The First-tier Tribunal was satisfied that there were reasonable grounds for HMRC not to issue a closure notice in respect of enquiries into a solicitor’s tax returns, so his application was refused.
The applicant was a solicitor in private practice, with one associate solicitor and no support staff. HM Revenue and Customs (HMRC) opened an enquiry into the applicant’s self-assessment returns for the tax years 2016/17 and 2017/18.
The applicant had previously applied to the First-tier Tribunal (FTT) for a direction that HMRC issue a closure notice in relation to his tax return for 2016/17. The enquiry into the 2016/17 return had focused on several issues: the high proportion of debtors in relation to turnover; valuation of work in progress; non-production of statutory records; timing of income recognition; that depreciation had not been added back in computing profits; and the size of accountancy fees.