Easinghall Ltd v Revenue & Customs

Corporation Tax � para 33 Sch 18 FA 98 � application for closure notice- discovery assessment made before enquiry opened � settled by agreement � effect of settlement on scope and possible conclusions of enquiry � Olin v Scorer considered- �reasonableness of continuing enquiry

Eastinghall Limited applies for a closure notice in respect of the enquiry into its 2011/12 tax return

At the same time Mr Laurie also concluded that it was likely that the company had understated its profits and its tax liability for 2011/12 in the same way. He did not have any direct evidence that this was the case but presumed that the company�s practice had been continuous.

This time was within the 12 months following the delivery of the company�s 2011/12 tax return. Mr Laurie could therefore have opened an enquiry into that return. But he did not choose that course of action: instead, and on the same date as he gave the 2010/11 closure notice, namely 18 October 2013, �he made a "discovery assessment" under paragraph 43 schedule 18 FA 1998. In that assessment he assessed the company to further corporation tax of �8,544.20 for 2011/12.

I consider that there is insufficient evidence to support the amount assessed in this year.