How Do You Close an HMRC Enquiry and Appeal a Decision?

Closing an HMRC enquiry means HMRC issues a formal closure notice stating either that no amendment is needed or setting out the amendment it considers necessary. Until that notice arrives, the enquiry remains open, even if HMRC has stopped writing to you.

For personal and partnership enquiries, section 28A TMA 1970 sets out this requirement. For companies, the equivalent is Paragraph 32 of Schedule 18 to the Finance Act 1998. Both provisions treat the closure notice as the point at which the enquiry legally ends and any adjustment takes effect.

Enquiries often stall because HMRC is waiting on further information, reviewing third-party evidence, or the case has simply been reprioritised within a busy office. A long silence does not necessarily mean HMRC has abandoned the point.

Sometimes the delay reflects genuine complexity: multiple tax years, connected entities or an unresolved factual dispute. In other cases, it reflects administrative backlog rather than anything specific to your file. Either way, the enquiry does not close on its own, and it is reasonable to press for progress.

HMRC can request information and documents reasonably required to check the return under enquiry, including using a formal Schedule 36 notice if correspondence has not resolved matters. It cannot indefinitely extend the enquiry simply by asking open-ended questions unrelated to the original scope.

If HMRC's requests seem to have moved beyond the original enquiry point, it is fair to ask HMRC to confirm what specifically remains outstanding before providing further material. This keeps the enquiry focused and creates a clear record for a future closure application.

Start by auditing the correspondence file: the opening letter, every HMRC question, and every reply you sent. Identify anything left unanswered, since HMRC will often point to an outstanding item as the reason for delay.

Send a clear written request asking HMRC either to confirm its findings or issue a closure notice within a stated reasonable period. If there is no substantive response, begin preparing a tribunal application for a closure direction rather than sending repeated informal chasers.

There is no statutory time limit for how long HMRC can keep an enquiry open. A straightforward aspect enquiry might resolve in a few months; a complex company or offshore enquiry can run for years if not actively managed.

It ends in one of three ways: HMRC issues a closure notice confirming no change, HMRC issues a closure notice amending the figures, or the tribunal directs HMRC to close it by a set date under section 28B TMA 1970 or Paragraph 33 Schedule 18 FA 1998. A tribunal application does not guarantee a favourable outcome, only a deadline.

A closure notice amendment can trigger additional tax, late-payment interest, and potentially a behaviour-based penalty under Schedule 24 FA 2007 for inaccuracies. Interest runs on unpaid tax regardless of behaviour; a penalty depends on whether the inaccuracy was careless or deliberate.

A careless error, where reasonable care was not taken, attracts a lower penalty range than a deliberate one. Whether the disclosure was prompted, made only after HMRC's questions, or unprompted, made before HMRC had reason to suspect an issue, also affects the reduction available within that range. Full cooperation, telling HMRC what happened, helping resolve it and giving access to records, tends to support a lower outcome.

Even a straightforward closure dispute can involve significant accountancy time: reviewing correspondence, preparing a tribunal application, and negotiating the closure notice terms. These costs arise regardless of whether HMRC's original concern was justified.

Tax investigation insurance, sometimes called fee protection, can cover eligible professional fees incurred responding to an HMRC enquiry, capping what you pay out of pocket while the matter is resolved. See our [fees](/fees) page for how this cover works alongside our own charging structure.

The most common mistake is waiting passively for HMRC to act, sometimes for years, rather than actively chasing a closure notice or considering a tribunal application. Enquiries rarely close faster through patience alone.

Other mistakes include missing the 30-day appeal window because informal discussions with the case officer continued after the closure notice was issued, and applying to the tribunal without first ensuring every outstanding HMRC question has actually been answered, which weakens the application.

Consider a landlord who holds a buy-to-let property through a single-purpose company. HMRC opened a Corporation Tax enquiry into finance cost treatment eighteen months ago, asked several rounds of questions, then went quiet for nine months.

The company's adviser reviews the file, confirms every HMRC question has been answered, and writes asking HMRC to confirm its position or issue a closure notice within a stated period. When there is no substantive reply, the adviser prepares an application under Paragraph 33 Schedule 18 FA 1998 for a tribunal direction requiring closure by a set date.

Faced with the application, HMRC issues a closure notice shortly afterwards confirming a modest adjustment. Because the 30-day appeal window is understood in advance, the company can decide calmly whether to accept the amendment or request a statutory review.