement and an email he sent to his solicitors on 29 July 2019: “… I cannot understand what the reason for the letter is, especially as it has not affected my SA account. I need advice as to what it means and the implications if any.”

Mr Grierson contended that there was a non sequitur and inconsistency as between the FTT’s finding of fact at [20] of the Decision and its subsequent findings at [98] and [99]. The findings were so irrational that no Tribunal or Court: “acting judicially and properly instructed as to the relevant law” (per Edwards (H. M. Inspector of Taxes) v. Bairstow and Harrison [1956] AC 14 at [78] ) could have reached the conclusion at [100] that: “the closure notice given under s.28A TMA in relation to the enquiry into Mr Murphy's return for the tax year 2006/7 was effective to disallow Mr Murphy's claim for share loss relief”.

He submitted that if the FTT had been “acting judicially and properly instructed as to the relevant law” it would have concluded that the two purported Closure Notices of 25 July 2019, including the one in relation to the return for the later year 06-07, failed the test laid down at [36] in Raftopoulou. He argued that there is no suggestion by the FTT that this lack of understanding by the Appellant was the perception of anyone other than a “reasonable recipient in the position of the taxpayer”, namely the Appellant, to use the test at [36] in Raftopoulou.

Mr Grierson also argued that the invalidity of HMRC’s enquiry letters cannot be cured by s.114 TMA. Firstly, an enquiry does not fall within any of the matters expressly referred to in s.114(1). Secondly, nor does an enquiry impliedly fall within s.114(1) by virtue of the ejusdem generis rule of statutory construction. All the matters referred to in s.114(1) TMA apply to the final stage of an assessment or collection procedure rather than the opening of an enquiry.

Therefore, the FTT erred in reaching the conclusion it did.