HMRC Tax Investigations - Expert Defence From a Team With Inside Knowledge
HMRC Tax Investigations
If HMRC opens an enquiry into your tax return, you normally have 30 days to respond, and how you handle the first letter shapes the whole investigation. Our team includes a Chartered Tax Adviser who worked inside HMRC, so we know how Inspectors build cases, what they can and cannot ask for, and how to close enquiries quickly.
HMRC enquiry and investigation work is led by Hussein Bhaiji, our Managing Partner and a Chartered Tax Adviser.
An HMRC investigation is one of the most stressful experiences a business owner or individual can face. The process is designed to be intimidating, and without the right representation, it can result in significant financial penalties, reputational damage, and years of uncertainty. You can read HMRC’s official overview of tax compliance checks.
At Merit Accountants, we bring something to an HMRC investigation that most accountants simply cannot offer: first-hand knowledge of how HMRC operates, because our team includes professionals with direct HMRC work experience. We know how enquiries are structured, what HMRC officers look for, where investigations typically begin, and, crucially, when and how to challenge their position.
We know what HMRC can and cannot ask for. An information notice under Schedule 36 Finance Act 2008 can only require documents and information reasonably required to check your tax position, and many notices can be appealed or narrowed. We also know how to bring an enquiry to an end: where HMRC is dragging it out, you can apply to the tribunal under section 28A TMA 1970 for a direction that HMRC issue a closure notice.
If you are under investigation, or suspect you may be, contact us immediately.
Types Of HMRC Investigation We Handle
Our team handles the full range of HMRC enquiry and investigation types, including:
HMRC Self-Assessment Enquiries
Routine and full enquiries into personal or business self-assessment returns, including income discrepancies, property income, and undeclared earnings.
Corporation Tax Investigations
HMRC examination of company accounts, director’s loans, expense claims, and profit reporting.
VAT Investigations
VAT compliance checks, VAT fraud allegations, partial exemption disputes, and flat-rate scheme challenges.
PAYE & National Insurance Investigations
Compliance checks on payroll, off-payroll working (IR35), benefits in kind, and employment status disputes.
CIS (Construction Industry Scheme) Investigations
Deduction rate disputes, subcontractor status challenges, and gross payment status reviews.
Code of Practice 8 (CoP8)
Used where significant tax is at risk, usually in avoidance schemes or complex arrangements, and where HMRC does not suspect fraud. If HMRC’s view of the facts changes, a COP8 case can be moved to COP9, which is why the early framing matters.
Code of Practice 9 (CoP9)
The most serious form of HMRC investigation, used where fraud is suspected. It comes with the Contractual Disclosure Facility: 60 days to make an outline disclosure, in exchange for immunity from criminal prosecution for the conduct disclosed. Accepting, rejecting or ignoring that offer is the most important decision in the case and it cannot be undone. Do not respond to a COP9 letter without specialist representation.
Worldwide Disclosure Facility (WDF)
For clients with overseas income or assets that require voluntary disclosure to HMRC.
Why Having Worked Inside HMRC Gives You The Advantage
Most accountants approach an HMRC investigation as a compliance exercise, their goal is to resolve it as quickly as possible, even if that means conceding more than necessary. Our approach is fundamentally different.
Because a member of our team worked inside HMRC, we understand the investigative process from the inside. We know how officers are briefed, what their caseload pressures look like, what evidence they prioritise, and where their position may be challengeable. This intelligence shapes our strategy from the very first letter.
Our track record includes clients who had been told by previous advisers to accept HMRC’s position, and who, after coming to us, had their cases significantly reduced or fully overturned. We are not aggressive for its own sake. But we are thorough, evidence-led, and completely focused on protecting your financial interests.
What To Do If HMRC Contacts You
If you receive an HMRC compliance check or investigation letter, do not respond until you have spoken to a specialist. The initial response to HMRC is often the most important step in the entire process, and getting it wrong can significantly narrow your options.
Contact Merit Accountants immediately. We will review the letter, assess the nature and scope of the enquiry, advise on your rights and obligations, and, where appropriate, take over all communication with HMRC on your behalf from that point forward.
HMRC Enquiry Cover
Every client should have enquiry cover in place, and ours is included rather than sold to you. We hold a policy that meets our own professional fees where HMRC opens an enquiry into a client, so if you are selected we defend it properly without the bill that usually comes with it. It is not an insurance policy in your name and it does not cover any tax, interest or penalties HMRC decides you owe. It covers the work of dealing with them.
HMRC Nudge Letters
Nudge letters have become one of HMRC’s main tools. They arrive because HMRC holds data suggesting something in your return may be incomplete: information from overseas tax authorities, from banks, from letting platforms or from online marketplaces.
A nudge letter is not an enquiry, which means you have a window a formal enquiry does not give you. Reviewing the position and making a voluntary disclosure where something is genuinely wrong usually produces a far better outcome than waiting to see whether HMRC escalates. Responding badly, or not at all, tends to guarantee that it does.
How Far Back Can HMRC Go?
The time limits depend on HMRC’s view of behaviour, which is why that question is worth contesting early.
- Four years where the return was made with reasonable care
- Six years where there was carelessness. Twelve years where the matter involves offshore income, assets or transfers
- Twenty years where the behaviour was deliberate
The difference between careless and deliberate is not just years of exposure. It changes the penalty range substantially and it determines whether a case can move onto a criminal footing. Having somebody who has worked inside HMRC matters most at exactly this point, because the framing established early in an enquiry tends to hold.
Get Expert HMRC Investigation Support Now
Don’t wait. Every response you give to HMRC before specialist representation is in place shapes the direction of the investigation. Call us today or book a confidential consultation.
Manchester: 0161 303 0610 | London: 020 4534 7857 | Hertfordshire: 020 4635 9882
HMRC Tax Investigations FAQs
Seek professional advice as early as possible, ideally before you respond. The way an enquiry is handled from the very first letter can shape the entire outcome, and having worked inside HMRC, we know how to frame that response correctly.
Not necessarily. Enquiries arise for many reasons: routine checks, risk profiling, or a specific area of interest. It should be taken seriously, but it doesn’t automatically mean anything is wrong.
Yes. We can take over correspondence with HMRC, prepare and present responses, review your records, and support you throughout the process, so you’re not facing it alone.
Yes. If something needs to be disclosed, we advise on the best route, help quantify the position, and manage communications with HMRC, including the Worldwide Disclosure Facility where overseas income or assets are involved.
It depends on the complexity, the quality of your records and how quickly information is provided. Some resolve quickly; others take longer. Our job is to manage the process carefully and work towards the best possible outcome.
Normally four years. That extends to six years where carelessness is involved, and up to twenty years in cases of deliberate behaviour. Which applies is often the most important question in the whole enquiry, and it is worth arguing properly rather than conceding early.
A letter from HMRC suggesting you check something in your tax affairs, based on data they hold from banks, overseas tax authorities or online platforms. It is not a formal enquiry, but ignoring one usually leads to one.
Often a much reduced one. Penalties are calculated on behaviour and on whether the disclosure was prompted or unprompted. Coming forward before HMRC contacts you can reduce a penalty substantially and sometimes to nil.