EM2161 - Working the enquiry: partial closure notices: appeals - what must be considered before a partial closure notice can be issued

The tax due as a result of amending a return by issuing a partial closure notice (PCN) is calculated using the information known at the time the PCN is issued. If the tax due is subsequently found to be incorrect any discrepancy will be resolved when the final closure notice (FCN) is issued.

If you are seeking to issue a FCN where a previous PCN is under appeal, there is no statutory mechanism to allow the FCN to be adjusted if the appeal against the PCN is settled in a different figure than had been taken into account in calculating the tax due at the FCN stage. Where possible you should not issue a FCN until all PCNs issued are already final.

So before you issue a PCN, you must to consider:

• the likelihood of an appeal against that PCN (the criteria for issuing a PCN is very limited if the taxpayer does not agree with it)
• when you are likely be in a position to complete your check of the other issues. If you will shortly be in a position to issue a FCN, you should not issue a PCN. Instead all remaining matters should be settled by issuing a FCN in due course.

This does not stop a taxpayer from asking for the tribunal to direct HMRC to issue an FCN. If you receive such an application or the taxpayer persists in requesting a FCN, contact the specialist technical team, see EM21000.