What Are Your Rights During an HMRC Enquiry?

An HMRC letter about your rights during a check usually arrives alongside, or shortly after, a compliance check or enquiry letter. It does not mean you have done anything wrong. It means HMRC is reviewing a tax return, claim or position and wants information, a meeting, or both.

The letter sits within a wider legal framework. Self Assessment and Corporation Tax enquiries are opened under the Taxes Management Act 1970 or Finance Act 1998 Schedule 18, and information requests are usually made or backed by Schedule 36 to the Finance Act 2008. Knowing which power HMRC is using tells you what you can and cannot be compelled to do.

Read the letter twice: once for the deadline, once for exactly what is being asked. Many people panic at the tone and miss the practical detail that actually determines what happens next.

HMRC opens compliance checks for many reasons: a data mismatch, a sector risk campaign, third-party information from banks, platforms or agencies, an unusual claim, or occasionally random selection. An enquiry letter rarely spells out the precise trigger in detail.

This uncertainty is unsettling, but it is not evidence against you. A large proportion of checks close with no change to the tax position. The purpose of the check is to verify, not to presume guilt, and your rights exist precisely because the process is investigative rather than punitive at the outset.

If you genuinely cannot work out why you have been selected, you can ask HMRC directly for the general area of concern. You are entitled to know what tax and period are under review even if the underlying selection criteria remain undisclosed.

HMRC can request documents and information that are reasonably required to check your tax position. This can include business records, contracts, invoices and, in some circumstances, personal bank statements, particularly where personal and business finances are mixed or income appears understated.

The key legal test is relevance and reasonableness, not simply what would be convenient for HMRC to review. A request for years of personal bank statements when the enquiry concerns one expense category may be disproportionate and worth challenging.

Where HMRC issues a formal notice under Schedule 36, some notices carry a right of appeal to the tax tribunal within 30 days; notices approved in advance by the tribunal generally do not. Read our guide to the hmrc-schedule-36-information-notice page for how that appeal process works in detail.

HMRC generally arranges business inspections and meetings by prior appointment. An unannounced visit is unusual outside specific inspection powers, and you can ask to see the officer's identification and the legal basis for any visit that arrives without notice.

A meeting with HMRC is usually voluntary rather than compulsory. You can decline an in-person meeting and offer to deal with matters in writing, ask for a video call instead, or request that any meeting only proceeds once your accountant can attend.

If a meeting does happen, you can ask questions, take your own notes and, in many cases, ask to record it if both sides agree in advance. There is no automatic right to record without HMRC's consent, so raise it before the meeting rather than during it.

The first fortnight sets the tone for the whole enquiry. Confirm the deadline, identify what is actually being requested, and decide whether you need an accountant involved before you reply to anything substantive.

Avoid sending an unfiltered pile of documents in the hope that it satisfies HMRC. An indexed, relevant response that maps directly to the request is far more effective and reduces the risk of follow-up questions dragging the enquiry out.

If you cannot meet the deadline, ask HMRC for an extension in writing before it passes, rather than after. Reasonable extension requests are usually granted where there is a genuine explanation.

There is no fixed timetable. A narrow, well-documented point can close within weeks. A wider enquiry involving several tax years, meetings or a formal notice can run for many months.

An enquiry ends with a closure notice, which either confirms no amendment is needed or sets out HMRC's revised view of the tax due. Under the Taxes Management Act 1970, you can apply to the tribunal to direct HMRC to issue a closure notice if the enquiry appears to be dragging on without good reason.

Keeping your own clear record of what was sent, when, and what remains outstanding puts you in a stronger position to press for closure once the substantive questions have been answered.

If the check reveals extra tax was due, HMRC can charge interest on the late payment and, separately, a behaviour-based penalty under Schedule 24 to the Finance Act 2007. Not every error leads to a penalty; a genuine, careless mistake made despite reasonable care can sometimes attract no penalty at all.

The penalty range depends on behaviour. Careless errors sit at the lower end; deliberate, and deliberate and concealed, behaviour sit much higher. Whether the disclosure was unprompted, made before you had reason to think HMRC was on to the issue, or prompted, made only once HMRC had already raised it, materially affects where within the range the final penalty lands.

Cooperating fully, telling HMRC everything relevant, helping quantify the position, and giving reasonable access to records are the practical levers that reduce a penalty within the statutory range. None of this changes a fixed percentage; it changes where in a stated range your case is likely to sit.

Even a straightforward enquiry generates professional fees: time spent reviewing records, drafting responses, attending meetings and negotiating with HMRC. A wider enquiry involving several tax years or a formal notice can generate significant costs over several months.

Fee protection, or tax investigation, insurance is designed to cover these professional costs so that defending yourself against an HMRC check does not become a separate financial burden on top of any tax ultimately found to be due. Growth plan clients receive free tax investigation insurance as standard, details of which are set out on our /fees page, so representation during a check does not carry a separate hourly bill.

Understanding this distinction matters: insurance covers the cost of dealing with HMRC properly, not any additional tax, interest or penalty that is genuinely owed once the enquiry concludes.

The most damaging mistake is silence: missing deadlines because the letter feels frightening rather than urgent. Penalties for non-compliance with a formal notice accrue regardless of your intentions.

Other frequent errors include volunteering opinions about intent or history that cannot be evidenced, sending disorganised bundles of documents, attending meetings unprepared, and assuming a phone call to HMRC satisfies a written statutory deadline. Recreating or backdating a missing record is a serious error that can turn a careless case into a deliberate one.

Equally, refusing every request on principle, without checking whether it is genuinely excessive, can escalate an informal check into a formal notice faster than cooperating within reasonable limits.

Consider a landlord who holds a single buy-to-let property through a special purpose vehicle company. HMRC opens a Corporation Tax enquiry after a mismatch between mortgage interest claimed and the company's declared borrowing, and proposes a meeting to discuss the figures.

The director checks the letter, confirms the enquiry is limited to interest relief for one accounting period, and asks HMRC for a written agenda before agreeing to any meeting. Rather than attending unprepared, the director appoints an accountant to review the loan agreements and interest calculations first.

Once the figures are reconciled and a short written explanation is sent covering the point directly, HMRC agrees the meeting is unnecessary and requests written confirmation instead. The enquiry closes with a minor adjustment and interest, but no penalty, reflecting a genuine, quickly corrected error rather than any deliberate understatement.