When HM Revenue and Customs (HMRC) opens an enquiry into a tax return, it is essential to understand the type of enquiry being conducted, what HMRC is legally entitled to request, and how to respond in a way that protects your position.

Types of HMRC Enquiries

HMRC typically conducts one of the following:

Full Enquiry

A comprehensive review of the entire tax return. This is usually opened where HMRC suspects significant errors or inconsistencies.

Aspect Enquiry

A targeted review focusing on specific entries or areas of concern within the return.

Identifying the type of enquiry at the outset is important. It allows you to prepare a response that is proportionate and properly focused.

First Steps After Receiving an Enquiry Notice

If you receive an enquiry notice, take the following steps:

• Check validity – Confirm that HMRC has opened the enquiry within the statutory time limits and is acting within its legal powers.

• Review the scope – Establish exactly what HMRC is questioning.

• Gather documentation – Collect relevant tax returns, accounts, bank statements, invoices, and supporting records.

• Seek professional advice – Experienced advisers can manage communications and safeguard your position.

• Respond carefully – Provide clear, factual answers to the specific questions asked. Avoid volunteering unnecessary information.

• Manage deadlines – Maintain open communication with the case officer and agree realistic response timeframes where needed.

Early organisation and measured responses are critical.

Common Information Requests

HMRC may request:

• Business accounts and financial records

• Business and personal bank statements

• Invoices and supporting receipts

• Details of assets, liabilities, and investments

• Information relating to offshore income or foreign transactions

If information is not provided voluntarily, HMRC may issue a formal information notice under its statutory powers. Failure to comply can result in penalties, particularly if additional tax liabilities are later identified and cooperation is considered insufficient.

Cooperating While Protecting Your Rights

Although cooperation is important, taxpayers are entitled to ensure that:

• Requests are reasonable and proportionate

• Unclear or overly broad requests are clarified

• Disclosures are limited to what is legally required

• Formal information notices are challenged where appropriate

The key legal test is whether the information requested is reasonably required to check the taxpayer’s tax position.

Meetings with HMRC – Are They Mandatory?

In most cases, there is no statutory requirement to attend a meeting with HMRC.

Requests for meetings should be considered carefully. Written correspondence often allows for more measured and precise responses. After a meeting, HMRC will usually issue notes and may request that they are signed. There is no legal obligation to sign these notes, although any inaccuracies should be formally corrected in writing.

This should be distinguished from formal inspection visits, which HMRC may conduct under specific statutory powers.

Possible Outcomes of an Enquiry

An enquiry may conclude with:

• No further action

• Amendments to the return and additional tax assessments

• Penalties for careless or deliberate behaviour

• Escalation to a more serious investigation

The outcome often depends on the quality of records maintained and the manner in which the enquiry is handled.

Minimising the Risk of an Enquiry

While enquiries cannot always be avoided, the risk can be reduced by:

• Maintaining accurate and organised records

• Filing tax returns correctly and on time

• Seeking professional advice on complex matters

• Properly documenting large or unusual transactions

• Responding promptly and reasonably to HMRC correspondence

Good compliance practices significantly reduce scrutiny.

How Oasis Accountants Can Support You

If you are facing an HMRC enquiry, or want to reduce the risk of one, early professional advice is essential.

At Oasis Accountants, we provide strategic and practical representation throughout the enquiry process. Our role is to ensure full compliance while protecting your rights and commercial position.

Our Services Include:

• Reviewing the validity and scope of HMRC enquiries

• Managing all correspondence with HMRC on your behalf

• Preparing structured and fully supported responses

• Challenging unreasonable or disproportionate requests

• Advising on meetings and formal information notices

• Negotiating settlements and mitigating penalties where appropriate

We understand that an enquiry can be stressful and time-consuming. Our experienced team works to minimise disruption, manage risk effectively, and secure the most efficient resolution possible.