HMRC has the right to look into anyone’s affairs to ascertain that they are paying the correct amount of tax. If HMRC notifies you that you are the subject of a tax investigation, or if you are concerned about potential discrepancies in your affairs that may trigger one, we can help. Our dedicated HMRC team specialises in providing expert tax investigation advice to clients of all sizes across all industries. Our advice is commercially focused and practical, and we strive to resolve tax investigation issues as quickly and cost-effectively as possible.


For a confidential free discussion, call us today on 01908 414990,  alternatively email us at or complete our Free Enquiry Form and we will call you back.


What triggers a Tax Investigation?

Whilst it’s not unheard of for HMRC to choose a business to investigate at random, in practice, it is far more likely to base its decision on a specific risk factor.

Examples of common reasons why HMRC may choose you to undergo a tax investigation include the following:

  • Your tax return includes incorrect figures.
  • You operate in an industry classed by HMRC as high-risk, for example because it is known to have a high rate of cash in hand transactions.
  • Someone has tipped HMRC off to suspicious activities.
  • You frequently file your tax returns late.
  • Your accounts do not appear to be in line with the norm for your industry.
  • Your tax returns show inconsistencies, such as a significant drop in income from one year to the next.


How will you know you are the subject of a Tax Investigation?

Usually, the first sign that HMRC is investigating your tax affairs will be receipt of a formal letter or a phone call. In it, HMRC will detail its intention to carry out an investigation and may request further information from you. HMRC is not obliged to give its reason for undertaking the investigation, and it rarely does so.

It’s essential to seek specialist tax investigation advice as soon as you receive notification from HMRC that it intends to conduct a tax investigation. The matter will not go away and burying your head in the sand can lead to significantly more severe consequences than facing the issue head-on. Our HMRC team assist countless clients facing tax investigations. We will review the circumstances of the investigation, advise on your next steps, and support you as the matter progresses.


What types of Tax Investigation are there?

Broadly speaking, most tax investigations can be categorised as one of two types: Aspect and full. Aspect enquiries are concerned with a specific part of your accounts or tax return. Full enquiries involve HMRC reviewing every aspect of your tax return.

Whichever type of investigation you are facing, expert tax investigation advice is crucial in ensuring you address the issues correctly and comprehensively. In doing so, you have the best chance of HMRC showing leniency if it transpires that there are problems with your tax accounting.

If HMRC suspects you of fraud that has resulted in a significant loss of tax, they may open a ‘Code of Practice 9’ (COP 9) investigation. Dealt with by highly trained fraud officers, COP 9 investigations are the most serious civil investigations that HMRC undertakes.

When HMRC opens a COP 9 investigation into your affairs, it will issue a ‘Contractual Disclosure Facility’ offer, known as a CDF. The CDF invites you to disclose and pay any unpaid tax and expressly admit to fraud in exchange for immunity from criminal investigation or prosecution. Crucially, you will receive immunity only in relation to the tax you disclose in response to the CDF. Therefore, if you make an incomplete disclosure, you risk facing criminal proceedings, notwithstanding having accepted the CDF offer.

The importance of seeking tax investigation advice when faced with a COP 9 investigation cannot be overstated. If HMRC has opened a COP 9 investigation, it means that it believes you have committed tax fraud and is considering pursuing criminal charges against you. If you do not engage with the investigation, there is a very real risk that you will face prosecution.


What are the potential outcomes of a Tax Investigation?

There are several potential outcomes to a tax investigation, including the following:

  • HMRC is happy with your tax affairs.

In these cases, HMRC will close its investigation and take no further action.

  • HMRC finds that you have underpaid tax due to carelessness.

If HMRC identifies errors in your accounting but concludes these were due to errors as opposed to deliberate omissions, you will likely be required to pay any tax due within 30 days, potentially with interest.

  • HMRC finds that you have underpaid tax due to deliberate wrongdoing.

If the results of HMRC’s investigation indicate deliberate wrongdoing on your part, HMRC may initiate legal proceedings against you. HMRC usually opts for civil rather than criminal proceedings to recover the unpaid sums quickly. However, HMRC expressly reserves its right to pursue taxpayers for fraudulent activity through the criminal courts if it sees fit.

The severity of the penalty imposed by HMRC for unpaid tax can be influenced by various factors. Notably, if you informed HMRC of the issue of your own accord and cooperated fully with the tax investigation, HMRC may be more willing to show leniency. Therefore, you should take timely tax investigation advice from experts like ours as soon as a tax investigation looks likely and even beforehand. That way, you can ensure you are best placed to address the issue and persuade HMRC to impose as lenient a penalty as possible.


For a confidential free discussion, call us today on 01908 414990,  alternatively email us at or complete our Free Enquiry Form and we will call you back.