HMRC enquiries & disclosures, handled calmly.

An HMRC enquiry, or compliance check, is HMRC's way of reviewing a return or a specific item on it. It will usually ask for information and documents, may ask questions or request a meeting, and ends with a closure notice setting out any tax due.

HMRC has a limited window to open an enquiry into a Self Assessment return:

• Return filed on time: 12 months from the date HMRC received it
• Return filed late: up to the quarter day after the first anniversary of filing (the quarter days are 31 January, 30 April, 31 July and 31 October)
• Amended return: up to the quarter day after the first anniversary of the amendment

Company tax returns follow the same rules, with one difference: for a company in a group that is not a small group, the 12 months run from the filing deadline rather than the date the return was filed.

Once the window has closed, HMRC can only reopen a year through a discovery assessment, within the longer time limits below.

Many enquiries are routine checks, but how the first response is handled shapes the rest. We manage the process from the opening letter to closure.

Outside the enquiry window, HMRC can still raise an assessment if it discovers tax has been lost. The time limits run from the end of the tax year, or for a company the end of the accounting period:

• 4 years: the normal limit, where you took reasonable care
• 6 years: where the loss of tax was careless
• 12 years: where income tax, capital gains tax or inheritance tax was lost on an offshore matter, such as overseas income or assets, unless it was deliberate. This applies from 2015/16 even where you took reasonable care, and for 2013/14 and 2014/15 only where you were careless
• 20 years: where the loss of tax was deliberate, where you never told HMRC you needed to file a return, or where a tax avoidance scheme was not disclosed when it should have been

Keeping good records, and correcting errors yourself before HMRC asks, keeps both the time limit and any penalty at the lower end.

A nudge letter means HMRC has information suggesting income or gains may not have been declared. It is not an enquiry, and some ask you to sign a certificate confirming your affairs are in order. Don't sign it without checking. The information usually comes from:

• the Common Reporting Standard (CRS): under this OECD standard, HMRC receives information from other countries about UK residents' financial accounts and investments overseas
• online platforms: since 1 January 2024, marketplaces, gig apps and short-let platforms send HMRC an annual report of what each seller earned
• crypto platforms: since 1 January 2026 they collect customers' tax details under the Cryptoasset Reporting Framework, with HMRC receiving the data from 2027

We review your position, respond to HMRC and make a disclosure if one is needed.

Read: Side hustles and selling online: what HMRC now sees →

If income or gains have been left off a return, coming forward before HMRC asks generally means lower penalties. UK matters are usually disclosed through the Digital Disclosure Service, and offshore income or gains through the Worldwide Disclosure Facility. In both cases you notify HMRC first, then generally have 90 days to make the full disclosure and pay what is due.

We assess what needs disclosing, calculate the tax, interest and penalties, prepare the disclosure and deal with HMRC's questions.

Penalties for errors in a return depend on why the error happened and whether you told HMRC before it asked:

• Careless: up to 30%, reducible to nil if you tell HMRC unprompted, or 15% if prompted
• Deliberate: up to 70%, with a minimum of 20% unprompted or 35% prompted
• Deliberate and concealed: up to 100%, with a minimum of 30% unprompted or 50% prompted

The percentages apply to the extra tax due, and higher figures can apply to offshore matters.

Interest is charged on tax paid late at the Bank of England base rate plus 4% (plus 2.5% before 6 April 2025). Where HMRC repays tax, it adds repayment interest at base rate minus 1%, with a minimum of 0.5%.

You can appeal an HMRC penalty if you had a reasonable excuse (such as serious illness, bereavement or a failure of HMRC's systems), or if the penalty is wrong. Appeals are generally made within 30 days of the penalty notice. If HMRC rejects the appeal, you can ask for an independent review or take it to the tax tribunal.

If you have paid too much tax because of a mistake in a return or an assessment, you can claim it back through overpayment relief. The claim must be made within 4 years after the end of the tax year or accounting period concerned, and some exclusions apply, for example where the return was made on the basis of the practice generally followed at the time.