HMRC Closure Notice: Can You Force HMRC to End a Tax Enquiry?

Yes. If HMRC keeps a tax enquiry open and the delay is unreasonable, you can apply to the First-tier Tribunal for a direction that HMRC issues a closure notice by a set date, and the tribunal must give that direction unless HMRC shows reasonable grounds for carrying on (section 28A(4) and (6) of the Taxes Management Act 1970). A closure notice is the letter that ends the enquiry, and you do not need HMRC’s permission to ask for one.

People usually reach this question after a year or more of letters, information requests and silence. They assume HMRC decides when its own enquiry ends. It does not have the final say, but the route to the tribunal needs thought before you use it, because a closure notice can end with a higher tax bill.

What Is an HMRC Closure Notice?

HMRC can open an enquiry into your tax return by sending you a written notice under section 9A of the Taxes Management Act 1970. HMRC now often calls this a compliance check, and our guide to HMRC compliance checks and your rights explains how one starts. The enquiry ends when an HMRC officer sends a closure notice, and until then your return stays open to challenge. You may also be unable to settle accounts, plan a sale or sign off a set of accounts with confidence while the question hangs over you. Under section 28A(2) that notice must state the officer’s conclusions and either say that no change to the return is needed or make the changes required.

A closure notice takes effect on the day it is issued (section 28A(3)). HMRC can also close part of an enquiry early by sending a partial closure notice, which deals with one matter while the rest carries on. HMRC’s Enquiry Manual on closure applications covers both partial and final notices.

How Long Can HMRC Keep a Tax Enquiry Open?

The law sets a deadline for opening an enquiry but none for finishing it. HMRC’s guidance says an enquiry must normally be opened within 12 months of an on-time return being delivered, with a later cut-off for late or amended returns, and that HMRC needs no reason beyond giving written notice. You can read the rule in HMRC’s Self Assessment Legal Framework manual. Once an enquiry is open, only a closure notice ends it.

Our own guidance says full enquiries typically run for around 18 months, and aspect enquiries, which look at one item, usually three to six months, with complex or valuation disputes lasting longer. You can see that in our guide to managing HMRC tax enquiry investigations. If yours has gone well past those figures, the tribunal route is worth considering.

Can You Force HMRC to Close a Tax Enquiry?

Yes. Section 28A(4) allows the person who received the notice of enquiry to apply to the tribunal for a direction requiring HMRC to issue a partial or final closure notice within a period the tribunal specifies. Under section 28A(6) the tribunal gives the direction unless it is satisfied that there are “reasonable grounds for not issuing” the notice within that period. In effect HMRC has to justify keeping the enquiry open. The application goes to the tax chamber, which we describe on our page about the First-tier Tax Tribunal.

Companies have the same right under paragraph 33 of Schedule 18 to the Finance Act 1998, where the test refers to “reasonable grounds for not giving a partial or final closure notice”. Partnerships are dealt with in section 28B, and the right to apply belongs to the person who was given the notice of enquiry, so a partner should check who that was.

What Counts as Reasonable Grounds for HMRC to Carry On?

The legislation does not list them. HMRC’s own manual says the law gives no guidance on when an application may be made, and it sets out how its officers should react where HMRC has just written or called, where nothing has happened for a long time, and where HMRC has already looked at the information you sent. The same manual chapter, how HMRC approaches closure applications, adds that officers should be ready for an application in any enquiry, however small the point.

In practice the tribunal looks at whether HMRC still has live and reasonable questions, whether it already has the documents it asked for and whether the delay has an explanation. It helps your case if you have answered every request. Before you apply, write to the HMRC officer, answer anything still outstanding, list the dates of your replies and ask for a closure notice by a date you name. That letter becomes evidence of how long the enquiry has run and how cooperative you have been. If HMRC replies with a fresh and reasonable request, answer it, because an unanswered request is the easiest ground for HMRC to rely on. Our case note on a tribunal directing HMRC to issue a closure notice shows the process in action, and our commentary on HMRC v Jonathan Hitchins & Ors [2024] UKUT 00114 reports the Upper Tribunal upholding an order that HMRC close 13 open enquiries.

How to Apply to the Tax Tribunal: Form T245 and What Happens Next

The government’s page on the tax tribunal says you can ask the tribunal to order HMRC to close an enquiry into your tax return, online or by post, using form T245 (Application to close enquiry). It also says you cannot make this application where your return is being checked for indirect tax, such as VAT. HMRC’s manual says you may apply at any time during the enquiry, and our guide to First-tier Tax Tribunal appeals explains how the tribunal handles cases more generally.

If the tribunal grants the application it specifies the date for the closure notice. HMRC’s manual says that where HMRC has information suggesting your return is wrong, it can ask the tribunal for at least 30 days, or a reasonable time, to consider it. HMRC can also seek permission to appeal to the Upper Tribunal on a point of law, and you can appeal on a point of law if the tribunal refuses. These steps are set out in HMRC’s manual on the consequences of a tribunal decision.

Is Asking for a Closure Notice Always a Good Idea?

Not always. A closure notice ends the enquiry, but it does not tell you which way it ends. HMRC may confirm that no change is needed, or it may amend your return and increase your tax, and HMRC’s manual says it should then start penalty proceedings promptly if the evidence supports one. Our page on HMRC penalties explains the penalties that can follow.

HMRC’s manual also says that after a direction HMRC closes on the evidence it already holds, without asking you for more, and cannot make further enquiries into that matter or return. So apply once you have given HMRC what it reasonably needs and the delay is its own. If you are unsure whether the time is right, our second opinion on an HMRC dispute is built for that decision.

Try HMRC Alternative Dispute Resolution Before You Apply?

Sometimes. The government’s guidance on alternative dispute resolution for tax disputes says that if HMRC has opened an enquiry you can apply for it at any stage, and HMRC’s manual says officers should consider it where talks reach a stalemate, with the tribunal still open if it fails. Our page on alternative dispute resolution with HMRC warns that applying for it does not extend a statutory appeal deadline.

Closure Notice, Discovery Assessment or Compliance Check? Clearing Up the Confusion

These terms get mixed up. A closure application only works while an enquiry into a return is open. A discovery assessment is a separate power HMRC uses to correct an under-assessment outside an enquiry, which we cover in our guide to HMRC discovery assessments, and the closure route above does not apply to it.

HMRC’s own guidance describes a compliance check as sometimes known as a tax enquiry, so a letter using either phrase may mean the same thing, as the government’s page on HMRC compliance checks explains. Checks into other taxes follow other rules, and a solicitor can tell you which applies to your letter.

Deadlines That Matter During and After an Enquiry

There is no deadline for applying for a closure notice while the enquiry is open, but the clock that matters starts when HMRC issues one. Section 31(1)(b) gives you a right to appeal against any conclusion stated or amendment made by a closure notice, and section 31A(1)(b) requires notice of appeal within 30 days after the specified date, which for these appeals is the date the closure notice was issued (section 31A(3)).

Diarise the date the day the notice arrives. Our pages on HMRC tax appeals and HMRC internal review appeals explain the next steps, and a late appeal can fail.

What If the Tax Bill Goes Unpaid After an Enquiry?

An amended return creates a debt that HMRC can enforce. For a company, unpaid tax can lead to a winding up petition, and our guide on whether HMRC can wind up your company and our page on dealing with an HMRC winding up petition explain how to respond before a petition is issued.

Has Your Adviser Made the Enquiry Worse?

An enquiry can drag on or turn costly because an accountant missed a deadline, gave careless advice or answered HMRC badly. If that happened, you may have a separate claim against the adviser. See our pages on claims against negligent accountants and tax advisers, financial negligence claims, negligent tax scheme advice and negligent tax advice claims.

How We Can Help

We act for individuals and businesses with substantial HMRC enquiries and disputes through our HMRC tax litigation practice. We read the correspondence, tell you whether a closure application is likely to succeed and whether it is wise, and represent you before the tribunal. We do not offer free legal advice or legal aid, and we generally take on substantial matters only.

We are dual qualified solicitors and barristers with chambers at 4 Middle Temple Lane, next to the Royal Courts of Justice. We offer a fixed fee advice conference with both a solicitor and a barrister, where we review your enquiry file and advise on the next step. To begin, complete our HMRC tax dispute case assessment form.

This article is general information, not legal advice.