Receiving a letter from HM Revenue and Customs can be worrying, particularly when it relates to HMRC tax enquiries, announcing that your tax affairs are under scrutiny. These enquiries are formal checks carried out by HMRC to make sure individuals and businesses have reported their income correctly and paid the right amount of tax. They can affect anyone, from sole traders and landlords to company directors, and they do not always mean that something serious is wrong.
Before contacting an adviser, you can use HMRC’s digital assistant for quick queries about tax enquiries and other services. The digital assistant provides interactive support to help you find information, get answers to specific questions, and navigate HMRC’s online services.
Understanding how HMRC tax enquiries work is the key to staying in control and responding with confidence. This blog explains the process in clear, practical terms. We will cover why enquiries are opened, the different types you might face, your legal rights, what HMRC can ask for, possible outcomes, and how to respond effectively. It is important to provide accurate information HMRC requests, as this helps ensure compliance and a smoother enquiry process. By the end, you will know what to expect and how to protect your position if HMRC contact you.
What are the HMRC Tax Enquiries?
HMRC tax enquiries are formal checks carried out by HM Revenue and Customs to verify that a person’s or business’s tax position is correct. These enquiries can focus on income tax, self assessment, VAT, corporation tax, or PAYE. The purpose is straightforward: HMRC wants to confirm that the figures on your tax return match reality and that you’ve paid the right amount. HMRC use enquiries to ask taxpayers questions and request documentation to verify correct tax payments.
An HMRC tax enquiries can follow the submission of self assessment tax return, or arise as standalone review of your records. HMRC might look at a single tax year or go back across several earlier years if they have concerns. For most people filing online, HMRC must open an enquiry within 12 months of the filing deadline—31 January following the end of the relevant tax year. Most HMRC enquiries are triggered by inconsistencies identified by HMRC’s Connect system.
When HMRC tax enquiries are started, they send a written notice. For self assessment, this is typically headed “Notice of enquiry under Section 9A TMA 1970.” The letter usually includes an initial list of questions or documents they want to see. For example, a sole trader who filed their 2023/24 return on 31 January 2025 might receive an enquiry notice asking about business expenses or property income.
Main types of Tax Enquiries HMRC can Open:
- Income tax (including employment income, rental income, and savings interest)
- Self assessment tax returns
- Corporation tax for limited companies
- VAT returns and records
- PAYE and national insurance contributions
- Capital gains tax
- Tax credits and marriage allowance claims
When and How HMRC can Open an Enquiry
HMRC tax enquiries are governed by strict legal time limits and formal procedures. Officers cannot simply open an enquiry whenever they choose; they must follow the law.
The 12-month enquiry window
For self assessment, HMRC generally has 12 months from the date you filed your tax return to open an enquiry. If you filed your 2023/24 online return on 31 January 2025, the enquiry window closes on 31 January 2026.
Here’s how the timeline works in practice:
| Tax Year | Filing Deadline | Filed On Time? | Enquiry Window Closes |
| 2022/23 | 31 January 2024 | Yes | 31 January 2025 |
| 2023/24 | 31 January 2025 | Yes | 31 January 2026 |
| 2023/24 | 15 March 2025 (late) | No | 15 months from submission |
If you file late, the enquiry window can extend. Late returns give HMRC up to 15 months from the submission date rather than from the standard deadline.
Discovery assessments
Even after the normal enquiry window closes, HMRC can use “discovery assessments” to go back further if they believe tax has been underpaid due to careless or deliberate behaviour:
- 4 years from the end of the tax year for ordinary cases
- 6 years for careless behaviour
- 20 years for deliberate or fraudulent conduct
How HMRC notify you
HMRC must send a written notice of enquiry to your last known address. For PAYE or VAT compliance checks, they may arrange a visit to your business premises or contact you by telephone first. However, the formal enquiry itself requires written confirmation.
HMRC do not have to explain why they opened an enquiry. Common triggers include large expense claims, unusual losses, lifestyle that doesn’t match reported income, or discrepancies in data matching. You might never know the exact reason of HMRC tax enquiries, but understanding likely triggers helps you prepare your response.
Why HMRC Tax Enquiries are Opened
Here’s something important to remember: HMRC tax enquiries do not always mean fraud or serious wrongdoing. Many enquiries are routine checks or random selections designed to test overall compliance levels across the UK tax system.
Typical reasons for enquiries
- Random selection – HMRC run random enquiries to maintain compliance and test their risk models
- Data-matching issues – Discrepancies between your return and information from banks, employers, or the Land Registry
- Large changes between years – A sudden jump or drop in income, expenses, or profits
- Late or incomplete returns – Missing information or amended returns can trigger further checks
- Industry risk factors – Certain sectors face more scrutiny due to historical under-reporting
Specific examples of HMRC data sources
HMRC compares self assessment figures with Real Time Information (RTI) from payroll data submitted by employers. If your employment history shows income that doesn’t appear on your return, this raises a red flag. Taxpayers can access and verify the tax-related information HMRC holds about their employment, income, and tax codes through HMRC’s online services.
Bank interest and dividend income reported by financial institutions is cross-checked against your personal tax account. Property transactions recorded at the Land Registry can prompt questions about undeclared rental income or capital gains.
Under the Common Reporting Standard, HMRC receive information about UK residents’ overseas bank accounts from tax authorities worldwide. This data frequently triggers enquiries into offshore income.
Sectors under closer watch
Construction, hospitality, online trading, and cash-based businesses often face more frequent HMRC tax enquiries. HMRC’s risk models flag these sectors because of historical patterns of under-reporting.
Tips from members of the public, information from other government departments, and HMRC’s internal analytics also lead to enquiries. None of this means you’ve done anything wrong—but understanding these triggers helps you prepare a thorough response.
Types of HMRC Tax Enquiries
HMRC tax enquiries can take several forms depending on the scope and the tax involved. The main distinction is between aspect enquiries, full enquiries, and specialised compliance checks.
A key part of ‘assessment HM revenue’ related enquiries is the assessment process for self-employment income and tax liabilities, which often involves reviewing how income is reported and calculated.
Aspect enquiry
An aspect enquiry focuses on a specific item on your return. HMRC might question:
- Property income declared for 2022/23
- Capital gains from selling shares or a second home
- Unusually high motor expenses in your 2023/24 self assessment tax return
- A particular relief or allowance claim
The HMRC enquires letters will usually indicate which aspect HMRC want to examine. Although the law treats any enquiry as covering the whole return, in practice HMRC limit their questions to the selected area unless something else comes to light.
Full enquiry
A full enquiry means HMRC review your entire tax return, examining all income sources, reliefs, and claims. This typically happens when HMRC suspect wider inaccuracies or when initial questions reveal concerns beyond the original focus.
For example, a contractor might face a full enquiry into their 2021/22 and 2022/23 returns if HMRC believe undeclared income or inflated expenses affect multiple years.
Other compliance checks
Beyond self assessment, HMRC run various other checks:
- VAT compliance visits – Inspection of VAT records at your business premises
- PAYE employer record checks – Review of payroll records, paye tax codes, and benefits in kind
- CIS (Construction Industry Scheme) reviews – Verification of subcontractor payments and deductions
- Corporation tax enquiries – Examination of company accounts, director’s loan accounts, and tax computations
Stand-alone self assessment enquiries focus only on personal tax, but be aware that changes to your income figures may affect related tax credit or Universal Credit claims.
Your Rights and Safeguards During HMRC Tax Enquiries
Throughout the process of HMRC tax enquiries, you have legal rights. HMRC must follow the law and the HMRC Charter, which sets out standards for how they should treat taxpayers. HMRC staff are available for engagement forums, and there are established procedures for communication and addressing issues involving HMRC personnel.
Your fundamental rights
Where large penalties are at stake or HMRC allege deliberate behaviour, Article 6 of the European Convention on Human Rights provides additional protections, including the right to a fair hearing.
During the HMRC tax enquiries, you are entitled to:
- Be treated professionally and courteously by every HMRC officer
- Ask HMRC to explain why specific information is needed
- Challenge requests that appear irrelevant to the enquiry
- Appoint an authorised agent (tax adviser, accountant, or solicitor) to handle all correspondence and meetings
- Receive clear explanations of any proposed adjustments
- Appeal against information notices, assessments, and amendments within 30 days
- Ask the First-tier Tribunal to direct HMRC to close an enquiry if it has gone on unreasonably long
The HMRC Charter
The HMRC Charter commits officers to treating you fairly, helping you get things right, and being professional. If you feel HMRC have not met these standards, you can raise a formal complaint through their complaints procedure or contact the Adjudicator.
What HMRC Can Ask for:
During HMRC tax enquiries, officers may request information and documents that are “reasonably required” to check your tax position. It is important to provide and verify accurate information HMRC requests, as this ensures compliance and helps resolve enquiries efficiently. This power is not unlimited.
What HMRC commonly request
- Bank and building society statements covering the relevant tax year
- Business invoices, receipts, and till rolls
- Mileage logs and vehicle expense records
- Rental agreements and property income schedules
- Loan documents and director’s loan account records
- Explanations of how particular document figures were calculated
- Contracts, agreements, and board minutes for companies
What HMRC cannot demand
HMRC cannot require you to produce:
- Documents that do not exist
- Personal notes covered by legal professional privilege
- Records clearly unrelated to the tax year or issue under enquiry
- Every bank statement for all family members when only your personal details are relevant
If you believe a formal request is too broad, you can query its relevance. If HMRC insist and issue a formal information notice, you have the right to appeal to the First-tier Tribunal.
Penalties for non-compliance
Failure to comply with a valid information notice can lead to an initial penalty of £300, plus daily penalties of up to £60 for continued non-compliance. However, if you have a reasonable excuse (such as illness or the records being destroyed in a fire), or if you agree a new timescale with HMRC, you may avoid these penalties.
Practical tip: Keep organised digital and paper records from at least 5 April 2019 onwards. This makes responding to HMRC tax enquiries far less stressful.
How to Respond if HMRC Start an Enquiry
When you receive HMRC tax enquiries, the first rule is simple: never ignore them. Always read letters promptly and note the response deadline printed on the first page—typically Monday to Friday working days, excluding bank holidays.
Immediate steps
- Read the HMRC tax enquiries carefully – Identify what HMRC are asking and by when
- Contact a tax adviser – If the enquiry appears complex, covers multiple years, or raises concerns about deliberate behaviour, get professional help immediately
- Create a dedicated folder – Keep all correspondence, both digital and paper, in one place
- Log all phone calls – Record dates, times, HMRC officer names, and what was discussed
Responding effectively
Reply in writing, answering HMRC’s particular question directly and enclosing copies (never originals) of requested documents. Use recorded or tracked post for important responses so you have proof of delivery.
Using your personal tax account
You can check correspondence and some aspects of your tax position through your personal tax account on GOV.UK. However, most substantive enquiry responses should be sent in writing to the address shown on HMRC’s letter.
If you need to contact HMRC by telephone, call the relevant HMRC helpline. You can find phone numbers and HMRC contact information on GOV.UK.
Making Changes to Your Tax Return During an Enquiry
If you realise you need to make changes to your tax return while an HMRC tax enquiries are ongoing, it’s important to act promptly and follow the correct procedures. Amending your tax return during an enquiry can help you correct mistakes, claim a tax refund if you’ve paid too much tax, or update your details to reflect your current circumstances.
When and how to amend your return
You can amend your tax return during an enquiry if you discover an error, omission, or need to update your information. To do this, contact the HMRC officer managing your enquiry as soon as possible. You can notify HMRC in writing, by phone, or by using the online form provided on GOV.UK. When making a formal request to amend your return, clearly explain the changes, provide supporting documents, and include your tax reference and National Insurance number for identification.
Implications for the enquiry process
Making an amended return during an enquiry may mean the HMRC officer needs to review your case in more detail, which can extend the length of the enquiry. You might be asked to provide additional documents or explanations to support your changes, especially if the amendment affects your income tax, self assessment, PAYE tax codes, or tax credits. In some cases, the process may lead to a contract settlement agreement, which will set out any extra tax, interest, or penalties due.
It’s important to understand your rights and obligations throughout the enquiry. If you’re unsure about any aspect of the process, seek advice from a qualified tax professional or contact HMRC directly.
Common Stages of HMRC Tax Enquiries
Most HMRC tax enquiries follow a recognisable pattern from opening letter to final closure. Understanding these stages helps you track progress and plan your responses.
Typical stages
- Opening notice – HMRC send written confirmation that your return is under enquiry
- Initial information request – A list of questions and documents HMRC want to see
- Review of documents – HMRC analyse the information you’ve provided
- Follow-up questions – Additional queries based on what they’ve found
- Meeting or phone discussion – In some cases, HMRC may request a meeting to discuss the issues
- Calculation of underpaid or overpaid tax – HMRC prepare figures showing any additional tax due (or, occasionally, a tax refund)
- Agreement or dispute – You either accept HMRC’s conclusions or challenge them
- Formal closure notice – HMRC issue a closure notice confirming the outcome and any amendments
HMRC Tax Enquiry Time Limits
Straightforward HMRC tax enquiries can close within a few months, especially if you provide information quickly and there are no disputes. More complex business enquiries covering multiple years—say 2018/19 to 2022/23—may take over a year to resolve.
During the enquiry, HMRC may amend your tax return figures on a provisional basis. If you disagree with these amendments, you have the right to appeal.
Contract settlement agreement
In many cases, the HMRC tax enquiries conclude with a contract settlement agreement. This document sets out the additional tax, interest, and any penalties due. It includes a payment date, normally 30 days after you accept the settlement.
Penalties, Tax, Interest and Payments
HMRC tax enquiries can result in additional tax being due, plus statutory interest and, in some cases, penalties for errors.
How penalties work
| Behaviour | Penalty Range | Notes |
| Reasonable care taken | 0% | No penalty if you made an honest mistake |
| Careless (unprompted disclosure) | 0-30% | Lower end if you tell HMRC before they find out |
| Careless (prompted disclosure) | 15-30% | HMRC discovered the error first |
| Deliberate (unprompted) | 20-70% | You knew it was wrong but disclosed voluntarily |
| Deliberate (prompted) | 35-70% | HMRC discovered it themselves |
| Deliberate and concealed | 50-100% | Active steps to hide the error |
Offshore income can attract even higher penalties, sometimes up to 200% of the tax due.
Interest charges
Interest runs from the original due date of the tax until payment. For 2022/23 self assessment, that means interest starts from 31 January 2024 regardless of whether the enquiry is your fault or HMRC’s.
Keep current payments up to date
While HMRC tax enquiries are ongoing, continue paying your current year tax (for example, 2024/25 payments on account). Set aside funds for any likely settlement so you’re not caught short when the enquiry closes.
Correcting Mistakes Before and During an Enquiry
If you discover an error on your tax return before HMRC open an enquiry, you can usually correct it by submitting an amended return within 12 months of the filing deadline.
Unprompted disclosures
For earlier years beyond the amendment window—such as 2019/20 or 2020/21—you can make a voluntary disclosure through HMRC’s Digital Disclosure Service. This is known as an unprompted disclosure because HMRC haven’t asked you about it yet.
Unprompted disclosures typically attract much lower penalties than prompted ones. If you’ve realised you paid too much tax or missed a tax refund entitlement, you might even get money back.
Disclosing during an enquiry
If HMRC tax enquiries are already underway and you discover additional errors, tell your HMRC adviser or the officer handling your case immediately. Clearly distinguish between careless mistakes (you failed to take reasonable care) and deliberate ones (you knew the figure was wrong).
Early, voluntary disclosure during an enquiry still reduces penalties compared with HMRC uncovering the problem themselves.
If You Disagree with HMRC’s Conclusions
You do not have to accept HMRC’s view at the end of HMRC tax enquiries if you believe it is wrong. Taxpayers successfully challenge HMRC decisions every year.
Your options to Appeal HMRC Tax Enquiries
- Informal discussion – Talk to the HMRC officer to clarify misunderstandings or provide additional evidence
- Internal review – Request an internal review by a different HMRC officer who wasn’t involved in the original decision
- Formal appeal – Appeal to the First-tier Tribunal (Tax Chamber) within 30 days of the closure notice or assessment
- Alternative Dispute Resolution (ADR) – In some cases, a trained facilitator can help you and HMRC reach agreement without a tribunal hearing
The 30-day deadline
The standard time limit to appeal against an amendment, closure notice, or assessment is 30 days. If you miss this deadline, you may still be able to apply for a late appeal, but you’ll need to show reasonable excuse.
When appealing, send a clear written statement setting out your grounds—why you believe HMRC’s figures or interpretation is incorrect.
Professional advice for HMRC Tax Enquiries
Before taking a case to tribunal, especially where records are incomplete or large sums covering multiple tax years are involved, seek specialist professional advice. Tax litigation can be expensive, and an experienced adviser can help you assess whether your case is strong enough to pursue.
Help, Support and Professional Representation
Individuals and small businesses do not need to face HMRC tax enquiries alone. Support is available, and getting the right help early can make a significant difference to the outcome. HMRC can also provide additional support for individuals facing health conditions, disabilities, financial hardships, or other personal circumstances.
Qualified tax advisers
Consider contacting a qualified tax adviser or chartered tax professional if your enquiry involves:
- Suspected deliberate behaviour
- Offshore income or assets
- More than one tax year
- Complex business structures
- Significant amounts of tax
An HMRC adviser can handle all correspondence, attend meetings, negotiate settlements, and ensure your rights are protected throughout the process.
Fee protection insurance
Some people hold fee protection insurance through their accountant. This insurance helps cover professional fees incurred during HMRC tax enquiries, so you don’t have to worry about mounting adviser costs while the enquiry is ongoing.
Free and low-cost help
If you’re on a low income or facing personal difficulties, tax charities such as TaxAid and Tax Help for Older People offer free advice. Citizens Advice can also provide guidance on dealing with HMRC and understanding your rights.
Get Expert Support for HMRC Tax Enquiries Today
Early advice and good record keeping are the most effective ways to reduce stress and reach a fair outcome in HMRC tax enquiries. Whether your enquiry is a quick answer to a particular question or a lengthy investigation into multiple years, staying organised and getting professional support puts you in the strongest position.
At Taxcom, our experienced tax specialists provide clear, practical support for HMRC tax enquiries, tax investigations, VAT reviews, PAYE checks, and serious matters such as CoP8 and CoP9 cases. We take the pressure off by handling HMRC correspondence, protecting your rights, and working towards the best possible outcome for your situation.
If you’ve received a letter of HMRC tax enquiry, don’t panic, but don’t delay either. Gather your documents, note the deadline, and consider speaking to a qualified adviser. The sooner you respond, the sooner you can move forward.
Whether you need urgent help or a personalised tax solution, speak to our experts today and put your HMRC tax enquiries in safe, professional hands.