Advanced Taxation (UK) · Statutory obligations, time limits and the implications of non-compliance

HMRC Enquiries, Assessments and Time Limits in ATX-UK

Updated 11 October 2026

HMRC can open an enquiry into a return within a window, usually 12 months after the day the return is filed. Outside that window it needs a discovery assessment. The general time limit for assessment is 4 years from the end of the tax year or period. It extends to 6 years for careless errors and 20 for deliberate ones.

Understand HMRC Enquiries, Assessments and Time Limits

A tax return is not final the moment you file it. HMRC has two main ways to challenge it. The first is an enquiry. The second is a discovery assessment. Time limits control both, and the ATX exam tests whether you can pick the right one.

An enquiry is HMRC's right to question a return. It needs no reason. HMRC must open it by notice within the enquiry window. For individuals and companies alike, the window ends 12 months after the actual filing date if the return was filed on time. Once the window closes, the return is normally final, unless HMRC can make a discovery assessment. An enquiry ends when HMRC issues a closure notice stating its conclusions. The taxpayer can apply to the tribunal to direct HMRC to issue one.

A discovery assessment lets HMRC collect tax it finds is missing after the enquiry window has closed. HMRC needs to have discovered a loss of tax. It also needs either a careless or deliberate error by the taxpayer or their agent, or to show that it did not have enough information to be reasonably aware of the problem. So once the enquiry window has closed, a discovery assessment needs careless or deliberate behaviour, or insufficient disclosure. This is why full and clear disclosure on the return protects a client.

The assessment time limit depends on behaviour. 4 years from the end of the tax year (or chargeable period) is the general time limit for assessment, where there is no careless or deliberate behaviour. It is extended to 6 years if the loss of tax is brought about carelessly. It is extended to 20 years if it is deliberate. The 4-year limit alone does not let HMRC reopen an innocent error after the enquiry window has closed. Behaviour also drives the penalty rates, so a behaviour question usually links to both.

Time limits also apply to the taxpayer. An individual can amend a return up to 12 months after the 31 January filing deadline. This runs from the deadline, not from the date the return was actually filed. For a company, the limit is 12 months after the filing deadline for the return. This differs from the enquiry window, which runs from the actual filing date. Most claims for relief, and error or mistake claims for overpaid tax, must be made within 4 years of the end of the tax year. Questions often ask you to date the final deadline for each action.

Key rules to remember

Enquiry window: return filed on time: Ends 12 months after the actual filing date; This applies to individuals and companies. The window runs from the date the return was actually filed, not from the filing deadline. An individual who files online on 10 January has a window ending on 10 January of the following year. A company that files its return on time has a window ending 12 months after the day it actually delivered the return.
Enquiry window: return filed late (individual or company): Ends on the first quarter day after the first anniversary of the actual filing date; Quarter days are 31 January, 30 April, 31 July and 31 October. The same quarter-day rule applies to a late company return.
Assessment time limit: general: 4 years from the end of the tax year or chargeable period; This is the general time limit for assessment where there is no careless or deliberate behaviour. A discovery assessment made after the enquiry window has closed still needs careless or deliberate behaviour, or insufficient disclosure to HMRC.
Discovery assessment: careless: 6 years from the end of the tax year or chargeable period; Careless means failing to take reasonable care.
Discovery assessment: deliberate: 20 years from the end of the tax year or chargeable period; Covers deliberate errors, whether concealed or not.
Taxpayer amendment and claim limits: Amend return: individual, 12 months after the 31 January filing deadline; company, 12 months after the filing deadline for the return. Overpayment or error claims: 4 years from the end of the tax year; The amendment limit runs from the filing deadline, not the actual filing date. An individual who files on 10 January can still amend until 31 January of the following year. This differs from the enquiry window, which runs from the actual filing date. Apply the limit stated in the question. Individual tax years end on 5 April.
Standard penalties for errors (maximum / minimum unprompted / minimum prompted): Deliberate and concealed 100% / 30% / 50%. Deliberate not concealed 70% / 20% / 35%. Careless 30% / 0% / 15%; Given in the ACCA tax tables. Applied to the potential lost revenue.
Interest on underpaid tax: 8.50% (assumed rate in the tax tables); The overpaid tax rate is 3.50%.

How to solve HMRC Enquiries, Assessments and Time Limits questions

Use the same sequence for any question on HMRC powers and time limits. It keeps your answer in order and earns the application marks.

1Identify who and what: individual or company, which tax year or accounting period, and the type of tax involved.
2Find the filing date and the actual date the return was filed. Decide whether it was on time.
3Work out the enquiry window and state whether it is open on the date given. On time: 12 months after the actual filing date. Late: the first quarter day after the first anniversary of the actual filing date. Both rules apply to individuals and companies. Remember an enquiry needs no reason.
4If the window is closed, test for a discovery assessment. Is there a loss of tax, and was there carelessness, deliberate behaviour or inadequate disclosure?
5Classify the behaviour from the facts: no careless or deliberate behaviour, careless, deliberate but not concealed, or deliberate and concealed. Quote the facts that justify it.
6Apply the time limit: 4, 6 or 20 years from the end of the tax year or period. State the final date and whether HMRC is in time.
7Calculate any penalty from the ACCA table, giving the range for prompted and unprompted disclosure, and mention interest at the underpaid rate.
8Finish with advice: what the client should do, such as disclose, amend the return or claim relief within the limit.

Quickest way: Three-line time limit check

When to use it: Use when a short requirement asks whether HMRC is still in time, with a few marks per year.

Write the tax year end date, for example 5 April 2021.
Add 4, 6 or 20 years depending on behaviour and write the date.
Compare with the date HMRC acts. If the date is later than the limit, HMRC is out of time. If earlier or equal, it is in time.
For enquiries, add 12 months to the filing date if filed on time. If late, find the first anniversary of the actual filing date and move to the next quarter day.

Common mistakes in HMRC Enquiries, Assessments and Time Limits

Counting the 4, 6 or 20 years from the date the return was filed.
Students mix up the assessment limit with the enquiry window, which runs from the filing date.
Fix: Assessment limits run from the end of the tax year or accounting period. Enquiry windows run from the filing date.
Saying HMRC needs a reason to open an enquiry.
Students confuse enquiries with discovery assessments, which do need a discovery.
Fix: State that an enquiry can be random or reasoned, and no reason is needed, provided notice is given within the window.
Using the wrong window for a late return.
Students apply the 12-month rule without checking when the return was filed.
Fix: If the return is late, for an individual or a company, take the first anniversary of the actual filing date and then the next quarter day.
Treating all errors as deliberate, or labelling behaviour without facts.
Students rush to the 20-year limit without examining the scenario.
Fix: Quote the facts. A failure to take reasonable care is careless. Knowingly omitting income or hiding it is deliberate. Concealment pushes the penalty to the higher rates.
Applying the penalty to the tax rather than to the potential lost revenue, or ignoring the minimum ranges.
Students quote only the maximum penalty percentage.
Fix: Give the maximum, then the minimum for unprompted and prompted disclosure from the ACCA table, and show the calculation for each.
Forgetting interest or the taxpayer's own deadlines.
Students focus only on HMRC powers.
Fix: Add interest on underpaid tax at 8.50%, and state the taxpayer's time limits to amend the return and to claim relief.

Worked examples

Example 1

Priya's 2024/25 self assessment return was filed online on 10 January 2026. Ravi's 2024/25 return was filed late on 15 March 2026. By what dates must HMRC give notice of an enquiry into each return?

Show the solution

The online filing deadline for 2024/25 is 31 January 2026 (the paper deadline was 31 October 2025). Priya filed online on 10 January 2026, so her return was on time.
Priya's enquiry window ends 12 months after the actual filing date of 10 January 2026, so on 10 January 2027.
Ravi's return was late, so the first anniversary of the actual filing date is 15 March 2027.
The next quarter day after 15 March 2027 is 30 April 2027.
So Ravi's window closes on 30 April 2027.

Answer: HMRC must give notice of the enquiry into Priya's return by 10 January 2027 and into Ravi's return by 30 April 2027.

Example 2

In October 2026 HMRC discovers that tax of £8,000 was underpaid for 2020/21 because of a careless error. It also finds £10,000 of tax underpaid for 2019/20 because the client deliberately left out income and hid it by falsifying records. Can HMRC assess each year, and what penalty range applies? Assume the enquiry windows are closed.

Show the solution

2020/21 ends on 5 April 2021. Careless behaviour gives a 6-year limit, ending 5 April 2027. October 2026 is before this date, so HMRC is in time.
The 2020/21 penalty is based on careless behaviour. The maximum is 30% of £8,000 = £2,400.
The minimum if disclosure is unprompted is 0%, so £0. The minimum if prompted is 15% of £8,000 = £1,200.
2019/20 ends on 5 April 2020. Deliberate behaviour gives a 20-year limit, ending 5 April 2040. HMRC is in time. Even a careless limit (6 years, to 5 April 2026) would have expired.
The 2019/20 penalty is deliberate and concealed. The maximum is 100% of £10,000 = £10,000.
The minimum if unprompted is 30% of £10,000 = £3,000. The minimum if prompted is 50% of £10,000 = £5,000.
Interest also runs on both amounts at the underpaid rate of 8.50%.

Answer: HMRC is in time for both years (2020/21 until 5 April 2027 and 2019/20 until 5 April 2040). The 2020/21 penalty ranges from £0 (unprompted) or £1,200 (prompted) up to £2,400. The 2019/20 penalty ranges from £3,000 (unprompted) or £5,000 (prompted) up to £10,000. Interest at 8.50% applies as well.

Exam tips

Set out dates in a clear line for each year. Markers award marks for correct limits and for stating the final date.
Always classify behaviour from the facts in the scenario and say why. This earns the application and professional skills marks.
Copy the penalty percentages from the ACCA tax tables and show the range, not only the maximum.
Remember that adequate disclosure on the return can stop HMRC making a discovery assessment, so advise on disclosure in your recommendation.
State the taxpayer's own deadlines too: an individual can amend the return up to 12 months after the 31 January filing deadline (a company, 12 months after its filing deadline), and claim relief within 4 years of the end of the tax year. Do not confuse the amendment limit, which runs from the deadline, with the enquiry window, which runs from the actual filing date.

Practice questions from Statutory obligations, time limits and the implications of non-compliance

HMRC Enquiries, Assessments and Time Limits: frequently asked questions

How long can HMRC go back for tax errors?

It depends on behaviour. The general time limit for assessment is 4 years from the end of the tax year. It is 6 years for careless errors and 20 years for deliberate ones. After the enquiry window closes, a discovery assessment still needs careless or deliberate behaviour, or insufficient disclosure. The clock runs from the end of the tax year or accounting period, not the filing date.

What is the enquiry window for self assessment?

For a return filed on time, the window ends 12 months after the actual filing date. For a late return, it ends on the first quarter day after the first anniversary of the actual filing date. Once it closes, HMRC needs a discovery assessment to challenge the return.

What is the difference between an enquiry and a discovery assessment?

An enquiry needs no reason but must start within the enquiry window. A discovery assessment is used after the window closes and needs a discovered loss of tax plus careless or deliberate behaviour, or insufficient information given to HMRC.

How does careless versus deliberate behaviour change the time limit and penalty?

Careless errors give a 6-year assessment limit and a penalty of up to 30%. Deliberate errors give a 20-year limit and penalties of up to 70% (not concealed) or 100% (concealed). Unprompted disclosure reduces the minimum penalty.