Nobody likes it when a brown envelope from the Revenue drops through their letterbox.

Even if you have all your tax affairs in order, HMRC could still randomly select you after upping its game in recent years to crack down on falsely reporting or underpaying tax.

There are steps you can take to ensure you or your business stays off the Revenue’s radar, and the golden rules are to keep accurate records for us to process and put cash aside to pay your tax bill.


What triggers an HMRC investigation?

If you’re a business owner, submitting an unusually large VAT claim or reporting a low amount of tax is likely to set alarm bells ringing.

Routinely taking cash payments from customers or operating in a sector HMRC has specifically targeted could also trigger an investigation.

The Revenue will also sit up and take notice if you consistently file late tax returns or if they contain major inconsistencies, while it also accepts random tip-offs.


What’s the process of an HMRC investigation?

HMRC will write to you or call you with a query over your accounts, at which point you’ll usually be required to submit information to assist with their inquiry.

Once it has all of the records it needs, the Revenue will start its probe and the outcome depends on what it finds.

The most common outcomes include verdicts of underpaid or overpaid tax or deliberate wrongdoing.

You will usually have a chance to settle the debt, but penalties and potential criminal proceedings may apply if you fail to do so or in the most extreme cases.


What are the stages of an HMRC investigation?

There are 3 levels of inquiry – random, aspect and full.

Random inquiries do exactly what they say on the tin as HMRC can investigate you or your business entirely at random, and often on the back of a tip-off.

Aspect inquiries usually relate to misunderstanding or genuine mistakes that the Revenue wants more detail on, although these can be upgraded to full inquiries.

If HMRC believes there’s a significant risk of error in a tax return, you can be subjected to a comprehensive review of your records as part of a full inquiry.


Get in touch

If you receive a brown letter through the post, don’t panic. We’re happy to liaise with HMRC on your behalf. We will find out the severity of the inquiry and the information required by the Revenue to resolve its investigation.

For more information on how we can help, call on us 0141 221 2257 or email us on