HMRC Compliance Check Letter: What It Means and What to Do

What a compliance check is

HMRC runs checks to confirm returns are accurate. A check can be a simple question about one figure or a more detailed review of your records. It does not mean you have done anything wrong.

Types of letters

You might receive an informal enquiry, a formal enquiry into a return, or a letter asking you to check and correct a return. Each type has different rights and time limits, so read it carefully.

How to respond

Note the deadline, gather the specific records requested, and reply in writing keeping copies. Do not send unrelated documents. If you spot a mistake, say so and correct it voluntarily, which usually reduces penalties.

When to get help

Ask an accountant if the letter mentions a formal enquiry, large sums, penalties or several tax years. Professional help can keep the check focused and calm.

Understanding what a compliance check is

A compliance check is HMRC asking you to explain or evidence something on a tax return or in your tax affairs. It can be a simple request for a few documents, a more detailed review of a year’s records, or a formal enquiry into a return. Receiving one does not mean you have done something wrong. Checks can be triggered by random selection, by mismatches with information HMRC holds from banks, employers and other third parties, or by figures that look out of line with your sector.

There are time limits. HMRC can normally open an enquiry into a return within 12 months of the date you filed it. If tax has been missed, a discovery assessment can go back 4 years for ordinary errors, 6 years where there has been carelessness and 20 years where behaviour was deliberate. This is why keeping records for five years after the 31 January filing deadline is a minimum, and why some people keep them longer. See our guide on how long to keep tax records.

Step-by-step: how to respond

1. Read the letter carefully. Note the tax year, the specific questions, the documents requested and the reply date. The letter sets the deadline.
2. Do not ignore it. If you need more time, ask HMRC before the deadline and give a reason.
3. Gather evidence. Bank statements, invoices, receipts, contracts, payslips and working papers for the year concerned.
4. Answer exactly what is asked. Be accurate, clear and brief, and send copies rather than originals.
5. Keep a record. Keep a copy of your reply, the date sent and the method used.
6. Correct genuine errors promptly. If you find a mistake, tell HMRC and pay what is due, because voluntary disclosure usually leads to a better outcome than waiting to be found.

Our HMRC letters explained guide helps you tell the different types of letter apart, and nudge letters about undeclared income are a separate and softer type of contact.

Worked example: reconciling a bank mismatch

This is an illustrative example. A landlord reported rent of £7,200 for the year (£600 a month × 12). HMRC’s letter notes that her bank account received £9,600 of credits, and asks her to explain the £2,400 difference.

Because the £1,500 gift and the £900 furniture sale are not rental income and she has evidence, no tax is due. Suppose instead that £900 was extra rent she had forgotten. At the basic rate of 20% the extra tax would be £900 × 20% = £180, plus interest from the original due date, with any penalty depending on how HMRC views the behaviour. Check current HMRC guidance for how penalties are calculated.

Common mistakes when responding to HMRC

• Ignoring the letter or missing the reply date, which can escalate the check.
• Sending far more paper than was asked, which can open new lines of questioning.
• Guessing at answers instead of checking the records.
• Sending original documents with no copy kept.
• Offering opinions about HMRC or the tax system rather than facts.
• Failing to take advice where the check is complex or long-running.

Checklist for a compliance check

1. Log the letter’s date, reference and deadline.
2. Identify the tax year and the return in question.
3. Collect and index supporting records.
4. Draft a clear reply and have someone review it.
5. Send it by a traceable method and keep proof.
6. Diary any follow-up dates.

It can help to have a qualified accountant deal with HMRC for you. SATR offers a fixed fee from £199 + VAT for preparing and filing returns online with qualified UK accountants, and good records at that stage make any later check much easier. Our Self Assessment for sole traders page explains what we do, and enquiry representation can be discussed separately.

This is general information, not personal tax advice.

Preparing in advance so a check is less stressful

The best protection is a tidy set of records kept as you go. Save invoices and receipts digitally, label bank transactions as you reconcile them, and keep a short note of any unusual one-off item, such as a loan, a gift or the sale of a personal asset. If a letter ever arrives, you will then be able to answer in days rather than weeks.

It also helps to keep a copy of each filed return and its supporting workings together in one folder for each tax year. Where you have used estimates, note how you reached them. If you have made a mistake in the past, you can amend a return within 12 months of the 31 January deadline, and for older years you can contact HMRC to correct it, so it is better to act early than to wait for a letter to arrive.

Frequently asked questions

How long can HMRC look back?

Usually 4 years for honest mistakes, 6 years for carelessness and up to 20 years for deliberate errors.

Do I have to attend a meeting?

Not always. Many checks are handled by letter or phone, and you can have an adviser attend with you.

Tax rules and rates change. Figures here reflect 2025/26 guidance; always check current HMRC rules or ask us before acting.

How long does a compliance check take?

It varies. Simple document requests can be resolved quickly, while formal enquiries can run for months. Your reply and the complexity of the records both affect the timing.

Can HMRC check a return after the 12 month enquiry window?

Not by opening a normal enquiry, but a discovery assessment can still be raised for 4, 6 or 20 years depending on the behaviour involved.

Should I tell HMRC about an error I find while replying?

Yes. Telling HMRC promptly and paying any tax due generally leads to a better outcome than leaving the error to be found.

Related guides

• Self Assessment Deadline 31 January 2027: Preparation Plan
• What to Do If HMRC Opens an Enquiry Into Your Tax Return
• How to Claim a Self Assessment Tax Refund
• penalty appeals