In HMRC v Epaminodas Embiricos [2020] UKUT 0370, the Upper Tribunal (UT) confirmed that HMRC cannot issue a partial closure notice which does not quantify the amount of tax due.

  • HMRC enquired into Mr Embiricos self-assessment claims for 2014/2015 and 2015/2016 that he was non-UK Domiciled and entitled to the Remittance Basis of taxation.
  • Concluding that he was domiciled in the UK, HMRC issued an Information Notice in order to obtain the exact details of his worldwide income.
  • Mr Embiricos sought to avoid disclosure of his income by countering the notice and making an application to the First Tier Tribunal (FTT) that HMRC should issue a Partial Closure Notice (PCN). This would then allow an appeal by the taxpayer against the non-UK domicile decision.
  • HMRC considered that they could not issue a PCN until they had quantified the amount of tax which would be due if the remittance basis was denied. 
  • Following the application, the FTT held that the legislation concerning PCNs did not require that HMRC had to quantify the amount of tax due.

HMRC appealed to the Upper Tribunal on the basis that the FTT had made an error of law.

The UT considered that:

  • The practical effect of the FTT’s decision is that HMRC would be forced to issue a PCN, but unable to obtain the information they assert to be necessary to quantify the tax at stake. Multiple PCNs could then be demanded and appealed and this would hold up the enquiry process. This was not what parliament intended.
  • The FTT had taken the exact opposite view to the FTT decision in a later partial closure notice case,(see Executors of Mrs R W Levy v HMRC [2019] TC07233). That case contained a detailed review of the PCN legislative background.
  • Also, the Court of Appeal in the earlier case of R (oao William Archer) v HMRC [2017] EWHC 296 had confirmed that closure notices which fail to state amounts and do not contain amendments to returns are defective.

The UT confirmed that a PCN must quantify tax due and allowed HMRC's appeal.

Useful guides on the topic

Closure notices 
When does HMRC issue a closure notice? What is a partial closure notice? Can a taxpayer demand one? Are there appeal rights? 

Non-domicile status, deemed domicile & tax
Who is non-UK domiciled? What does this mean for UK Income Tax, Capital Gains Tax and Inheritance Tax? What reliefs are available to non-doms?

Schedule 36 information notices
What is a Schedule 36 Information Notice? When can HMRC issue one? What rights does the taxpayer have when an information notice is issued?

External link

HMRC v Epaminodas Embiricos [2020] UKUT 0370


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For what it's worth, I consider this decision by the Upper Tribunal to be deeply flawed and an article in Taxation in the next couple of weeks explains my reasoning (at length).

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