HMRC Compliance Checks Guide | What to Do | 2026

What is an HMRC Compliance Check?

A compliance check is any action taken by an HMRC officer to check a person’s tax position. They can range from a simple request for a small piece of information to a full and detailed investigation of your financial affairs over several years.

It’s important to distinguish a compliance check from a ‘nudge’ letter.

• Nudge Letter: An informal prompt to review your affairs.
• Compliance Check: A formal process to verify your tax position.

Why Does HMRC Start a Compliance Check?

HMRC starts a compliance check for a variety of reasons:

• Data Mismatches: Their ‘Connect’ system may have flagged a discrepancy between your tax return and data they hold from banks, the Land Registry, or other sources.
• Third-Party Information: They may have received information about you from a third party.
• Risk Assessment: Your tax return may have triggered a risk assessment in HMRC’s systems.
• Random Selection: HMRC does randomly select a small number of returns for checks.

Types of Compliance Checks

A compliance check can be into a filed tax return or can happen before a return has even been submitted. The process and scope can vary significantly. For a simple matter, they might just call you to clarify a fact. For a more serious investigation, they may request a full set of business records. Our HMRC Self Assessment Guide can help you understand the context.

The Compliance Check Process

The process typically involves the following stages:

1. Notification: You will receive a formal letter from HMRC stating that a compliance check is being opened. This will outline which tax year(s) are being reviewed and the specific areas of concern. HMRC must give you written notice within a statutory time limit.
2. Information Request: HMRC will ask you to provide specific information and documents, such as bank statements, expense receipts, or rental records. From August 2026, HMRC has introduced a new online service for uploading documents during a compliance check, allowing you to securely submit information digitally. This service requires a Government Gateway account and the case reference number from HMRC’s letter.
3. Review: HMRC officers will review the information you provide. This can take time. See our guide on HMRC Processing Times for what to expect.
4. Conclusion: Once their review is complete, HMRC will write to you with their conclusions. This could result in:
   • No change: They are satisfied with your return.
   • Underpayment: They determine you owe more tax, plus interest and possibly penalties. See our guide on HMRC Interest Charges and How to Avoid HMRC Penalties in UK.
   • Overpayment: They find you have paid too much tax and will issue a refund.

Your Rights During a Compliance Check

You have rights during a compliance check, including the right to:

• Be treated fairly and professionally.
• Be represented by a tax adviser or accountant. You do not have to deal with HMRC directly.
• Know what is being checked and why.
• Have a reasonable timeframe to provide information.
• Appeal HMRC’s decision if you disagree with their findings.

What to Avoid

• Do not ignore the letter. Failing to respond to a formal compliance check can lead to severe penalties. If you’ve lost the letter, see our guide: Lost Your UTR? for how we can help.
• Do not respond without professional advice. HMRC’s requests are carefully worded. How you respond can significantly impact the outcome. An accountant can help frame your responses to protect your position.
• Do not try to destroy or hide records. This is a serious offence.

Why You Need an Accountant for a Compliance Check

Having an experienced accountant manage a compliance check is invaluable. We can:

• Act as your buffer: All communication goes through us, reducing your stress.
• Manage the process: We will handle all the paperwork and correspondence.
• Interpret the request: We can quickly understand what HMRC is asking for and provide it in a way that is clear and helpful, which can speed up the process.
• Protect your interests: We will ensure your rights are respected and help you appeal if necessary.
• Negotiate on your behalf: If an underpayment is identified, we can work with HMRC to agree on the amount and arrange a payment plan if needed.

Need Help with an HMRC Compliance Check?

If you have received a compliance check letter, do not panic and do not deal with it alone. We have extensive experience managing HMRC investigations and can provide you with the expert support you need. We can also help you with related issues like UTR Invalid or Not Recognised? and Common UTR Number Problems.

This guide is intended for informational purposes and is based on UK tax regulations as of June 2026. Tax laws and government systems are subject to change. Always consult with a qualified professional regarding your specific financial situation. Right Tax Returns is an ACCA-registered firm.