Most people feel a bit of panic when an HMRC letter lands. But not every letter from HMRC is serious. Some are routine reminders. Others are requests for information. A few open a formal enquiry.
The type of letter tells you how quickly you need to act. To understand what may have put you on HMRC’s radar, read our guide on what triggers an HMRC investigation.
Disclaimer: This article is for general information only. It doesn’t constitute tax or legal advice. If you’re unsure about any correspondence from HMRC, take professional advice before responding.
Is every HMRC letter the start of an investigation?
No. Most HMRC letters are routine: reminders to file, confirmation of payments received, updates to your tax code, or notices about changes to the tax system. A formal enquiry is a specific type of letter and HMRC is required by law to open one within certain time limits. If you receive a letter that opens a formal enquiry, it will say so clearly.
Routine letters you don’t need to panic about include:
- SA300/SA316, reminder that your Self Assessment return is due
- P800, year-end tax calculation showing whether you’ve overpaid or underpaid
- PAYE coding notices, adjustments to your tax code
- Payment reminders for a known bill
- Information about changes to tax rules
Letters that need attention:
- Notice of enquiry (under Section 9A or Schedule 1A TMA 1970), a formal opening of a check into your return
- COP9, a serious fraud investigation using a special procedure
- A request for information or documents
- A tax calculation showing you owe more than expected
What types of HMRC letters should you be concerned about?
Any letter that opens a formal enquiry or requests records and documents needs a response. Ignoring these letters doesn’t make them go away, it escalates the situation and can result in larger penalties. The most important rule: read the letter carefully to understand what HMRC is asking for and by when.
Notice of enquiry. This formally opens a compliance check into your tax return. HMRC can open an aspect enquiry (looking at one specific part of your return) or a full enquiry (covering everything). The letter will specify the scope.
Request for information. HMRC may ask you to provide records, bank statements, invoices, expense receipts, to support figures you’ve declared. This isn’t always a sign of suspected fraud. It can be a routine check.
Determination or assessment. If HMRC believes you owe tax and you haven’t filed, it can raise an assessment of what it thinks you owe. This creates a formal debt unless you challenge it.
Penalty notice. Penalties for late filing or late payment come by letter. They’re automatically generated and often apply even where HMRC has no other concerns about your affairs.
What should you do first when you receive an HMRC letter?
Read the letter in full before doing anything else. Identify: what type of letter it is, what HMRC is asking for (if anything), the deadline for any response, and a reference number. Then decide whether you can respond yourself or whether you need professional help.
Steps to take immediately:
- Read the letter completely, don’t stop at the first scary phrase
- Note the reference number and the date of the letter
- Identify the deadline (if a response is required)
- Check whether it’s asking you to do something or just informing you of something
- Don’t call HMRC until you understand what the letter is about
If it’s a routine reminder or information letter, you may not need to do anything except take note.
If it opens a formal enquiry or asks for documents, don’t respond without professional advice unless you’re entirely confident in what you’re providing.
When should you get an accountant involved?
Get an accountant involved immediately if the letter opens a formal enquiry, requests records and documents going back more than one year, references a fraud investigation (COP9), or comes alongside a demand for a significant amount of tax you weren’t expecting. Early involvement gives you more options and usually costs less in the long run.
A common mistake is waiting to respond, thinking more time helps. Deadlines in HMRC enquiry letters are real. Missing them often increases your exposure.
Another common mistake is responding without understanding the full picture. What you say in early correspondence can shape the whole investigation. A specialist accountant can help you respond accurately without inadvertently making things worse.
Getting HMRC tax investigation support from an accountant early doesn’t signal guilt, it signals that you’re taking the matter seriously.
What if the letter says you owe tax you don’t think you owe?
Don’t pay it immediately if you believe it’s wrong. You have the right to query an HMRC assessment or calculation. Contact HMRC with your grounds for disagreement. If HMRC has raised a formal assessment, you can appeal a tax decision within 30 days.
Check that the letter actually relates to your tax affairs, letter fraud impersonating HMRC is a known scam. HMRC will never ask you to pay via bank transfer to an unfamiliar account, and it won’t threaten immediate arrest in a letter.
You can verify whether correspondence is genuinely from HMRC by using HMRC’s official contact channels. If you suspect fraud, you can report it to HMRC directly.
What if the letter is about undeclared income or tax avoidance?
If HMRC is contacting you about income you haven’t declared, take advice before responding. Voluntary disclosure, coming forward and correcting your position, generally results in lower penalties than HMRC finding errors itself.
Do not destroy records. Once an enquiry opens, you have legal obligations around record retention.
DASA can handle HMRC correspondence on your behalf
If you’ve received a letter you’re unsure about, bring it to us. We deal with HMRC correspondence and enquiries regularly. We’ll tell you what type of letter it is, whether you need to respond, and what to say.
Get a quote and we’ll send you our current pricing, DASA’s HMRC investigation service.