Opening letters, information requests, meetings and closure
HMRC Compliance Check Accountant in Cardiff
A compliance check is HMRC’s civil review of whether a tax position is correct. We read the opening letter, identify the tax and periods involved, rebuild the figures from the underlying records and prepare a focused response to the questions actually asked.
For individuals, landlords, sole traders, directors and businesses across Cardiff and South East Wales. An opening letter does not by itself mean HMRC has found wrongdoing, but every explanation and document should be accurate, relevant and consistent with the filed position.
The direct answer
What is an HMRC compliance check?
An HMRC compliance check examines whether the correct tax has been paid at the correct time and whether allowances, reliefs, repayments and submitted figures are supported. HMRC may check a whole return, one transaction, one accounting period or a particular risk.
The check may begin by letter or telephone and can involve written questions, documents, meetings or inspection of business premises and records. HMRC should explain what it wants to check. The taxpayer remains responsible for accurate information even when an adviser is appointed.
Use HMRC's official compliance-check guide ↗Establish the correct tax position
HMRC checks income, transactions, claims, deductions or records and closes the case when its work is complete.
The opening letter sets the initial scope
It should identify what is being checked, the period involved, the officer and what is required next.
No change, repayment or additional tax
The records may support the filing, reveal an overpayment or lead to an amendment, interest and possibly a separate penalty decision.
Current returns and payments continue
An open check does not suspend later filing, payment, payroll, VAT or other ongoing obligations.
Do not let the deadline force an incomplete answer
What should you do after receiving an HMRC compliance-check letter?
Keep the complete letter and factsheet, note the exact response date and collect the return or submission being checked. Preserve the records as they existed when it was prepared.
Before sending documents, identify whether the request is informal or statutory, whether every item is relevant and whether the original filing needs correction. If more time is genuinely needed, request it before the deadline and obtain HMRC’s agreement.
Read HMRC compliance-check help and support ↗- 01
Identify the check
Record the officer, reference, tax, period, return, stated risk, questions and response date.
- 02
Keep the original evidence
Retain the filed return, computation, accounts, digital records, correspondence and source documents.
- 03
Rebuild the questioned figures
Trace each amount back to the books and explain how the tax treatment was selected at the time.
- 04
Separate facts from estimates
Identify missing documents and uncertain recollections instead of presenting assumptions as evidence.
- 05
Plan one controlled response
Answer in the order asked, cross-reference documents and check consistency with earlier filings.
Read the process before deciding the response
The letter type determines the next step
HMRC may ask informally before using statutory powers. A formal notice, inspection notice or appealable decision should not be treated as ordinary correspondence.
A check can be narrow or cross several taxes
What can HMRC examine during a compliance check?
The work should begin with the scope stated by HMRC, but connected facts can lead to questions about another period, tax or entity. The response should show how each figure fits the wider records.
Self Assessment income and claims
Employment benefits, self-employment, savings, dividends, pensions, expenses, allowances and reliefs.
Self Assessment service →Landlord income and property costs
Rent, agent statements, ownership, finance costs, repairs, improvements and periods when property was not let.
Landlord tax returns →Capital gains and supporting cost
Acquisition, enhancement expenditure, ownership history, valuations, reliefs and completion dates.
Capital Gains Tax support →Foreign income, gains and residence
Foreign accounts, property, investments, tax paid overseas, residence and remittance treatment where applicable.
Foreign income returns →Accounts and Corporation Tax
Turnover, deductions, losses, director transactions, connected parties and the CT600 computation.
Corporation Tax service →Sales, input tax and VAT liability
Invoices, liability, registration, partial exemption, error corrections and the digital audit trail.
VAT return support →PAYE, benefits, expenses and CIS
Employee status, payroll submissions, benefits, casual labour, subcontractor verification and deductions.
Payroll service →Turnover, purchases and private use
Banking, card processors, online platforms, cash, stock, mileage, vehicles and mixed business-personal costs.
View all tax services →Formal powers change the response
Informal requests and Schedule 36 information notices
An informal request asks for cooperation. A Schedule 36 information notice formally requires specified information or documents that HMRC considers reasonably required to check the tax position.
The notice must be reviewed line by line. Some requirements can be appealed, but normal appeal rights are restricted for statutory records and notices approved by the tribunal. Failure to comply can lead to penalties, so a challenge and the document response must both be managed within the applicable dates.
Read HMRC information-notice factsheet CC/FS2 ↗The evidence should answer the identified risk
Preparing records for an HMRC compliance check
We start with the filed figure and work backwards to the records that support it. Documents are indexed and linked to the relevant question so that HMRC can follow the calculation without receiving an unstructured data dump.
- Return, amendment and computation
- Accounts and trial balance
- VAT, payroll or CIS submissions
- Claims, elections and prior disclosures
- Ledgers and reconciliations
- Business account statements
- Card and payment-processor reports
- Cash records and till summaries
- Sales and purchase invoices
- Receipts, contracts and agreements
- Property-agent and legal statements
- Foreign tax vouchers and statements
- Workings and allocation schedules
- Private-use adjustments
- Valuations and professional advice
- Reason for claims or reliefs
- Transaction and filing dates
- Contemporaneous emails and notes
- Who supplied and checked information
- When any error was discovered
- What no longer exists and why
- Attempts made to obtain copies
- Independent evidence available
- Method and limits of any estimate
Personal and business records should not be confused
When HMRC asks for bank statements
Business statements will often be relevant where HMRC is testing sales, purchases, drawings or transfers. Personal statements need a separate relevance analysis: for example, where business receipts entered a personal account or HMRC is testing whether declared income explains identified deposits.
Do not redact, withhold or provide material without first understanding the legal request. Instead, reconcile the account, identify transfers and non-taxable receipts and prepare explanations for entries that may otherwise be misunderstood.
Confirm the account and period
Match the request to the person, entity, tax and dates under review.
Reconcile transfers
Identify movements between owned accounts so the same money is not treated as new income.
Explain non-taxable receipts
Support loans, gifts, capital introduced, reimbursements and asset-sale proceeds with evidence.
Trace business income
Compare banking with invoices, cash records, card platforms and the turnover declared.
Document limitations
State what is unavailable, why, and what alternative evidence has been used.
From first letter to final reconciliation
What our HMRC compliance-check service includes
The work is scoped around the actual letter. A focused document question should not be priced or managed like a multi-tax business-record review.
Opening-letter review
We identify the power, tax, periods, response date, stated issue, requested documents and immediate priorities.
Agent authority and contact plan
Formal or temporary authorisation is arranged where needed, with responsibility for letters, calls and approvals agreed.
Return and record review
Questioned figures are traced to accounts, ledgers, bank activity, invoices, property records and other evidence.
Information-request analysis
Each item is checked for relevance, availability, duplication, statutory status and the clearest method of response.
Written response preparation
Answers follow HMRC’s numbering, distinguish facts from estimates and cross-reference an indexed document schedule.
Calls, meetings and visits
The agenda, records and likely questions are prepared, with adviser attendance and written follow-up where agreed.
Adjustment review
Any amended tax, repayment, interest or penalty is checked by period and reconciled with payments and returns.
Closure or dispute support
We review the closing letter or decision and explain the available evidence, review, appeal or ADR route.
A controlled response file can include a deadline schedule, issue list, evidence index, reconciliations, draft response and final outcome record.
How compliance-check fees are scoped →Keep the case tied to the question and evidence
A clear process from HMRC letter to closure
Each stage should leave an audit trail showing what HMRC asked, which records were reviewed, how the answer was reached and what remains outstanding.
- ReviewRead the letter and factsheetConfirm process, tax, period, deadline, requested records and any proposed call or visit.
- RebuildTrace the filed positionReconcile the return or submission to accounts, workings and source records.
- AssessIdentify supported and disputed pointsSeparate accurate figures, errors, missing evidence and technical disagreements.
- RespondAnswer and index evidenceProvide a clear narrative, schedules and documents matched to HMRC’s questions.
- ResolveDeal with follow-up proportionatelyPrepare for calls, meetings, further notices or calculations without losing the issue trail.
- CloseReconcile the written outcomeCheck amendments, payment, interest, penalty and any review or appeal deadline.
Prepare before agreeing the format
HMRC calls, meetings and business-record visits
HMRC may invite you to discuss the tax position or inspect business premises, assets and records. HMRC’s general support guidance says you do not have to attend an ordinary meeting if you do not want to, but a formal information or inspection notice may create separate obligations.
Ask for the purpose, agenda, attendees, proposed location and records in advance. Decide whether a written response, remote meeting or visit is the most efficient way to establish the facts.
Set the scope
Confirm whether attendance is voluntary or formal, the issues to cover and documents HMRC wants available.
Review the chronology
Read the return, correspondence and source records; identify uncertain facts and who can answer each area.
Answer accurately
Do not speculate. Record questions, supply known facts and agree to check points that require evidence.
Confirm in writing
Check HMRC’s notes where available and confirm material explanations, documents promised and next dates.
An adjustment does not automatically decide behaviour
Tax, interest and penalties are separate issues
A check may close with no change, a repayment or additional tax. Interest can follow an underpayment. A penalty requires its own legal basis and may depend on reasonable care, behaviour, disclosure timing and cooperation.
This page keeps penalty discussion at the level needed to manage an ordinary compliance check. Where undeclared tax, deliberate behaviour, a formal disclosure, COP8 or COP9 is involved, the broader investigation service is the correct page and specialist escalation may be required.
HMRC tax investigation and disclosure support →Finish with a written, reconciled position
How an HMRC compliance check can end
The final letter or notice should identify HMRC’s conclusions. Check the figures and the available action before any deadline passes.
The filing is supported
HMRC accepts the explanations and evidence without amending the tax position.
The check identifies too much tax
A supported correction may result in a repayment or reduction, subject to the applicable rules.
The tax position is corrected
Amendments or assessments should be checked by period and matched with interest and payments.
Further evidence or ADR may help
ADR can be considered during a stalled check or after an appealable decision, but it does not remove appeal rights.
A review or appeal deadline begins
HMRC’s letter normally explains the options; many decisions require action within 30 days.
Records should reflect how the activity operates
Compliance-check support for Cardiff taxpayers and businesses
Cardiff work frequently crosses personal and business records: a landlord pays costs from a personal account, a director takes money from a company, or a retail business receives cash, card and online-platform income.
We follow the actual transaction through the bank, books and return so that the explanation reflects what happened rather than a generic industry description.
Rent, joint ownership, agent statements, finance costs, repairs, improvements and disposals.
Turnover, expenses, salary, dividends, benefits, director loans and personal returns.
Cash, till records, card processors, delivery platforms, stock, VAT and payroll.
CIS, labour status, materials, vehicles, mileage, mixed costs and VAT records.
Overseas statements, tax paid abroad, property, investments, residence and exchange rates.
Start by pricing the letter and immediate response
Fees for HMRC compliance-check work
An initial review can usually be quoted after seeing the opening letter and understanding the filing history. It establishes the process, deadline, records required and the next piece of work.
Further work is agreed in stages where the volume of evidence or HMRC follow-up is uncertain. If valid tax-investigation insurance may cover the matter, notify the provider before incurring professional costs.
Read how our fees workOpening letter and deadline
The process, tax, periods, questions, notice status and immediate work required.
Quality and volume of records
Whether books reconcile, source evidence is complete and earlier filings are available.
Number of taxes and periods
A single transaction query differs from a check across several returns or entities.
Calls, meetings and visits
Preparation, attendance, document schedules and written follow-up add separate work.
Adjustment or dispute
Tax computations, penalty representations, ADR, reviews and appeals require a new scope.
Questions that arise before the first response
HMRC compliance-check questions
The opening letter and any enclosed notice determine the precise answer. These are the usual starting points.
Does a compliance check mean HMRC thinks I committed fraud?
No. A compliance check is a civil process used to establish whether a tax position is correct. The opening letter may concern one figure, a repayment, a return or wider records. Fraud procedures use different language and require specialist escalation.
How quickly should I respond to HMRC?
Use the date in the letter or notice. Start reviewing the position immediately. If the requested records cannot reasonably be assembled in time, ask the officer for an extension before the deadline and do not assume it has been granted until HMRC agrees.
Can my accountant speak to HMRC for me?
Yes, once HMRC has the required formal or temporary agent authorisation. You remain responsible for giving the adviser all relevant facts and for the accuracy of information supplied in your name.
Must I provide everything HMRC asks for?
Relevant information should be provided, but the legal position depends on whether the request is informal or contained in a valid information notice. Ask HMRC to clarify an unclear, duplicated or apparently irrelevant item. Do not ignore a formal notice.
Can HMRC ask for personal bank statements?
HMRC may seek personal statements where they are reasonably required to check the tax position—for example, where business receipts entered the account or identified deposits need explaining. The accounts, period and relevance should be reviewed before responding.
Do I have to attend a meeting with HMRC?
HMRC’s general guidance says an ordinary meeting invitation can be declined, but a formal notice or inspection power may create different obligations. Confirm the status, purpose and agenda and consider whether written answers would establish the facts more efficiently.
Can HMRC visit my business?
HMRC may ask to inspect business premises, assets and records. A visit may be by agreement, with advance notice or under formal powers. The letter and relevant factsheet should be checked so the scope, records, timing and rights are understood.
Will a compliance check always lead to a penalty?
No. The check may close without adjustment, and an error does not automatically establish a penalty. Penalties have their own conditions and can depend on reasonable care, behaviour, disclosure and cooperation.
What if I disagree with HMRC at the end?
Provide any overlooked evidence and check the decision letter. Depending on the matter, you may be able to request an independent HMRC review, appeal to the tribunal or apply for ADR. Many appealable decisions require action within 30 days.
Start with the letter, return and response date
Put the compliance check on a controlled footing
Tell us what HMRC is checking and when the response is due. We will explain what is needed to review the first letter and agree the next stage.
Technical content reviewed 3 September 2026. The correct response depends on the letter, tax, period, statutory power and facts of the case.