HMRC Enquiry Risk Checker.

HMRC selects returns for enquiry using a risk-scoring system called Connect, which cross-references data from banks, DVLA, Land Registry, social media, and other HMRC records. Common triggers include unexplained income drops, expense ratios out of line with industry norms, late filings, sector targeting (construction, hospitality, cash businesses), and random selection. Receiving a nudge letter is a strong indicator that HMRC has identified a discrepancy.

Appoint a professional adviser immediately — ideally a tax accountant or chartered tax adviser with enquiry experience. Do not reply directly to HMRC without advice. Gather all supporting records for the period under enquiry (bank statements, invoices, receipts, contracts). HMRC has extensive information-gathering powers, so transparency supported by good documentation is the best approach.

You have the right to be represented by an agent, to receive formal written notices before HMRC takes action, to appeal decisions you believe are wrong, and to apply to the Tax Tribunal if you cannot agree with HMRC. You also have the right not to be subjected to unnecessarily burdensome information requests — your adviser can challenge requests that are disproportionate.

Simple one-aspect enquiries (checking a specific item on your return) may conclude within 3 to 6 months if you respond promptly. Full investigations — often involving multiple tax years and complex issues — can take 2 to 5 years. Having a professional adviser and well-organised records significantly reduces the duration.

Yes, and it can substantially reduce penalties. HMRC's Worldwide Disclosure Facility (for offshore matters) and domestic disclosure facilities allow taxpayers to come forward proactively. Unprompted disclosures typically attract penalties of 0–30%, whereas prompted disclosures (after HMRC contact) are 15–30% or higher. Seek advice before making any disclosure.