Newpier Charity Limited v The Commissioners for HMRC

Decision date: 12 October 2022

Neutral citation: [2022] UKFTT 373 (TC)

Overall AI summary confidence: high

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Short overview

This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.

AI confidence in this short overview: high

Newpier Charity Ltd applied for a direction requiring HMRC to issue a closure notice for its 2016–17 corporation tax return after an HMRC enquiry into payments totalling £821,000. The Tribunal found that, on the evidence (including two witness statements) that requested historic documents are unavailable, HMRC no longer had reasonable grounds to continue the enquiry and directed HMRC to issue a closure notice within four weeks. The Tribunal recorded that HMRC may close on the basis of the evidence they hold and that the charity may appeal any closure notice issued.

Ratio decidendi

This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.

AI confidence in this ratio decidendi summary: medium

The Tribunal applied the Frosh balancing exercise and held that HMRC bears the burden of showing reasonable grounds to refuse a direction to issue a closure notice; where a taxpayer provides sworn evidence that requested historic documents are unavailable and there is no further evidence supporting continuation, HMRC must decide on the material they hold and cannot reasonably maintain the enquiry solely to pursue unavailable historic documents.

Obiter dicta

This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.

AI confidence in this obiter dicta summary: medium

The Tribunal observed that HMRC may properly close an enquiry if, in their judgment, the existing evidence does not establish entitlement to a relief, and that closure notices should not routinely be framed in non‑specific terms because they define the scope of any subsequent dispute.

Warning

The chunk contains substantial repetition of the same material; care was taken to avoid repeating duplicated passages.

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