HMRC tax investigation help when the letter arrives
An HMRC letter is worrying, but it is not a verdict. Many enquiries close with no change, or with a small adjustment. What makes things worse is a rushed reply, a missed deadline or a pile of documents sent without anyone checking what is in them.
Note the reply date and send us a copy before you respond. We will tell you what type of check it is and what HMRC is entitled to ask for. If the time allowed is too short to pull records together, we can ask HMRC for more time before the deadline passes.
Getting HMRC tax investigation help early costs less than repairing a reply that has already gone. It also means the first thing HMRC sees from you is calm, complete and on time.
Working out what kind of check it is
An aspect enquiry looks at one part of a return, such as a large expense or a property sale. A full enquiry covers the whole return and the records behind it. Businesses can also face VAT inspections, employer checks on payroll and benefits, and CIS reviews if they work in construction.
A nudge letter is different. It is not a formal enquiry, but it tells you HMRC holds information suggesting something may be missing, often rent, overseas income or online sales. Serious cases follow formal codes of practice. Code of Practice 8 is used for complex avoidance. Code of Practice 9 is used where HMRC suspects fraud, and anyone who receives one needs specialist advice straight away.
What is included
- Reviewing HMRC letters and explaining what they mean
- Acting as your agent in all contact with HMRC
- Requesting more time where needed
- Preparing replies and supporting evidence
- Checking tax, interest and penalty calculations
- Voluntary disclosures, including the Let Property Campaign
- Help with payment plans and appeals
- Preparing you for and attending any meeting
How far back HMRC can go
For a self assessment return filed on time, HMRC normally has 12 months from the filing date to open an enquiry. After that window closes, it can still assess extra tax if it discovers that tax was lost. The time limit for that depends on behaviour.
- Tax lost despite reasonable care: normally 4 years
- Tax lost through carelessness: up to 6 years
- Tax lost deliberately: up to 20 years
How penalties are worked out
If you took reasonable care and still got something wrong, there is normally no penalty for the error. Careless and deliberate errors are different. HMRC sets a penalty range for each, and where you land within it depends largely on how much you tell and how much you help.
Disclosure is the key. If you tell HMRC about a careless error before it has any reason to think something is wrong, the penalty can be reduced to nothing. Once HMRC has started asking, the minimum for a careless error is 15%. For deliberate errors the minimum is 20% if you come forward unprompted and 35% if you wait. Interest is charged on late tax on top of any penalty. If you disagree with a decision, you usually have 30 days from the decision letter to appeal or accept a review.
Putting things right before HMRC asks
HMRC runs specific routes for coming forward. Landlords with undeclared rent can use the Let Property Campaign. People with income or gains abroad can use the Worldwide Disclosure Facility. Other untaxed income goes through the general digital disclosure service.
Around Watford, two situations come up again and again when people ask for HMRC tax investigation help. One is a flat near Watford Junction or in Oxhey that was let out for a few years without a tax return. The other is film and TV crew from the studios at Leavesden who were paid partly through payroll and partly as self employed, and never reported the self employed part. A UK residential property sale with tax to pay also has to be reported and paid within 60 days of completion, and that rule is still missed surprisingly often.
Our approach to an enquiry
Once you authorise us as your agent, HMRC writes to us rather than to you. We review your records before anything goes to HMRC, so we know where the weak points are and can explain them properly. Then we answer what HMRC has asked, in order and with evidence, and push back politely where a request goes further than the law allows.
If tax is due, we check that the figure and any penalty are right before you agree to anything. Where paying in one go is not possible, HMRC may agree a payment plan if it is affordable. Our HMRC tax investigation help covers clients in Watford, Harrow, Stanmore and across Hertfordshire, mostly online. Fees are fixed and agreed before any work starts, after a free review of the letter and your records.
Records worth gathering now
Pull together the paperwork behind the figures HMRC is looking at, and keep everything once an enquiry starts. If records are missing, tell us early. There are accepted ways to rebuild figures from bank statements.
- Every letter from HMRC about this matter
- The return being checked
- Bank statements for the period
- Invoices, receipts and agent statements
- Notes of loans, gifts or transfers between accounts
Who this suits
- People who have received an HMRC enquiry or nudge letter
- Landlords with rent that was never declared
- Freelancers with income that was missed off returns
- Businesses facing a VAT, payroll or CIS check
- Anyone with untaxed income from abroad
Common questions
HMRC says it is checking my tax return. Does that mean I have done something wrong?
Not necessarily. Some checks are random and many are triggered by a figure that looks unusual. Plenty close with no change. The key is to reply accurately and on time.
How many years can HMRC look back?
Normally 4 years. That rises to 6 years if the error was careless and up to 20 years if it was deliberate. This is why the reason behind a mistake matters so much.
What is a Code of Practice 9 letter?
It means HMRC suspects fraud. It offers the chance to make a full disclosure under a contractual arrangement. It is serious, and you should get specialist advice before responding.
Will my penalty be lower if I own up before HMRC finds out?
Usually much lower. For a careless error disclosed before HMRC has any reason to suspect it, the penalty can be reduced to nothing. Once HMRC has started asking, minimum penalties are higher.
I cannot afford what HMRC says I owe. What can I do?
You can ask HMRC for a payment plan to spread the cost. HMRC checks whether the plan is affordable. We also check the amount itself, because calculations and penalties are not always right.
Can I appeal if I disagree with HMRC?
Yes. You usually have 30 days from the date of the decision letter to appeal or accept a review. Missing that window makes things harder, so act quickly.
Should I contact HMRC myself to explain?
It is usually better not to. Answers given on the spot can be hard to correct later. Once we are your agent, HMRC contacts us and we reply in writing with the right evidence.