In its response to the consultation “Tax Enquiries: Closure Rules” the Northern Ireland Tax committee questions the need for the proposed power which would enable HMRC to unilaterally close one or more aspects of an enquiry by application to Tribunal.

In the context of HMRC being able to issue Accelerated Payment Notices, the Committee asks if the power is necessary? The Committee also express a number of concerns in relation to the proposals which also include changes to rules governing payment which would allow earlier payment to be achieved in respect of the aspects of the enquiry successfully concluded by HMRC under the proposed power.

The Committee agrees that HMRC should have the powers it needs to tackle tax avoidance effectively. However, there is no proposal for an equivalent power for taxpayers who want to resolve individual matters early where HMRC does not agree these should be taken to a tribunal. Taxpayers should have equal symmetrical rights to seek closure of a single issue.

HMRC would also have the discretion to select those matters most in its favour to yield tax earlier whilst perhaps leaving those which might reduce the liability open until the issue of the final closure notice.

Piecemeal resolution of enquiries could result in even further uncertainty for taxpayers and could add to their compliance burden and costs, by having to deal with a separate tribunal case at the same time as an ongoing enquiry. The Committee also questions if the Tribunal system would be adequately resourced to cope with the additional influx of potential cases that may arise and suggests that a “materiality” concept should be considered to ensure small trivial matters under enquiry are not caught by these proposals.

The response is published on here.