Is HMRC looking at your tax affairs?

People search for this question in two very different situations. Some have received something from HMRC and are not sure whether it amounts to an investigation. Others have received nothing, but know something in their past returns may not stand up, and want to know whether HMRC is likely to find it.

This guide deals with both: how HMRC actually signals that it is checking, what tends to prompt a check, and what to do in each case.

How HMRC tells you it is checking

HMRC works in writing. A formal check almost always begins with a letter, and the letter says what it is. The main kinds are:

• A nudge or “one to many” letter. Sent in bulk to people HMRC’s data suggests may have undeclared income of a particular type — rental income, overseas accounts, cryptoassets, online selling. It is not a formal enquiry, but it is a sign HMRC holds data about you. Our guide to nudge letters and the certificate of tax position covers them in detail, and there is a separate guide to HMRC letters to online sellers and content creators.
• A compliance check or enquiry letter. A formal notice that HMRC is checking a particular return or matter, usually citing section 9A of the Taxes Management Act 1970 for a personal return. See compliance checks.
• An information notice. A formal request for documents or information under Schedule 36 to the Finance Act 2008, with a deadline and penalties for not complying.
• A Code of Practice 8 or Code of Practice 9 letter. These come from HMRC’s specialist investigators and signal a serious case; see COP8 investigations. COP9 in particular means HMRC suspects tax fraud and is offering the Contractual Disclosure Facility.
• A discovery assessment or penalty notice. These state a figure. They are the result of a check rather than the start of one, and carry appeal deadlines. See discovery assessments and penalty appeals.

If you are unsure which of these you have, our page on identifying your HMRC letter walks through them.

One genuine HMRC letter that often causes alarm is not a compliance check at all. A Simple Assessment, on a form headed PA302, is a tax bill HMRC has worked out itself from information it already holds. It is still a bill: anyone who thinks the figures are wrong has 60 days to query it. Retired people with a large State Pension and only a small second pension often receive one every year; our guide to why retired people keep getting tax bills explains why.

Can HMRC be looking without telling you?

Yes, in the sense that HMRC gathers and analyses data continuously, and a case can be under review internally before any letter is sent. There is no way to ask HMRC whether you are “being investigated” and receive a useful answer, and asking can itself draw attention to a matter without improving your position.

What you can rely on is that a formal step against you — an enquiry, an information notice, an assessment — comes in writing with a statutory basis you can check.

What tends to prompt a check

HMRC does not publish a meaningful “chance” of being checked for any individual, and it would be misleading to put a number on it. What it does describe is a risk-based approach. In practice, checks tend to follow from:

• Third-party data that does not match a return. HMRC receives information from banks, letting agents, the Land Registry, employers, overseas tax authorities under the Common Reporting Standard, online selling and short-let platforms, and — from 2026 — cryptoasset service providers. Its analysis system, Connect, matches that data against what has been declared.
• A return that looks inconsistent. Figures that are out of line with previous years, with similar businesses, or with the lifestyle other data suggests.
• Undeclared events. A property sale with no capital gains return, a new letting with no Self Assessment registration, overseas income that appears in exchanged data.
• Particular claims. Large repayment claims and relief claims attract checks of their own; research and development relief is a well-known example.
• Information from the public. HMRC receives reports about individuals and businesses; the next section explains what happens when someone reports you.
• Campaigns. HMRC runs targeted projects on sectors or types of income, which is where most nudge letters come from.

Some enquiries are also opened on returns selected at random, to test how accurate returns are generally. Being checked is therefore not in itself a sign that HMRC believes anything is wrong.

What happens when someone reports you to HMRC?

Most explanations of what happens when you report someone to HMRC, or report someone for tax evasion, are written for the person making the report. This section is for the other side: the person who has been reported, or suspects they have, perhaps by a former partner, employee or business rival. Anyone can report a person or business to HMRC, and they do not have to give their name.

What HMRC does with a report

In HMRC’s terms, information from a member of the public is intelligence, not evidence. HMRC’s guidance on tribunal cases says officers normally use intelligence to gather facts or documents, which then serve as the evidence for any tax decision, and that in most cases HMRC relies at the tribunal on that evidence, not on the intelligence that prompted it.

So a report does not, by itself, change anyone’s tax position. If HMRC acts on one, it does so in the usual ways: a letter, a compliance check, or a formal information notice. The person who made the report is not told the outcome: HMRC says it cannot provide any feedback on a report.

HMRC will not say who made it

Reports can be anonymous, and HMRC says the information given is kept private and confidential. Its guidance to its own officers goes further. It says HMRC has a duty to protect the people who give it information, and that officers must not ask for anything, or include anything in an information notice, that might identify an informant or the source of the information. If asked at a tribunal about a human source, HMRC’s stated policy is neither to confirm nor deny that one exists.

In practice, asking HMRC whether you have been reported, or by whom, is unlikely to produce an answer.

A report does not mean a check will follow

HMRC does not say that every report leads to a check. Its guidance on rewards for reporting recognises that information it receives may already be known to it, or could have been found through its routine processes. Whether anything follows depends on what HMRC makes of the information alongside everything else it holds, and there is no way to tell that from outside.

It works the other way too. A check that does arrive may have nothing to do with a report: HMRC’s guidance says most enquiries are selected on risk, and some returns are chosen at random.

If a letter then arrives

Deal with the letter on its own terms. It will say which return, period or tax HMRC is looking at and what it wants, and that, not the report, defines what has to be answered.

• Identify what it is and which power it relies on. Our page on identifying your HMRC letter walks through the main kinds.
• Note the deadline, and if the letter is a formal information notice, the separate 30-day limit for any appeal.
• Answer what is asked, accurately. Guessing at who made a report, or what it said, does not help: HMRC will not confirm either.
• If something in your past returns does need putting right, timing matters. A disclosure counts as unprompted only if it is made when you have no reason to believe HMRC has discovered, or is about to discover, the problem. Whether a suspicion that you have been reported changes that depends on the facts. See our page on voluntary disclosures.
• Take advice before responding to anything from HMRC’s Fraud Investigation Service, or any letter that mentions Code of Practice 9.

What to do if a letter has arrived

1. Identify what it is and which power it relies on. That decides your obligations.
2. Note the deadline. Formal notices have statutory deadlines, and missing them can bring penalties or leave an assessment standing.
3. Do not ignore it, but do not reply in a hurry either. The first response to HMRC tends to shape everything that follows.
4. Answer what is asked. Volunteering unrelated material, or guessing at figures, rarely helps.
5. Take advice before responding to anything from HMRC’s specialist investigators.

What to do if nothing has arrived, but something is wrong

This is the one situation in HMRC work where acting early is straightforwardly better. A disclosure made before you have reason to believe HMRC is about to discover the problem is treated as unprompted, which puts it in the most favourable part of the penalty rules. Once a letter arrives, that option has usually gone.

See our pages on voluntary disclosures and the Let Property Campaign, and our guide to how far back HMRC can investigate, which explains how many years a disclosure is likely to need to cover.

Sources

• Taxes Management Act 1970, section 9A (enquiries into personal returns) and section 29 (discovery assessments)
• Finance Act 2008, Schedule 36 (information and inspection powers)
• Finance Act 2007, Schedule 24 (penalties for errors, including the prompted and unprompted distinction)
• HMRC, Code of Practice 8 and Code of Practice 9
• Taxes Management Act 1970, section 28H (simple assessments) and section 31AA (querying a simple assessment within 60 days), inserted by the Finance Act 2016; Simple Assessment — GOV.UK
• HMRC, “Report tax fraud or avoidance to HMRC” and “Reporting serious tax avoidance or evasion” (GOV.UK), and the online reporting service’s “What you need to know” page
• HMRC Compliance Handbook CH207315 (protecting information sources) and CH221000 (information powers); Appeals, Reviews and Tribunals Guidance ARTG8640 (intelligence and the tribunal); Specialist Investigations Operational Guidance SIOG2110 (human intelligence sources); Enquiry Manual EM0091 and EM0093 (risk-based and random enquiries)
• Finance Act 2007, Schedule 24, paragraph 9 (prompted and unprompted disclosure)

This guide is general information, not advice on any particular case.