The taxpayer was successful in its application to determine the scope of an appeal against an amendment in a closure notice.
The taxpayer in this case successfully appealed against an amendment to its CT return relating to the amortisation of goodwill attributable to a company acquisition. While the substantive appeal remains to be determined, the taxpayer argued that HMRC’s closure notice, and the scope of the appeal, was limited to the method of amortisation. HMRC countered that the closure notice also encompassed the value of the goodwill, which they believed was overstated in the accounts.
The First-tier Tribunal (FTT) held that the closure notice made it clear that HMRC had concluded that the accounts had not been prepared in accordance with UK GAAP in respect of the amortisation charge. However, a ‘reasonable recipient’ would not have concluded from reading HMRC’s letter that the value of the goodwill was under enquiry. The taxpayer’s application was therefore agreed.
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