Is my HMRC enquiry random or targeted?

There is no public marker on an enquiry letter telling you whether HMRC selected your return because of a specific risk flag or purely at random. In practice, the large majority of enquiries follow some form of risk indicator, since HMRC's resources are targeted where a discrepancy is more likely.

A genuinely random sample is still used, partly to catch non-compliance that risk models miss, and partly to keep those models accurate by comparing outcomes across risk-flagged and random cases.

Section 9A of the Taxes Management Act 1970 gives HMRC a broad power to enquire into any return within the time limit, without distinguishing between random and risk-based selection in the legislation itself. Both routes carry exactly the same statutory process once the enquiry is open.

HMRC's Connect system draws together data from banks, Land Registry, letting agents, online marketplaces, payment processors and international information exchange under the Common Reporting Standard. It flags mismatches between what HMRC already knows and what a return declares, which drives most risk-based selection.

Because HMRC does not have to give reasons for opening an enquiry, and there is no appeal against the decision to open one, it is rarely worth spending much effort trying to establish which category your case falls into. Your obligations to respond and provide accurate information are the same either way.

If HMRC's enquiry letter references specific figures, such as a particular expense category, dividend level or property income, that strongly suggests a risk-based trigger rather than a random check. General requests for full records across the board can indicate either.

Directors should keep company and personal records consistent regardless, since a risk-based Connect flag on one side of the personal/company split often leads HMRC to ask about the other.

Whether random or targeted, the enquiry itself has no fee attached. Costs arise from professional time spent responding, and from any additional tax, interest or penalty if HMRC identifies an error.

Tax investigation insurance included with our Growth plans covers professional costs of managing the enquiry through to closure — see /fees.

Do not assume a general-looking letter means the enquiry is random and therefore low risk. HMRC sometimes frames risk-based enquiries broadly to see what else comes to light.

Avoid contacting HMRC to ask directly whether the enquiry is random, since officers are not required to answer and it rarely changes how you should respond.

Do not treat a random enquiry casually. HMRC still applies the same penalty rules if it finds an error, regardless of how the case was originally selected.