HMRC Enquiries and Compliance Checks

Although a small number of HMRC enquiries and compliance checks are started on a random basis, in the vast majority of cases taxpayers are selected for a reason (either on the basis of specific information held by HMRC or a risk-based assessment).  HMRC do not have to give their reasons for starting an enquiry or compliance check, and the reasons may not always be obvious.

If you have been notified of an enquiry or compliance check, or are otherwise concerned that you may be targeted by HMRC, we can help identify potential issues to ensure that you are properly prepared.

For tax return enquiries, HMRC must generally give written notice within 12 months after the tax return was filed (although different time limits will apply where returns are filed late or subsequently amended).

If HMRC are out of time to open an enquiry, they may still be able to raise a tax assessment within certain time limits – broadly, four years from the end of the relevant tax year, with longer time limits applicable in certain circumstances, such as cases involving careless behaviour (six years) or deliberate behaviour (20 years).

Other types of compliance checks are not subject to the same procedural rules as enquiries but time limits will still apply for HMRC to raise assessments.  For VAT, the time limit is generally four years (or 20 years for cases involving deliberate behaviour).

Our team has experience challenging HMRC where they fail to meet the strict statutory conditions for issuing notices of enquiry or raising assessments.  If you receive a notice or assessment, please contact us as soon as possible so that we can help protect your position.

HMRC will invariably ask for various pieces of information and copies of documents relevant to their investigation, and they have powers to compel the sharing of information and documents in certain circumstances.

The key for any taxpayer under investigation will be to strike the right balance between protecting themselves and being seen to cooperate with HMRC.  Our specialists can help clients respond effectively to investigations and challenge HMRC where appropriate.

For further information on HMRC’s civil information powers, please click here.

There is no specific time limit for HMRC to conclude an enquiry or compliance check, meaning this is often a key area of disagreement between taxpayers and HMRC.

Protracted investigations can be both disruptive and expensive.  Our specialists can help clients bring matters to a close, either through engagement with HMRC or, where appropriate, through the courts.