Compliance checks, enquiries, disclosures and penalty disputes
HMRC Tax Investigation Accountant in Cardiff
An HMRC letter needs a considered response, not a hurried explanation. We establish the power being used, the tax and periods under review, the reply date and the evidence behind the original figures before correspondence is sent.
For individuals, landlords, sole traders, directors and companies in Cardiff and South East Wales. If your letter mentions Code of Practice 9, the Contractual Disclosure Facility, suspected fraud or a criminal investigation, use the urgent specialist guidance below before responding.
The first reply shapes the enquiry
What should you do after receiving an HMRC investigation letter?
Keep the full letter and attachments, record the exact response date and preserve the records that existed when the return was prepared. Continue filing current returns and paying current liabilities while the check is open.
A short acknowledgement may be appropriate, but a detailed explanation should wait until the legal basis, facts and documents have been reviewed. Do not create replacement records, alter original files or guess at an answer.
Read the official compliance-check process ↗- 01
Read every page
Identify the officer, reference, letter heading, tax, periods, questions, requested documents and response date.
- 02
Preserve the evidence
Retain the filed return, computation, accounts, bookkeeping, correspondence and the source records used at the time.
- 03
Separate fact from recollection
Write down what is known, what can be proved and what still needs checking. Do not fill gaps with assumptions.
- 04
Protect every deadline
Request additional time before the date if it is genuinely needed. An extension is not effective until HMRC agrees it.
- 05
Check for urgent escalation
COP9, fraud, interview-under-caution or criminal wording calls for a specialist response before substantive contact with HMRC.
Not every HMRC letter has the same status
Identify the type of tax enquiry before deciding how to respond
The heading and legislation matter. An informal request, a statutory enquiry, an information notice and a fraud procedure create different obligations, appeal rights and risks.
Informal request for an explanation or records
HMRC may ask questions without issuing a formal notice. The response can still affect the scope and penalty position, so relevance and accuracy should be checked.
Self Assessment or Corporation Tax return enquiry
The opening notice normally identifies the return under review. The filed figures, amendments and statutory enquiry window need confirming.
VAT, PAYE, CIS or cross-tax review
HMRC may examine transactions, employment records, VAT treatment, payroll or several taxes where the underlying facts connect them.
Schedule 36 information notice
A formal notice can require information or documents reasonably required to check a tax position. The deadline, scope and available appeal route must be read carefully.
Assessment, amendment or penalty notice
This may require payment, an appeal, a review request or further evidence. The letter normally states the route and time limit.
Tax irregularity found before or during a check
The facts determine whether a standard disclosure, Digital Disclosure Service, Worldwide Disclosure Facility or specialist fraud route is appropriate.
Complex avoidance or significant civil investigation
COP8 is handled by HMRC Fraud Investigation Service where complex arrangements or a significant loss of tax is suspected and COP9 is not being used.
Suspected tax fraud and a CDF offer
COP9 is not an ordinary enquiry. The Contractual Disclosure Facility has strict choices and an accepted offer normally requires an Outline Disclosure within 60 days.
Stop before making a substantive response
COP9, suspected fraud and criminal enquiries need specialist protection
If the correspondence mentions Code of Practice 9, the Contractual Disclosure Facility, suspected fraud, a criminal investigation, an interview under caution, a search or an arrest, obtain advice from an experienced COP9 professional and—where criminal exposure or legal professional privilege is relevant—a specialist solicitor.
Under an accepted CDF offer, full and accurate disclosure of the tax fraud is central to the protection offered by HMRC. Rejection, no response, an incomplete disclosure or false information can expose the person to criminal investigation. Do not use a generic reply or treat the 60-day period as a normal information-request extension.
From opening letter to closure
What HMRC tax investigation support includes
The scope is agreed after the letter is reviewed. Some matters close with a focused response; others need reconstruction across several years, taxes or entities.
Opening-letter review
We identify the statutory basis, tax, periods, deadline, stated risk and the exact information HMRC has requested.
Authority and contact control
Once properly authorised, we agree how correspondence, calls and meetings will be handled and keep a complete communication record.
Return and record reconstruction
The submitted figures are traced back to accounts, ledgers, bank activity, invoices, contracts, property records and other source evidence.
Technical tax analysis
We test the disputed treatment against the facts, relevant law, filing basis and connected taxes before preparing a position.
Evidence-led correspondence
Answers address each question clearly, distinguish known facts from estimates and provide an indexed document schedule where useful.
Tax and interest computation
Any adjustment is calculated by tax and period, with payments, losses, reliefs, consequential changes and interest considered.
Penalty representation
The behaviour, disclosure timing, reasonable-care evidence, special circumstances and quality of cooperation are addressed separately from the tax.
Closure and dispute route
We review the final amendment, assessment or penalty and explain the available review, appeal, ADR or specialist-litigation route.
A controlled case file can include the issue list, deadline schedule, evidence index, tax computation, correspondence log and final outcome record.
How investigation fees are scoped →One defensible route through the case
How an HMRC enquiry is worked from evidence to outcome
The objective is not to flood HMRC with papers or withhold information that is properly required. It is to understand the question, test the original position and provide accurate evidence in an organised form.
- LetterIdentify the process and deadlineCheck the heading, statutory basis, officer, taxes, periods and requested response.
- PositionRebuild the filed figuresTrace the return or submission back to records, advice and decisions made at the time.
- IssuesSeparate agreed facts from disputed pointsRecord missing evidence, technical questions and connected taxes before drafting.
- ReplyAnswer with indexed evidenceRespond to each relevant point and explain any estimate, correction or document limitation.
- Follow-upControl questions and meetingsKeep answers consistent with earlier filings and confirm important matters in writing.
- OutcomeCheck tax, interest, penalty and closureReconcile the final figures and use the correct dispute route where agreement is not possible.
Formal requests need line-by-line review
Responding to an HMRC information notice
Under Schedule 36, an information notice may require information or documents reasonably required to check a person’s tax position. The document should be read separately from any earlier informal request.
A response should provide what is properly required, explain documents that do not exist and challenge an item only where there is a sound basis. Statutory records and tribunal-approved notices can restrict normal appeal rights.
See HMRC's reasonable-and-proportionate safeguard ↗Is it informal or statutory?
The title, legislation and appeal paragraph show whether the request is an invitation or formal notice.
Is every item within scope?
Match each question to the tax position being checked and identify relevance, duplication and ambiguity.
Are statutory records involved?
Normal appeal rights do not apply in the same way to a requirement for a person’s statutory records.
Can the deadline be met?
Compile a document plan early and request a realistic extension before the date where necessary.
Is an appeal available?
Read the notice itself. Some information requirements can be appealed; others cannot.
What if the notice is ignored?
Failure can lead to an initial £300 penalty and continuing daily penalties of up to £60, with further sanctions possible in serious cases.
One fact can affect several returns
HMRC investigations across personal, property and business tax
The enquiry should be followed through every connected record. A company payment may also affect payroll, a director’s loan account and the director’s personal return.
Income, reliefs, expenses and omitted sources
Employment benefits, self-employment, savings, dividends, claims and unexplained bank entries may be compared with the filed return.
Rental income, ownership, finance costs and disposals
Tenancy records, agent statements, mortgages, repairs, improvements and beneficial ownership must agree with the property figures.
Acquisition cost, enhancement expenditure and reliefs
Completion statements, ownership history, private use and earlier claims support the gain rather than a reconstructed total alone.
Foreign accounts, property, investments and residence
Offshore data matching can raise questions about income, gains, residence, remittance treatment and the disclosure route.
Turnover, deductions, loans and connected parties
Statutory accounts, CT600 figures, bank activity, director balances and supporting computations should form one consistent record.
Sales, input tax, liability and evidence
HMRC may test output tax, zero-rating or exemption, purchase evidence, partial exemption and the digital audit trail.
Status, pay, benefits and subcontractor reporting
Payroll submissions, expenses, benefits, casual labour and contractor records may be tested against payments and working arrangements.
A schedule is more useful than a document dump
Records commonly needed for a tax enquiry
The required evidence depends on the issue. We start with the return and computation, then trace only the relevant figures to the underlying documents and explanations.
- Return, amendment and computation
- Accounts and supporting schedules
- Prior adviser correspondence
- Claims, elections and disclosures
- Sales and purchase records
- Invoices, receipts and contracts
- Bank and card statements
- Bookkeeping and digital audit trail
- Completion and legal statements
- Tenancy and agent records
- Loan and mortgage statements
- Improvement and valuation evidence
- Ledgers and bank reconciliations
- Director loan movements
- Payroll, benefits and expenses
- CIS and subcontractor evidence
- Overseas statements and tax vouchers
- Foreign tax paid
- Exchange-rate workings
- Residence and remittance evidence
- Contemporaneous emails and notes
- Professional advice relied upon
- Health or personal circumstances
- Explanation of missing records
Tax, interest and penalty are separate calculations
How HMRC considers penalties during an investigation
An error does not automatically mean an inaccuracy penalty. HMRC considers whether reasonable care was taken and, if not, whether the behaviour was careless, deliberate, or deliberate and concealed.
The disclosure may be prompted or unprompted. Any reduction within the applicable range considers the quality and timing of telling HMRC, helping with the check and giving access to records. Offshore matters can carry different or higher consequences.
Read HMRC's inaccuracy-penalty factsheet ↗Reasonable care
There is no inaccuracy penalty where the return was wrong despite reasonable care. The evidence is judged in the person’s actual circumstances.
Careless behaviour
HMRC considers whether the person failed to take reasonable care, including the records kept, checks made and advice sought and followed.
Deliberate behaviour
This alleges that the person knew the return or document was inaccurate when it was sent. It should not be accepted without reviewing the evidence and implications.
Deliberate and concealed
This adds active steps to hide an inaccuracy. The allegation is serious and may require specialist fraud or legal advice.
Prompted or unprompted
A disclosure after a check starts will usually be prompted, although an unrelated issue outside the check may need separate analysis.
Quality of disclosure
Clear facts, useful cooperation and properly indexed records matter; a volume of irrelevant material does not improve disclosure quality.
Worldwide Disclosure Facility
90 days from HMRC's acknowledgement of notification to make the WDF disclosure Check the official WDF process ↗Choose the disclosure route before submitting figures
Correcting undeclared income or gains
A voluntary disclosure should establish the taxes, years, behaviour, offshore element and whether HMRC has already started a related check. The route can affect the time limits, forms, calculation and penalty treatment.
The Worldwide Disclosure Facility is used for UK tax liabilities relating wholly or partly to offshore income or assets. Separate notifications and disclosures may be needed for different people or entities. Deliberate conduct that may fall within COP9 should not be put through a standard route without specialist advice.
Where a check is already open, the correction must be coordinated with the officer and treated consistently with the existing questions. A disclosure cannot safely be separated from the facts that created it.
Prepare the evidence before the conversation
HMRC calls, meetings and visits
An invitation to a meeting is not automatically a formal requirement, although a notice or inspection power may create separate obligations. Before agreeing, establish the purpose, agenda, attendees, documents and whether the questions can be dealt with more effectively in writing.
When a meeting is useful, prepare the chronology and records, attend with an adviser and answer honestly. It is better to check an uncertain fact and reply later than to guess. Important explanations and agreed actions should be confirmed in writing.
Read HMRC's compliance-check help and support ↗The final figures must close every connected issue
Possible outcomes of an HMRC compliance check
Closure is not just a headline tax figure. Amendments, interest, penalties, payment dates, losses and the effect on later returns should all be reconciled.
The filed position is accepted
HMRC may close the check without amendment where the explanations and records support the return.
The check finds too much tax was paid
A correction or repayment can arise where the evidence supports a lower liability, subject to the applicable process.
Tax and interest are recalculated
The amendment or assessment should be traced by period and checked against payments and consequential reliefs.
Behaviour and disclosure are decided separately
The stated behaviour, penalty basis, reductions and special circumstances should be checked against the evidence.
Review, appeal, ADR or tribunal may follow
The decision letter controls the available route and deadline; many tax appeals must be started within 30 days.
The records follow how the work is actually done
Tax investigation support for Cardiff individuals and businesses
Cardiff cases often combine personal and business records: a director uses company funds, a landlord renovates between tenancies, a consultant invoices through a company, or a hospitality business receives cash, card and platform income.
We map the transactions across the bank, books, returns and legal ownership instead of treating one HMRC question in isolation.
Agent statements, joint ownership, mortgage finance, repairs, capital improvements, refinances and disposals.
Turnover, salary, dividends, benefits, expenses, director loans and personal returns.
Cash, card processors, delivery platforms, stock, tips, VAT and payroll records.
Subcontractors, CIS returns, materials, vehicles, mixed expenditure and VAT treatment.
Foreign accounts, property, investments, pensions, residence history and tax paid abroad.
Scope the first phase before committing to the whole case
Fees for HMRC tax investigation work
An initial review can normally be quoted after seeing the HMRC letter and understanding the filing history. It identifies the process, urgent dates, records required and the likely next phase.
Longer enquiries are priced in agreed stages because the volume of records, number of periods, HMRC follow-up and disputed issues cannot always be known at the outset. Work already covered by valid tax-investigation insurance should be notified to the provider before costs are incurred.
Read how our fees workInitial letter and risk review
Process, deadline, tax, periods, information requested and immediate response.
Records and years involved
Completeness of bookkeeping, source evidence, historic filings and missing information.
Taxes and connected entities
Whether the enquiry crosses personal tax, company tax, VAT, PAYE, CIS or offshore matters.
Technical and behavioural dispute
Complex tax treatment, valuations, deliberate-behaviour allegations, penalties or appeals.
Correspondence and meetings
Volume of questions, document indexing, calls, interviews, visits and settlement work.
Common questions after an HMRC letter
HMRC tax investigation questions
The wording of the letter and the tax involved determine the precise answer. These points explain the usual starting position.
What should I do first when HMRC opens an enquiry?
Keep the complete letter, note the reply date and gather the filed return, computation and supporting records. Avoid a detailed explanation until you have checked what HMRC is asking and whether the original figures are correct.
Can I ignore an informal HMRC request?
No. Informal does not mean unimportant. You can ask HMRC to explain relevance or use formal powers where appropriate, but silence may lead to a formal notice or a wider check. Take advice on the best response.
Do I have to give HMRC my bank statements?
It depends on the issue, the accounts involved and whether HMRC is making an informal request or using a valid information notice. Business and personal transactions can overlap, but the request should still be relevant and proportionate to the tax position being checked.
How many earlier years can HMRC investigate?
The applicable time limit depends on the tax, filing date and whether the loss of tax arose despite reasonable care, through carelessness or through deliberate conduct. Offshore matters can operate differently. The facts should be reviewed before accepting that an older year is in time.
Must I attend an HMRC meeting?
Not every invitation is compulsory. Ask whether the meeting is voluntary or supported by a formal power, what HMRC wants to discuss and whether written answers would be more effective. If attending, prepare with your adviser and do not guess at facts.
Will appointing an accountant stop the investigation?
No adviser can promise that. Representation can organise the evidence, keep correspondence consistent, identify irrelevant or disproportionate requests and help HMRC reach a properly supported outcome.
Does an error always result in a penalty?
No. An inaccuracy penalty should not arise where reasonable care was taken. If reasonable care was not taken, the behaviour, whether disclosure was prompted and the quality of disclosure affect the penalty position. Late filing, failure to notify and other defaults have separate rules.
Can I appeal an HMRC assessment or penalty?
Many decisions can be appealed, commonly within 30 days, but the route differs by tax and decision. The notice should state whether to appeal to HMRC, accept an independent review or notify the tribunal. Late appeals need an explanation and may not be accepted.
What should I do with a Code of Practice 9 letter?
Obtain urgent advice from an experienced COP9 specialist before accepting, rejecting or replying to the CDF offer. Where criminal exposure or legal professional privilege matters, involve a specialist solicitor. The CDF choices and 60-day Outline Disclosure period should not be approached as an ordinary tax enquiry.
Start with the letter, deadline and filed figures
Put the HMRC enquiry on a controlled footing
Tell us what HMRC has sent and when a response is due. We will explain the initial information needed to assess scope and the appropriate next step.
Technical content reviewed 3 September 2026. Tax treatment and enquiry rights depend on the facts, the legislation used and the date of HMRC's notice.