Compliance checks and formal enquiries
Most HMRC enquiries begin with a single letter about a single return. What happens after that depends heavily on how the first few exchanges are handled.
Tell us what has arrived
We reply by email. No attachments, nothing sensitive yet.
What a compliance check is
A compliance check is HMRC examining whether a return is correct. It can be opened into a Self Assessment return under Section 9A of the Taxes Management Act 1970, or into a Company Tax Return under Paragraph 24 of Schedule 18 to the Finance Act 1998.
The letter will normally name the return and period under enquiry and set out what HMRC wants. What it will not tell you is why your return was selected, or how wide the officer intends to go.
Where HMRC believes there may be a significant loss of tax, its Fraud Investigation Service can take over a check started elsewhere in HMRC, or open its own, and run it as a Code of Practice 8 investigation.
The enquiry window
A formal enquiry starts only when HMRC gives a notice of enquiry within the time the legislation allows. For a Self Assessment return, Section 9A sets that window:
- Return delivered on or before the filing date: the notice of enquiry must be given within 12 months after the day the return was delivered.
- Return delivered late: up to and including the quarter day (31 January, 30 April, 31 July or 31 October) next following the first anniversary of the day it was delivered.
- Return amended by you: up to and including the quarter day next following the first anniversary of the amendment. If that notice is given after the window for the original return has closed, the enquiry is limited to matters the amendment relates to or affects.
A return can receive only one notice of enquiry, apart from a further notice following an amendment. Company returns follow the same pattern under Paragraph 24 of Schedule 18, except that for a company in a group that is not a small group, the 12 months run from the filing date rather than the day of delivery. Once the window has closed, HMRC cannot open an enquiry into that return; to go back further it generally has to rely on a discovery assessment, which has its own statutory conditions.
What we do
- Establish what the letter is and which statutory footing it sits on
- Confirm the real deadline and, where appropriate, seek more time before it bites
- Take over the correspondence, so nothing reaches HMRC undrafted
- Establish what the records actually show before responding substantively
- Answer what was asked, and say so when a request falls outside the enquiry
- Manage the matter through to a closure notice, including any penalty position
Schedule 36 information notices
Where HMRC issues a formal information notice under Schedule 36 to the Finance Act 2008, it is a statutory requirement rather than a request, and penalties can follow non-compliance. Some information notices carry appeal rights, and the scope of what is reasonably required can sometimes be narrowed. Both are time-limited, so the notice needs reading properly on arrival rather than filed to deal with later.
Company enquiries travel
A corporation tax enquiry rarely stays about corporation tax. Once HMRC opens a check on a company return, the questions tend to reach the directors: loans to participators, dividends drawn against profits, benefits, PAYE treatment and VAT.
Those normally sit with different advisers, or with nobody. Where a company and its directors both have exposure, the positions need to be considered together rather than answered separately.
Nudge letters are not enquiries
A “one to many” nudge letter invites you to review your position. It is not a formal enquiry and no statutory enquiry period has begun. That does not make it safe to ignore: how you respond, or whether you respond at all, can shape whether a formal enquiry follows. If you are not certain which you have received, our letter identification guide sets out the differences.
Further reading
Common questions
How long does HMRC have to open an enquiry into my tax return?
If a Self Assessment return was delivered on or before the filing date, HMRC must give notice of enquiry under Section 9A within 12 months after the day it was delivered. For a late or amended return, the window runs to the quarter day after the first anniversary of delivery or amendment. Outside that window HMRC cannot open an enquiry, but it can raise a discovery assessment in defined circumstances.
Can HMRC look at years other than the one named in the letter?
An enquiry notice names a specific return and period. HMRC can seek to extend into other years, and whether it succeeds often depends on what emerges from the exchanges in the named year. This is the main reason for answering precisely rather than expansively.
Do I have to provide everything HMRC asks for?
Not automatically. An informal request is a request. A Schedule 36 information notice is a statutory requirement, and some notices carry appeal rights or can have their scope narrowed. Establishing which you have received determines what actually has to be produced.
How long does a compliance check take?
It varies with the complexity of the matter and how HMRC handles it, and we will not put a figure on your enquiry before seeing it. An enquiry remains formally open until HMRC issues a closure notice.
Start with the letter
Send a photo of page one on WhatsApp. We will tell you what it is, what the deadline means, and what a fixed fee would look like — within one working hour during office hours — Monday to Friday, 9am to 5pm.
We only need the letter. Please do not send bank statements, identity documents or your UTR at this stage.