Insight
Received an HMRC enquiry letter? Your first three steps
An HMRC enquiry letter is not an accusation, but it does start a clock. What to do in the first days, and what not to do.
11/08/2026
A brown envelope from HMRC opening an enquiry into your tax return is unsettling, but it is not a finding that anything is wrong. HMRC opens enquiries for many reasons, including entirely random selection. What matters is how you handle the first fortnight.
Step one: identify exactly what you have received Not every HMRC letter is a formal enquiry, and the differences matter.
A "nudge" or one-to-many letter invites you to check something — offshore income, rental profits, cryptoasset disposals — and is not a formal enquiry. It still deserves a considered response, because ignoring it commonly leads to one.
A formal enquiry into an individual's Self Assessment return is opened under section 9A of the Taxes Management Act 1970. For a company tax return it is paragraph 24 of Schedule 18 to the Finance Act 1998. HMRC normally has 12 months from the date the return was filed to open an enquiry; outside that window it must instead use a discovery assessment, which has conditions HMRC has to satisfy.
A Code of Practice 8 letter signals a serious enquiry where HMRC suspects a significant loss of tax but not fraud.
A Code of Practice 9 letter offers the Contractual Disclosure Facility, and is used where HMRC suspects deliberate conduct. This is the most serious civil route, it carries a strict 60-day response window, and it should never be answered without specialist representation.
There are also information notices under Schedule 36 to the Finance Act 2008, which compel the production of documents and carry penalties for non-compliance, and VAT or employer compliance checks with their own procedures.
Write the type of letter, its date and every deadline it contains on the front of the file before you do anything else.
Step two: protect your records and stop the position getting worse Gather and preserve everything relevant to the year and the issue under review: bank statements, invoices, contracts, mileage and expense records, accounting files, correspondence with your accountant. Do not create, amend, backdate or tidy anything. An honest gap in records is a routine problem; an altered document changes the character of the case entirely and can turn a civil enquiry into a criminal one.
At the same time, look forward. If the same treatment applied in later returns is questionable, you need advice before filing again on the same basis. And if your own review shows there is an error, that is not a disaster — an unprompted or promptly co-operative disclosure attracts substantially lower penalties than one HMRC has to extract. Penalties under Schedule 24 to the Finance Act 2007 are driven by behaviour: a reasonable mistake can carry no penalty at all, careless behaviour a lower range, deliberate and concealed conduct a much higher one, with meaningful reductions for telling, helping and giving access.
Step three: respond through a representative, and respond to what was actually asked Do not telephone HMRC to explain, and do not send everything you have. Both go wrong in the same way: unfocused material and off-the-cuff explanations create new questions, and anything you say becomes part of the record.
Instead, appoint an adviser and have the response prepared in writing. A good reply does three things: it answers precisely the questions asked, it supplies the documents HMRC is legally entitled to, and it declines politely and with reasons anything outside the scope of the enquiry or outside the statutory power. HMRC can ask for anything; it can only compel what the legislation allows. If a deadline is unrealistic, ask for an extension in writing before it expires — HMRC usually agrees to a reasonable request made in advance and rarely to one made afterwards.
What happens next Most enquiries proceed by correspondence and sometimes a meeting. Meetings are voluntary in civil enquiries; if you attend, go with your adviser and agree a written note of what was said. An enquiry ends with a closure notice stating HMRC's conclusions and any amendment to your return. If you disagree, you have 30 days to appeal, and you can ask for an independent statutory review by an HMRC officer not previously involved, try Alternative Dispute Resolution, or take the matter to the First-tier Tribunal (Tax Chamber). Tax charged is generally payable unless you apply to postpone it, so deal with postponement at the same time as the appeal.
A short checklist for the first week Identify the letter type and the statutory power behind it. Diarise every deadline. Preserve records and change nothing. Review the point at issue honestly with an adviser. Decide whether a disclosure is appropriate. Reply in writing, in scope, on time.
Enquiries handled this way usually close faster, cost less and end better than those handled by improvisation.
This article is general information about the law and HMRC practice in the United Kingdom and is not tax or legal advice for your circumstances. Time limits are strict; take advice on your own position promptly.
This page provides general information and does not constitute legal advice. Law and policy may change, and the appropriate approach depends on individual circumstances. Read the full disclaimer.