Taxation (UK) · The procedures relating to compliance checks, appeals and disputes

HMRC Compliance Checks and Enquiries Explained

Updated 11 October 2026 · Fact-checked

An HMRC enquiry is a formal check into a tax return, opened by written notice within a set time limit. HMRC can ask for information and documents. The enquiry ends when HMRC issues a closure notice stating its conclusions and any amendments. In the exam, identify the taxpayer, the filing date and the deadline.

Understand HMRC Compliance Checks and Enquiries

HMRC works on a self-assessment system. You file a return and calculate your own tax. HMRC does not check every return when it arrives. It accepts the return and then checks some of them afterwards. These checks are called compliance checks.

The main tool for this is an enquiry. HMRC opens an enquiry by sending written notice to the taxpayer. The taxpayer may be an individual, a partnership or a company. The notice says HMRC is checking the return. HMRC does not have to give a reason. This is the key point for the random check. Some enquiries are opened because HMRC sees a risk, such as figures that look odd. Others are opened at random, with no suspicion. The procedure is the same either way. So the difference between a risk-based enquiry and a random one is only why HMRC chose the return, not what HMRC can do.

The time limit matters, and it depends on who filed the return.

Company: HMRC has until 12 months after the actual filing date to open an enquiry. This applies whether the company return was filed on time or late. There is no quarter day extension for a company.
Individual or partnership, return filed on time: HMRC also has until 12 months after the actual filing date.
Individual or partnership, return filed late: the limit runs to the quarter day following the first anniversary of the actual filing date. The quarter days are 31 January, 30 April, 31 July and 31 October. So a late individual or partnership return is open to enquiry for longer.

Outside these limits, HMRC can only act with a discovery assessment, which has its own conditions.

During an enquiry HMRC can ask for information and documents that it reasonably requires to check the return. The taxpayer can appeal against a notice if it is unreasonable. HMRC can also use its wider information powers to ask for records. Taxpayers must keep records, so they should be able to supply them.

The enquiry ends with a closure notice. It states HMRC's conclusion: either no amendments are needed, or the return is amended. The taxpayer can apply to the tribunal to direct HMRC to issue a closure notice if the enquiry drags on. If the taxpayer disagrees with the conclusions, they can appeal against the amendment.

If the enquiry finds extra tax, interest runs on the unpaid tax from the due date. In the exam, use the assumed underpaid rate of 8·50% from the tax rates table.

Key rules to remember

Enquiry window: company return (on time or late): Deadline = actual filing date + 12 months; Counts from the date the return was actually filed, not the filing deadline. A late company return is not extended to a quarter day.
Enquiry window: individual or partnership return filed on time: Deadline = actual filing date + 12 months; Counts from the date the return was actually filed, not the filing deadline. Early filing therefore brings the end of the window forward.
Enquiry window: individual or partnership return filed late: Deadline = the quarter day (31 Jan, 30 Apr, 31 Jul, 31 Oct) following the first anniversary of the actual filing date; Applies to income tax self-assessment returns only, not to companies. If the first anniversary falls on a quarter day, that quarter day is the deadline.
Opening an enquiry: Written notice of enquiry to the taxpayer within the window; HMRC need not give a reason, so a random check is as valid as a risk-based one.
Concluding an enquiry: Closure notice = conclusions + any amendments to the return; The taxpayer can ask the tribunal to direct HMRC to issue it, and can appeal against the amendments.
Interest on unpaid tax (assumed rates): Underpaid tax 8·50%; overpaid tax 3·50%; Rates from ACCA's tax rates table. Interest runs on unpaid tax at the assumed underpaid rate from the due date. Use the rate given in the table and do not invent other rates.

How to solve HMRC Compliance Checks and Enquiries questions

Use this order for any question on enquiries or compliance checks.

1Identify who filed: individual, company or partnership, and which return.
2Find the actual filing date and note whether it was on time or late.
3Work out the enquiry deadline. For a company, it is 12 months after filing, on time or late. For an individual or partnership, it is 12 months after filing if on time, or the next quarter day after the first anniversary if late.
4Compare the date of HMRC's notice with the deadline and state whether it is valid.
5State what HMRC can ask for: information and documents reasonably required to check the return, and the taxpayer's right to appeal against an unreasonable request.
6Explain how the enquiry ends: a closure notice with conclusions and any amendments.
7Add the consequences: extra tax, interest on the unpaid tax at the assumed underpaid rate from the due date, and possible penalties.
8Write the answer in short points with dates and the reason for each conclusion.

Quickest way: Date check in 20 seconds

When to use it: Use this for objective test questions asking whether HMRC can still open an enquiry.

Check who filed. A company never gets the quarter day extension.
Write down the actual filing date, not the due date.
Add 12 months. For a company, this is the deadline.
If an individual or partnership return was late, move on to the next 31 Jan, 30 Apr, 31 Jul or 31 Oct after that date.
If HMRC's notice is dated on or before the deadline, the enquiry is valid.
Remember that no reason is needed from HMRC.

Common mistakes in HMRC Compliance Checks and Enquiries

Counting the 12 months from the filing deadline instead of the actual filing date.
Students link all time limits to 31 January.
Fix: Always use the date the return was actually delivered to HMRC.
Forgetting the quarter day rule for a late individual or partnership return, or applying it to a company return.
The rule is an extra step that is easy to skip, and students forget that it covers only individuals and partnerships.
Fix: If an individual or partnership return is late, take the first anniversary and then move to the next quarter day. For a company, stop at 12 months after the actual filing date.
Saying HMRC must have a reason to open an enquiry.
Students assume suspicion is required.
Fix: State that HMRC can open an enquiry without giving reasons, including a random one.
Confusing an enquiry with a discovery assessment.
Both follow a return and both can raise extra tax.
Fix: An enquiry is opened within the window and ends in a closure notice. A discovery assessment is used when the enquiry window has passed.
Saying the enquiry ends when the taxpayer pays.
Students think of payment as the final step.
Fix: The formal end is the closure notice, which states conclusions and amendments.

Worked examples

Example 1

Mia filed her 2024–25 self-assessment return on 20 December 2025. HMRC sent her a notice of enquiry on 15 January 2027. Was the notice in time?

Show the solution

Mia is an individual and the return was filed on time (the deadline was 31 January 2026), so the window is 12 months from the actual filing date.
12 months after 20 December 2025 is 20 December 2026.
The notice is dated 15 January 2027, which is after 20 December 2026.

Answer: No. The notice was out of time, as the window closed on 20 December 2026.

Example 2

A company filed its corporation tax return late, on 10 March 2026. By what date can HMRC open an enquiry?

Show the solution

The taxpayer is a company, so the quarter day rule does not apply.
The window is 12 months after the actual filing date, whether the return was on time or late.
12 months after 10 March 2026 is 10 March 2027.

Answer: HMRC can open an enquiry up to and including 10 March 2027.

Example 3

Raj, an individual, filed his 2024–25 self-assessment return late, on 10 March 2026. By what date can HMRC open an enquiry?

Show the solution

The return was due by 31 January 2026, so it was filed late.
Find the first anniversary of the actual filing date: 10 March 2027.
The next quarter day after 10 March 2027 is 30 April 2027.
Any extra tax found would carry interest from the due date at the assumed underpaid rate of 8·50%.

Answer: HMRC can open an enquiry up to and including 30 April 2027.

Exam tips

Always write down the actual filing date first. The date in the question decides the deadline.
Check the taxpayer before you use the quarter day rule. It applies to late individual and partnership returns only, not to companies. State the rule explicitly to earn the method mark.
Use the words notice of enquiry, closure notice and amendments in written answers.
For random check questions, say HMRC does not need to give a reason.
If the enquiry window has passed, mention discovery assessments as the alternative.

Practice questions from The procedures relating to compliance checks, appeals and disputes

HMRC Compliance Checks and Enquiries: frequently asked questions

How does HMRC open an enquiry into a tax return?

HMRC sends a written notice of enquiry to the taxpayer within the time limit. It does not have to give a reason. The notice starts the formal check of the return.

What is the time limit for an HMRC enquiry?

For a company, HMRC has 12 months from the actual filing date, whether the return was on time or late. For an individual or partnership, it is also 12 months if the return was filed on time. If an individual or partnership return was late, the limit is the next quarter day after the first anniversary of the filing date.

What is the difference between an enquiry and a random compliance check?

A random check is simply an enquiry where HMRC picked the return without suspicion. The powers and procedure are the same. HMRC does not need to give a reason for either.

What is a closure notice?

It is the notice HMRC issues to end an enquiry. It states HMRC's conclusions and any amendments to the return. The taxpayer can appeal against the conclusions, or ask the tribunal to direct HMRC to issue one.