Receiving an HMRC compliance check letter

An HMRC compliance check letter should be read promptly to identify the taxpayer, tax, period, questions and response date. Verify the correspondence through a trusted route and preserve the original before gathering records or making a substantive reply.

A check does not automatically establish wrongdoing. Equally, ignoring it can create avoidable problems, so allocate a responsible contact and obtain advice where the request is unclear or significant.

Identify what the opening letter actually covers

Read the complete letter and any enclosed factsheets before drafting a response. Note the taxpayer name, reference, tax type and periods under review, then list the specific questions or records requested. HMRC checks can concern personal returns, company tax, accounts or employer records. ^[1] A business with several registrations should not assume that a letter about one tax automatically concerns every return it submits.

Create a short summary in plain English: what HMRC is checking, what it wants next and by when. Keep that summary separate from the original so no detail is lost through annotation or rewriting. If the letter refers to an earlier conversation you do not recognise, identify that as a question to resolve. Do not fill the gap by assuming a colleague or former adviser agreed something on your behalf.

Verify the contact and preserve the record

If there is doubt about authenticity, use independently obtained official contact information to verify the correspondence before sending sensitive records or money. Preserve the envelope, attachments and electronic message where relevant. Record the date the letter arrived as well as the date printed on it. Tax scams: verifying a message from HMRC explains the practical checks for suspicious HMRC messages and why a familiar-looking sender name is not enough.

Once verified, store the letter in a case folder accessible to the people handling the response. Use a stable filename containing the date and reference, and keep a copy outside an individual employee's inbox. If several departments received related letters, bring them together without deleting duplicates that contain different enclosures or delivery information. A complete opening record helps avoid contradictory replies from different parts of the organisation.

Allocate the response and deadlines

Nominate one person to coordinate the file and identify who will provide the underlying records. If an accountant or specialist will act, send the complete letter promptly and confirm that they have accepted the task. Merely forwarding an email does not establish that the adviser is monitoring the deadline. Agree who checks incoming post while the response is being prepared and how urgent documents will be escalated.

Distinguish an ordinary request from a formal information or inspection notice. HMRC explains that failure to comply with formal notices can lead to penalties, subject to the applicable rules and circumstances. ^[1] If more time or clarification is needed, raise the issue promptly and preserve any agreed response. Do not assume that asking a question, appointing an adviser or sending an acknowledgement automatically extends the stated date.

Gather evidence around the questions raised

Build a request list linking each HMRC question to the relevant return, calculation and source documents. For a queried expense category, that may mean the ledger entries, invoices and business-purpose explanation. For a difference in reported income, it may involve reconciliation to statements and the accounting basis used. The initial aim is to understand the figures and locate evidence, not to create an unsupported narrative before checking the records.

Keep original documents unchanged and label any later reconstruction clearly. Record missing items and the steps taken to obtain replacements. If you identify a possible error, tell the adviser handling the check so the appropriate response can be considered. A hurried explanation based on memory can create further inconsistency if later records show different dates, amounts or parties to the transaction.

Plan the first substantive response

Prepare answers in the same order as the letter, with an index of supporting documents and a clear explanation of unresolved points. Check that the response addresses the actual periods and taxpayer concerned. Where a legal question, privilege issue or potential allegation requires specialist advice, obtain that input before making statements whose significance has not been understood. Accurate cooperation includes recognising the limits of the information currently available.

For assistance organising a compliance-check response, see HMRC enquiry response support. Provide the verified letter, response date and a short description of the records available so the scope can be assessed. HMRC will communicate the outcome of a check in writing, and further tax, repayment or penalty questions may follow according to the findings. ^[1] Keep the opening response within a continuing case record rather than treating it as an isolated letter.

Before sending, confirm the delivery channel and retain the exact submitted version with its attachments. Log what was sent, when and by whom, then diarise any expected reply or remaining evidence. This allows a later handler to continue the matter without reconstructing the first response from drafts scattered across several inboxes.

Illustrative scenario

A business receives a letter about a specific VAT period. It logs the date, verifies the reference and gathers the relevant return records rather than sending every company file without review.

Preparation checklist

• Preserve the original letter
• Verify the reference
• Identify the tax and period
• Record the response deadline