‘How far back can HMRC go?’ is usually one of the first questions our clients ask of our specialist HMRC solicitors and barristers. The answer is that HMRC’s reach depends on the circumstances and on why they say tax has been lost.
For a confidential free discussion, call us today on 01908 538294, alternatively email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.
Standard HMRC time limits
For many direct tax scenarios, HMRC’s usual starting point is a 4-year time limit, measured from the end of the relevant tax period. If HMRC says that the loss of tax was caused by carelessness, the time limit can extend to 6 years. If the issue involves an offshore matter or offshore transfer for income tax, capital gains tax, and inheritance tax, HMRC may have 12 years.
Where HMRC allege deliberate behaviour, failure to notify chargeability, or certain avoidance-related failures, the time limit can extend to 20 years. That is a long window, and it changes how you approach record gathering, explanations, and strategy from day one. We can help you work out which category HMRC will likely apply, and how to respond without inadvertently escalating the position.
What HMRC means by ‘careless’ and ‘deliberate’
These terms matter because they define how far back HMRC can go as well as the potential penalties it may impose.
Deliberate behaviour is knowingly or intentionally doing something or failing to do something you know you should do that results in a loss of tax, including deliberate inaccuracies intended to mislead. Carelessness is different. It relates to a failure to take reasonable care. The test is what a prudent and reasonable person would have done in your position.
When deciding whether to classify your failures as ‘deliberate’ or ‘careless’, HMRC will consider a range of factors, including what you knew at the time, what advice you took, what records you kept, and what checks you made before submitting returns.
Why HMRC might be looking into your tax affairs
Many HMRC investigations begin with something mundane, such as a discrepancy in reported income, a sudden change in figures year on year, or the fact that the taxpayer operates in a sector HMRC considers higher risk. HMRC’s data-led approach has increased the number of checks and investigations it carries out, and its systems are designed to cross-check large volumes of information from multiple sources. If you have received an enquiry letter or a compliance check, it is sensible to assume that HMRC believes there to be an issue to resolve, even if you believe that everything is in order.
You should treat any HMRC investigation as a priority. How you deal with the issue can affect how long the matter runs, how wide it becomes, and the eventual outcome. We can prepare the response on your behalf and handle communications with HMRC so that nothing important is missed and nothing unnecessary is volunteered.
How we deal with HMRC investigations
When you ask us to support you through a tax investigation, we usually begin by identifying what HMRC is actually asking for. HMRC letters can request large volumes of material, and it is easy to provide data that does not answer the point, or to provide something that creates a fresh line of enquiry. A focused approach usually means building a document list, a narrative, and a set of explanations that match the scope of the check.
We can act as your agent so that HMRC officers have a single point of contact, which helps to reduce the pressure on you or your business. That also allows us to manage deadlines proactively, including asking for more time where justified, rather than letting a date pass and trying to repair the damage afterwards.
We will look beyond the immediate request and assess the risk of where it could go next. Some matters remain civil and contained, while others move into more serious territory, including COP9-style fraud allegations or wrongdoing penalties. We can advise on HMRC disputes and appeals, including tribunal routes where needed.
When to take advice
HMRC matters move quickly once they begin, so early advice is crucial. At Altion Law, HMRC work is at the heart of our practice. Our solicitors are true specialists, routinely advising clients in connection with HMRC and Border Force issues of all types.
We have a proven track record of securing excellent outcomes for our clients through discussions with HMRC’s officers. If the matter cannot be resolved through negotiations, we can advise on reviews, appeals, and tribunal proceedings. Where you have an accountant, we can work with them as part of a combined team, so the technical tax work and the legal strategy support each other.
For a confidential free discussion, call us today on 01908 538294, alternatively email us at Hello@altion-law.co.uk or complete our Free Enquiry Form and we will call you back.
