HMRC enquiry process
What an HMRC enquiry looks like in practice, the timeline, and how to manage one without unnecessary cost.
What an enquiry is
An HMRC enquiry is a formal review of one or more of your tax returns. It starts with a written notice and ends when HMRC issues a closure notice with their conclusions.
For Self Assessment, HMRC has 12 months from the date you filed to open an enquiry into a return. For Corporation Tax, it is also normally 12 months from the date the return was filed. Outside that window, they can only act if a "discovery" applies (typically negligence or error).
What triggers an enquiry
- Random selection: happens to a percentage of returns each year
- Risk profiling: figures that look unusual against industry averages
- Specific anomalies: large round numbers, missing items, big swings vs prior years
- Third-party data: banks, employers, marketplaces share information that doesn't match your return
- Specific campaigns: HMRC sometimes targets specific sectors or behaviours
The process
- Opening notice: HMRC writes to you, identifying the return and (sometimes) the area of concern. They'll usually request specific records.
- Information gathering: you provide records and explanations. HMRC may follow up with more questions.
- Meeting (if needed): for complex enquiries, HMRC may want a face-to-face or phone meeting. You're entitled to representation.
- Resolution: HMRC writes to confirm their conclusion: agree, propose adjustment, or open formal assessment.
- Closure notice: the formal end of the enquiry, stating any tax due and any penalty.
How long it takes
Simple enquiries can close in 3-6 months. Complex enquiries, especially those involving multiple years or contested figures, can run for 1-2 years or longer. HMRC sometimes drags; you can apply to the First-tier Tax Tribunal for a closure notice if you think they're being unreasonable.
Practical advice
- Respond by the deadlines HMRC sets: failure to comply with a Schedule 36 information notice carries its own penalties
- Provide what's asked, no more: don't volunteer extra unrequested information
- Keep all correspondence (HMRC, your accountant, your records) in one place
- Consider tax investigation insurance for next year: covers professional fees in defending an enquiry
- Get professional representation if the enquiry feels heavy or escalates
If you spot an error during the enquiry
If you realise you made a mistake on the return, disclose it now. Voluntary disclosure during an enquiry significantly reduces the penalty compared with HMRC discovering it themselves. Concealing it makes things much worse.