Four things to remember as you proceed
Before submitting anything, check for errors
Conduct an internal pre-disclosure review.
If errors are identified, disclose them early, fully and clearly.
This can reduce penalties significantly, even after an enquiry has started.
Inconsistencies across your tax filings
Communicate carefully and know your rights
Keep your responses concise and support them with evidence.
Avoid speculation, unnecessary narrative, and informal calls you haven’t prepared for.
Alongside this, remember you have the right to:
- Understand why HMRC are enquiring
- Challenge unreasonable requests
- Appeal decisions if you disagree Use mediation (alternative dispute resolution) or appeal to the Tribunal if needed
Meet deadlines or agree extensions
Meet deadlines or agree extensions
If you need more time request it before the deadline. HMRC will often allow reasonable extensions if justified.
If you don’t meet deadlines, this could trigger daily penalties, formal notices and escalation.
Continue normal compliance as normal
HMRC expect ongoing compliance throughout the enquiry.
Continue filing returns and pay taxes on time.
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Frequently asked questions: what to do if HMRC contact you
Can HMRC contact me even if I think my tax returns are correct?
Yes. HMRC may open an enquiry or compliance check even where a taxpayer believes they have filed accurately. Enquiries can arise from routine risk assessment, sector-wide campaigns, data matching exercises, third-party information, or unusual entries in a return. Receiving a letter does not automatically mean HMRC believe wrongdoing has occurred. However, it is important to take the contact seriously, understand precisely what HMRC is reviewing, and respond appropriately within the required timeframe.
How long does an HMRC tax enquiry usually take?
The length of an HMRC enquiry depends on its complexity, the quality of records available, and how quickly information is provided. Straightforward enquiries may be resolved within a few months, while complex investigations involving multiple tax years, offshore matters, property transactions or director loan accounts can continue for significantly longer. Clear documentation, timely responses and proactive issue resolution can often help bring matters to a conclusion more efficiently.
What happens if HMRC find a mistake during an enquiry?
If HMRC identify an error, the outcome will depend on the nature of the mistake and how it arose. Tax may need to be repaid together with interest, and penalties may apply. In many cases, penalties can be reduced where taxpayers cooperate fully and make prompt, accurate disclosures. A structured review of the underlying issue before responding to HMRC can help ensure any corrections are handled appropriately and consistently.
Can a business challenge an HMRC information request?
Yes. HMRC have wide powers to request information, but requests must generally be relevant, proportionate and supported by the appropriate legal framework. Businesses are not necessarily required to provide information that falls outside the scope of a valid request. Where a request appears overly broad or unclear, it may be appropriate to seek clarification, discuss its scope, or consider available appeal rights. Professional advice can be particularly valuable in these situations.
What’s the difference between an HMRC enquiry, compliance check and investigation?
These terms are often used interchangeably, but they can refer to different stages or forms of HMRC activity. An enquiry typically involves reviewing a tax return, while a compliance check may extend to reviewing records, systems or specific transactions. More serious investigations may involve suspected avoidance, offshore issues or allegations of deliberate behaviour. Understanding the type of contact received helps determine the urgency of the situation and the most appropriate response strategy.
What should I do if I cannot meet HMRC’s deadline?
Contact HMRC before the deadline expires. In many cases, reasonable extensions can be agreed where there is a genuine need for additional time, such as gathering records or obtaining professional advice. Missing deadlines without communication can increase the risk of penalties, formal notices and escalation. Early engagement generally demonstrates cooperation and helps maintain a more constructive dialogue with HMRC.
Does receiving an HMRC letter mean I will face penalties?
No. An HMRC enquiry does not automatically result in penalties. Many enquiries are resolved with no additional tax liability or penalty assessment. Penalties are more likely where HMRC identify errors, omissions, failures to comply with information requests, or evidence of careless or deliberate behaviour. The way a taxpayer responds during the enquiry may also influence the level of any eventual penalty.
When should I seek specialist tax investigation support?
Specialist support should be considered as early as possible where substantial tax amounts are involved, multiple tax years are under review, complex business structures are affected, or HMRC raise concerns relating to offshore matters, property transactions, director loan accounts or suspected fraud. Early professional involvement can help manage communications, assess technical risks, protect taxpayer rights and reduce the likelihood of the enquiry expanding unnecessarily.
Can directors be personally affected by an HMRC business enquiry?
Yes. Although an enquiry may begin with a company, HMRC may review matters connected to directors where relevant, including remuneration arrangements, benefits, expenses, share transactions, loans to participators and personal tax returns. Directors should therefore ensure that both corporate and personal tax records are accurate, consistent and properly supported by documentation.
Is it better to wait for HMRC to find a problem or disclose it proactively?
In most circumstances, early disclosure is preferable where a genuine error has been identified. Voluntarily raising an issue, providing a clear explanation and cooperating with HMRC can help demonstrate good faith and may reduce the level of penalties compared with allowing HMRC to discover the matter independently. The most appropriate disclosure approach will depend on the specific circumstances and the stage the enquiry has reached.
What rights do taxpayers have during an HMRC enquiry?
Taxpayers have the right to understand what HMRC is checking, why information is being requested and what legal powers are being relied upon. They may also challenge certain requests, appeal decisions where appropriate and, in some circumstances, use alternative dispute resolution (ADR) to help resolve disagreements. Understanding these rights is an important part of achieving a fair and proportionate outcome.
Are certain sectors or transactions more likely to attract HMRC scrutiny?
Some areas are naturally subject to greater scrutiny because they involve higher tax risk or more complex rules. Examples can include property transactions, cash-intensive businesses, international activities, off-payroll working arrangements, businesses with director loan accounts and cross-border tax matters. Businesses operating in these areas should ensure that record-keeping, reporting and compliance processes are particularly robust.


