If HMRC Opens
A Compliance Check.

What it actually is

A compliance check, sometimes called an enquiry, is HMRC checking that a tax return or tax position is accurate. It's more routine than it sounds, most checks are HMRC verifying something, not accusing you of anything. They range from a single question about one line on a return, to a fuller review of several years of records.

It always starts the same way, a letter or a phone call telling you what's being looked at and why. If you use an accountant or bookkeeper, HMRC will normally contact them directly rather than you.

How far back they can go

What a penalty actually depends on

If a check finds you've underpaid, you'll owe the tax plus interest regardless. Whether there's a penalty on top, and how big it is, depends on two things: how the error happened, and how you responded.

• Careless errorA penalty of 0-30% of the extra tax, genuine mistakes made without due care.
• Deliberate errorUp to 70%, where you knew the return was wrong.
• Deliberate and concealedUp to 100%, where you knew it was wrong and took steps to hide it.
• Unprompted vs prompted disclosureTelling HMRC about an error before they've found it themselves earns a significantly lower penalty than them finding it first.

Full cooperation genuinely matters here, it's consistently one of the biggest factors in where a penalty lands within its range.