Self Assessment and HMRC Investigations: What to Know

Receiving a letter from HMRC saying they are investigating your tax return is unsettling, but it does not mean you have done anything wrong. Here is what you need to know.

What Triggers an Investigation

HMRC selects returns for investigation based on:

• Random selection — a small number of returns are checked at random
• Risk indicators — figures that look unusual compared to similar businesses
• Information from third parties — data from banks, platforms, or other taxpayers that does not match your return
• Significant changes — a large drop in income or increase in expenses compared to previous years
• Industry norms — if your profit margin is unusually low for your sector

Types of Investigation

Aspect enquiry: HMRC looks at one specific part of your return — perhaps a particular expense or income source. These are usually resolved quickly.

Full enquiry: HMRC reviews your entire return in detail. These are more time-consuming and thorough.

What to Expect

1. HMRC writes to inform you of the enquiry
2. They request specific records and information
3. You (or your accountant) provide the requested documentation
4. HMRC reviews and may ask follow-up questions
5. The enquiry is concluded — either with no change, an adjustment, or (rarely) penalties

How to Respond

• Stay calm. An investigation does not mean HMRC thinks you are a criminal.
• Respond promptly. Meet HMRC's deadlines for providing information.
• Keep it factual. Provide what is asked for, clearly and accurately.
• Involve your accountant. If you have one, let them handle the correspondence.
• Keep records. This is why record keeping matters — good records make investigations quick and painless.

Prevention

The best prevention is accurate, well-supported returns. Accounted keeps detailed digital records of every transaction, receipt, and categorisation — giving you confidence that your figures are correct and defensible.

Accounted handles your bookkeeping, tax estimates, and MTD submissions automatically. Start your free trial — no credit card required.