Types of HMRC enquiry, explained
HMRC uses more than fifty distinct enquiry, compliance check and nudge letter routes. Each one has its own statutory basis, scope and time limit. Find the letter you have received below, read what it means, then open the guide that deals with it in detail.
Self Assessment and personal tax
Aspect enquiry
Statutory basis: s9A TMA 1970 · Who it affects: Anyone who files a Self Assessment return
HMRC questions one part of your return, such as a single relief, expense figure or disposal, rather than the whole year. Aspect enquiries are the most common personal tax check and often close once the point is evidenced.
self assessment enquiry helpFull enquiry
Statutory basis: s9A TMA 1970 · Who it affects: Directors, landlords and the self-employed
HMRC reviews the whole return and the records behind it. A full enquiry usually means HMRC has a risk concern about the overall picture, not one entry, so the record request is broad and the timetable longer.
self assessment enquiry helpDiscovery assessment
Statutory basis: s29 TMA 1970 · Who it affects: Taxpayers with a year already closed
HMRC assesses tax for a year outside the normal enquiry window after discovering an insufficiency. Strict conditions apply, and whether the assessment is valid is often the strongest ground of appeal.
discovery assessment guidanceFailure to notify chargeability enquiry
Statutory basis: Schedule 41 FA 2008 · Who it affects: People who never registered for a tax they owed
HMRC checks why you did not tell it you had income or gains to report. Penalties turn on whether the failure was careless or deliberate, and on whether you came forward first.
self assessment enquiry helpCapital gains and 60-day property disposal check
Statutory basis: Schedule 2 FA 2019; TCGA 1992 · Who it affects: Anyone selling UK residential property
HMRC compares Land Registry data with your reported disposals. Missed 60-day returns and understated gains are a common trigger for a check.
self assessment enquiry helpResidence and domicile enquiry
Statutory basis: Schedule 45 FA 2013 (statutory residence test) · Who it affects: Internationally mobile directors and investors
HMRC tests your day counts, ties and records against the statutory residence test. Evidence of travel and workdays matters more than intention.
Making a Voluntary Disclosure to HMRCHigh Income Child Benefit Charge check
Statutory basis: Chapter 8 Part 10 ITEPA 2003 · Who it affects: Higher-earning parents
HMRC matches Child Benefit records to income data and writes where the charge looks unpaid. Many cases are resolved by filing the missing returns.
HMRC Compliance Checks Explained
Company and corporation tax
Corporation tax enquiry
Statutory basis: Paragraph 24 Schedule 18 FA 1998 · Who it affects: Limited companies
HMRC opens a formal enquiry into a company tax return, usually within twelve months of filing. It can cover the whole return or a single item.
corporation tax enquiry adviceDirector's loan account and s455 enquiry
Statutory basis: s455 CTA 2010 · Who it affects: Owner-managed companies
HMRC tests whether money drawn by a director is a loan, and whether the s455 charge was paid. Poor bookkeeping is the usual cause.
directors loan account enquiry helpDividend versus salary and illegal dividend enquiry
Statutory basis: Part 23 Companies Act 2006; ITTOIA 2005 · Who it affects: Director shareholders
HMRC checks whether dividends were lawfully declared out of distributable profits. Dividends voted without profits can be recharacterised as loans or earnings.
directors loan account enquiry helpBenefits in kind and P11D check
Statutory basis: Part 3 ITEPA 2003 · Who it affects: Companies providing cars, loans or private cover
HMRC compares payroll data with company accounts for unreported benefits. Company cars, private medical cover and beneficial loans are the usual findings.
help with an IR35 or off-payroll enquiryCompany strike-off and dormancy challenge
Statutory basis: Part 31 Companies Act 2006 · Who it affects: Companies closing or filing dormant
HMRC objects to a strike-off or challenges dormant filings where it believes trade continued or tax is outstanding. The objection suspends the closure.
corporation tax enquiry adviceTransfer pricing enquiry
Statutory basis: Part 4 TIOPA 2010 · Who it affects: Companies transacting with connected overseas parties
HMRC tests whether intra-group prices follow the arm's length principle. Documentation quality drives the outcome.
corporation tax enquiry adviceLoans to participators and DLA write-off
Statutory basis: ss455 and 464A CTA 2010 · Who it affects: Close companies
Writing off a director's loan triggers income tax and National Insurance consequences. HMRC checks the treatment on both sides.
directors loan account enquiry help
VAT
VAT compliance check and VAT visit
Statutory basis: Schedule 11 VATA 1994; Schedule 36 FA 2008 · Who it affects: VAT-registered businesses
HMRC reviews returns, records and sometimes visits your premises to test the figures. The scope is set out in the opening letter.
help with an HMRC VAT compliance checkVAT registration verification
Statutory basis: Schedule 1 VATA 1994 · Who it affects: New VAT applicants
HMRC checks that the business is genuine and trading before issuing a number. Expect requests for contracts, invoices and bank evidence.
help when HMRC is holding your VAT refundVAT repayment verification
Statutory basis: s73 and s25 VATA 1994 · Who it affects: Businesses in a repayment position
HMRC holds the refund while it checks the input tax claimed. Clear schedules and copy invoices release it faster than argument.
help when HMRC is holding your VAT refundPartial exemption and input tax recovery check
Statutory basis: Part XIV VAT Regulations 1995 · Who it affects: Businesses with exempt and taxable supplies
HMRC tests the method used to split recoverable and irrecoverable input tax, and whether it was agreed.
help with an HMRC VAT compliance checkOption to tax and property VAT enquiry
Statutory basis: Schedule 10 VATA 1994 · Who it affects: Commercial property owners and SPVs
HMRC checks whether an option to tax was validly notified before VAT was charged or recovered on a property.
help with an HMRC VAT compliance checkFlat Rate Scheme misuse check
Statutory basis: Part VIIA VAT Regulations 1995 · Who it affects: Small businesses on the flat rate scheme
HMRC tests the sector percentage used and whether the limited cost business rules were applied correctly.
help with an HMRC VAT compliance checkVAT threshold and business splitting check
Statutory basis: Schedule 1 paragraphs 1A and 2 VATA 1994 · Who it affects: Connected small businesses
HMRC examines whether one business has been artificially separated to stay under the registration threshold, and can direct a single registration.
help with an HMRC VAT compliance checkMaking Tax Digital for VAT compliance check
Statutory basis: Schedule 11 VATA 1994; VAT Notice 700/22 · Who it affects: All VAT-registered businesses
HMRC checks digital record keeping and digital links between systems, not just the return figures.
help with an HMRC VAT compliance checkDomestic reverse charge check
Statutory basis: VAT (Section 55A) Order 2019 · Who it affects: Construction businesses
HMRC tests whether reverse charge treatment was applied on in-scope construction supplies, in both directions.
help with a delayed CIS refund
Employment taxes
PAYE employer compliance review
Statutory basis: Part 11 ITEPA 2003; PAYE Regulations 2003 · Who it affects: Any employer
HMRC reviews payroll, expenses, benefits and status across the workforce, often starting with a records visit.
help with an IR35 or off-payroll enquiryIR35 and off-payroll working check
Statutory basis: Chapter 8 and Chapter 10 Part 2 ITEPA 2003 · Who it affects: Contractors, agencies and end clients
HMRC tests whether an engagement is employment in all but name, using control, substitution and mutuality of obligation.
help with an IR35 or off-payroll enquiryEmployment status enquiry
Statutory basis: Case law status tests; ITEPA 2003 · Who it affects: Businesses using self-employed labour
HMRC argues that workers treated as self-employed are employees, creating PAYE and NIC exposure for the engager.
help with a delayed CIS refundCIS compliance check
Statutory basis: Chapter 3 Part 3 FA 2004 · Who it affects: Contractors in construction
HMRC tests verification, deduction rates, monthly returns and the status of subcontractors.
help with a delayed CIS refundCIS refund verification
Statutory basis: Chapter 3 Part 3 FA 2004; PAYE Regulations · Who it affects: Subcontractor companies reclaiming deductions
HMRC holds a CIS repayment while it matches deductions to contractor returns and payslips.
help with a delayed CIS refundUmbrella and managed service company enquiry
Statutory basis: Chapter 9 Part 2 ITEPA 2003 · Who it affects: Contractors using intermediaries
HMRC examines whether a scheme provider was involved in the company, which can transfer debts to directors.
help with an IR35 or off-payroll enquiryExpenses and dispensations review
Statutory basis: Part 4 ITEPA 2003 · Who it affects: Employers reimbursing costs
HMRC tests whether reimbursed expenses met the wholly, exclusively and necessarily test and were reported correctly.
help with an IR35 or off-payroll enquiry
Reliefs and claims
R&D tax relief enquiry
Statutory basis: Part 13 CTA 2009 · Who it affects: Companies claiming R&D relief
HMRC tests whether a project sought an advance in science or technology and resolved genuine uncertainty.
help with an R&D tax credit enquiryR&D claim rejection and Schedule 36 R&D notice
Statutory basis: Part 13 CTA 2009; Schedule 36 FA 2008 · Who it affects: Companies with contested claims
HMRC formally demands claim evidence, then reduces or removes the claim where the technical narrative is unsupported.
help with an R&D tax credit enquiryCreative industry relief enquiry
Statutory basis: Parts 15 to 15E CTA 2009 · Who it affects: Film, games, theatre and TV companies
HMRC checks cultural certification, core expenditure and the separate trade requirement.
help with an R&D tax credit enquiryEIS and SEIS compliance check
Statutory basis: Parts 5 and 5A ITA 2007 · Who it affects: Startups and their investors
HMRC tests qualifying trade, risk-to-capital and the use of funds before or after compliance certificates are issued.
help with an R&D tax credit enquiryBusiness Asset Disposal Relief enquiry
Statutory basis: Chapter 3 Part 5 TCGA 1992 · Who it affects: Directors selling or winding up
HMRC tests the personal company conditions and the two-year qualifying period.
self assessment enquiry helpCapital allowances and AIA enquiry
Statutory basis: CAA 2001 · Who it affects: Companies buying plant and property fixtures
HMRC checks whether expenditure qualifies, when it was incurred and whether allowances were shared correctly.
corporation tax enquiry adviceSDLT refund and multiple dwellings relief enquiry
Statutory basis: Part 4 FA 2003 · Who it affects: Property buyers and landlords
HMRC reclaims refunds obtained through speculative reclaim agents where the relief conditions were never met.
Disclosure facilities and nudge letters
Let Property Campaign
Statutory basis: HMRC disclosure facility; Schedule 24 FA 2007 · Who it affects: Residential landlords
A structured route to disclose undeclared rental income with better penalty terms than waiting for HMRC.
Worldwide Disclosure Facility
Statutory basis: HMRC disclosure facility; requirement to correct rules · Who it affects: Taxpayers with overseas income or assets
The route for offshore income and gains. Offshore penalties are materially higher, so timing matters.
Making a Voluntary Disclosure to HMRCDigital Disclosure Service
Statutory basis: HMRC disclosure facility · Who it affects: Anyone with undeclared UK income
The general online route to notify and then disclose undeclared tax within the deadline HMRC sets.
Making a Voluntary Disclosure to HMRCCRS and offshore data nudge letter
Statutory basis: Common Reporting Standard; International Exchange of Information · Who it affects: People with overseas accounts
HMRC already holds account data from overseas banks and invites you to check your returns.
Making a Voluntary Disclosure to HMRCOnline marketplace and platform seller nudge letter
Statutory basis: Platform Operators (Due Diligence and Reporting) Regulations 2023 · Who it affects: eBay, Etsy, Vinted, Amazon and Airbnb sellers
Platforms now report seller income to HMRC, which writes where the figures do not match your returns.
HMRC letters to online sellers and platform reportingCrypto asset nudge letter
Statutory basis: TCGA 1992; HMRC Cryptoassets Manual · Who it affects: Crypto investors and traders
Exchange data drives these letters. Disposals include swaps and spending, not just conversions to sterling.
Making a Voluntary Disclosure to HMRCDividend income nudge letter
Statutory basis: ITTOIA 2005 · Who it affects: Director shareholders
HMRC compares company accounts with personal returns and writes where dividends appear unreported.
directors loan account enquiry helpPersons of Significant Control nudge letter
Statutory basis: Part 21A Companies Act 2006 · Who it affects: Owners of registered companies
HMRC cross-checks PSC records against declared income from those companies.
corporation tax enquiry adviceGift Aid and charity donations nudge letter
Statutory basis: Part 8 ITA 2007 · Who it affects: Higher rate taxpayers claiming relief
HMRC checks that donations claimed were actually made and that enough tax was paid to cover them.
HMRC Compliance Checks Explained
Covid-era and other
SEISS overclaim check
Statutory basis: Schedule 16 FA 2020 · Who it affects: Self-employed grant recipients
HMRC recovers grants claimed where the trading or turnover conditions were not met.
self assessment enquiry helpCJRS furlough overclaim check
Statutory basis: Schedule 16 FA 2020 · Who it affects: Employers who furloughed staff
HMRC tests claim calculations and whether furloughed staff worked. Deliberate overclaims carry the highest penalties.
help with an IR35 or off-payroll enquiryEat Out to Help Out check
Statutory basis: Schedule 16 FA 2020 · Who it affects: Hospitality businesses
HMRC compares claimed covers with till and VAT data.
HMRC Compliance Checks ExplainedATED return enquiry
Statutory basis: Part 3 FA 2013 · Who it affects: Companies holding UK residential property
HMRC checks valuations and relief claims on annual tax on enveloped dwellings returns.
Code of Practice 8 investigation
Statutory basis: HMRC Code of Practice 8 (CC/FS factsheets) · Who it affects: Complex or high-value cases
A specialist investigation where HMRC suspects significant tax at stake or avoidance, but not fraud.
Code of Practice 8 investigationsSchedule 36 information notice
Statutory basis: Schedule 36 FA 2008 · Who it affects: Taxpayers and third parties
A legally binding demand for documents and information, backed by penalties and a limited appeal route.
Schedule 36 information noticesBusiness records check
Statutory basis: Schedule 36 FA 2008 · Who it affects: Small businesses
HMRC tests whether your records are adequate to produce a correct return, rather than checking a figure.
HMRC Compliance Checks ExplainedPenalty enquiry
Statutory basis: Schedule 24 FA 2007 · Who it affects: Anyone with an inaccuracy found
A separate strand deciding behaviour, disclosure quality and the resulting penalty range.
HMRC penalties after an enquiryFollower Notice and Accelerated Payment Notice
Statutory basis: Part 4 FA 2014 · Who it affects: Users of marketed avoidance schemes
HMRC requires the disputed tax up front and penalises failure to amend after a relevant court ruling.
Code of Practice 8 investigationsSecurity deposit notice
Statutory basis: Schedule 11 VATA 1994; s121C SSAA 1992 · Who it affects: Businesses with a poor compliance history
HMRC demands a deposit before allowing trading to continue where it sees a risk to future VAT or PAYE.
HMRC penalties after an enquiry
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