HMRC Tax Queries & Enquiries: How We Can Help
By Sardar Muhammad, AAT • • 9 min read
📋 If You Have a Letter in Front of You
- Do not ignore it. Most letters have a 30-day response deadline.
- Check whether it is a simple request for information, a compliance check, or a formal enquiry.
- Do not send records or write back until you understand exactly what is being asked.
- An authorised accountant can reply on your behalf – often the quickest way to close it out.
Why HMRC Gets in Touch
An HMRC letter is not automatically bad news. HMRC contacts taxpayers for many routine reasons, most of which are resolved with a short written response. The key is understanding which type of contact you have received, because each one has different rules and different risks.
The Main Types of HMRC Contact
📨 Simple Information Request
HMRC asks for clarification on one figure – often income reported by a third party (employer, bank, platform) that does not match your return. Usually resolved by sending the supporting document or correcting a typo.
🔍 Compliance Check (Aspect Enquiry)
HMRC reviews one part of a return – for example, mileage claims, rental expenses, or cash takings. The officer will ask for records covering that area specifically.
📂 Full Enquiry
The entire return is under review. HMRC can ask for books, bank statements, contracts, and explanations for any figure. These take longer and carry higher penalty exposure if errors are found.
💷 Penalty or Determination Notice
A figure has already been set by HMRC – usually because a return was late or not filed. These have tight appeal deadlines (typically 30 days) and should not be left unanswered.
⚠️ Code of Practice 9 (COP9) / Contractual Disclosure Facility
The most serious type of civil investigation, used where HMRC suspects deliberate behaviour. Specialist representation is essential from day one.
What Triggers a Query?
HMRC receives data from a very wide range of sources and matches it against returns automatically. Common triggers include:
- Third-party data mismatches – wages, pensions, bank interest, dividends, rental income reported by platforms (Airbnb, Uber, eBay, Vinted).
- Unusual year-on-year movements – a profit that suddenly drops, or expenses that jump without explanation.
- Round-figure or estimated entries – returns that look reconstructed rather than recorded.
- Industry risk profiles – cash-heavy trades and sectors HMRC is actively reviewing.
- Random selection – a small proportion of enquiries are genuinely random.
Whatever the trigger, the response process is broadly the same. The quality of the reply usually determines whether the matter closes quickly or escalates.
How I Handle a Query
When a client forwards me an HMRC letter, I work through a structured process:
- Read the letter properly – identify the reference, the legislation cited, the specific questions, and the exact deadline.
- Secure a 64-8 authorisation – so I can deal with HMRC directly and they stop contacting you.
- Acknowledge within the deadline – even if the full reply needs more time, a holding response preserves your position.
- Review the underlying records – identify whether the return is defensible as filed, or whether a correction is needed.
- Respond in writing, concisely – answer only what is asked, with supporting documents attached. Nothing extra.
- Negotiate where appropriate – on penalty reductions (disclosure, co-operation, reasonable excuse), time-to-pay arrangements, or alternative treatment.
- Obtain formal closure – either a closure notice confirming no change, or an agreed contract settlement.
Common Mistakes to Avoid
| Mistake | Why It Hurts |
|---|---|
| Ignoring the letter | Leads to determinations, penalties, and harder negotiation later. |
| Phoning HMRC without records in front of you | Off-the-cuff answers get noted and are very hard to retract. |
| Sending everything you have | Widens the enquiry into areas HMRC had not originally asked about. |
| Guessing figures under pressure | Inaccurate replies undermine credibility for the rest of the enquiry. |
| Admitting "deliberate" behaviour loosely | Moves penalties from careless (up to 30%) to deliberate (up to 100%) and extends the time HMRC can look back to 20 years. |
Penalties – And How They Can Be Reduced
Where a return needs correcting, penalties are calculated as a percentage of the extra tax due. The range depends on the behaviour:
- Reasonable care: no penalty.
- Careless: 0% to 30%.
- Deliberate: 20% to 70%.
- Deliberate and concealed: 30% to 100% (higher for offshore).
Within each band, HMRC gives reductions for telling, helping and giving access – essentially, for co-operating properly. A well-handled disclosure often moves the penalty close to the bottom of its band; a hostile or incomplete one keeps it near the top. This is one of the clearest areas where good representation pays for itself.
When to Bring an Accountant In
Some queries are simple enough to handle yourself – a request for a P60 or a confirmation of a reported figure. Others really do benefit from representation. Consider getting help if:
- The letter references a specific part of a return and asks for records.
- There is any possibility that the return is wrong.
- You do not fully understand the legislation being cited.
- You have already exchanged letters and the enquiry is not closing.
- Penalties, determinations, or time-to-pay are on the table.
- It is a COP9 or fraud-related contact – in which case specialist help is essential immediately.
Prevention Is Cheaper Than Defence
Most enquiries I see come from returns that were correct but looked thin – rounded figures, missing narrative, obvious gaps against third-party data. The same return prepared with proper supporting records and clear apportionments rarely attracts the same attention. This is the practical reason detailed, well-documented returns are worth the effort, even before you think about the lower tax bill.
Frequently Asked Questions
What is an HMRC compliance check?
A compliance check is HMRC's review of some or all of a tax return, or of the records behind it. It may look at a single entry (an aspect enquiry) or the whole return (a full enquiry). HMRC can ask for documents, explanations and, in some cases, meetings.
How long do I have to respond to an HMRC letter?
Most HMRC letters ask for a response within 30 days from the date of the letter. If you need more time to gather records or instruct an accountant, request an extension in writing before the deadline rather than ignoring it.
Can an accountant deal with HMRC on my behalf?
Yes. Once you sign a 64-8 authorisation or add an agent link through your Personal Tax Account, your accountant can correspond with HMRC, submit information, attend calls and negotiate settlements for you.
What happens if I ignore an HMRC letter?
HMRC can issue formal information notices, determine the tax due themselves (usually at the higher end of the range), and charge penalties of up to 100% of the tax – more where offshore matters or deliberate behaviour are involved. Ignoring letters almost always makes the final outcome worse.
Received a Letter From HMRC?
Send it over and I will tell you exactly what it means and what needs to be done. I represent clients across Glasgow and Scotland on routine queries, compliance checks and full enquiries.
Sardar Muhammad, AAT Certified
Sardar is an AAT certified accountant and founder of LimeTree Accounting Solutions in Glasgow. He handles HMRC correspondence, compliance checks and enquiries on behalf of clients across Scotland.