UK HMRC Tax Investigation Guide (2026/27)

A reference to UK HMRC tax investigations for 2026/27, focused on Income Tax and Capital Gains Tax for individuals: the kinds of check HMRC open, the time limits for enquiries and discovery assessments, information notices under Schedule 36, inaccuracy penalties under Schedule 24, disclosure facilities, the appeal route, and reasonable excuse. Statutory references link to legislation.gov.uk. This page is editorial guidance, not tax advice - if you are under enquiry, particularly under COP8 or COP9, take advice from a Chartered Tax Adviser, accountant or solicitor with tax investigations experience.

1. Overview: the HMRC investigation landscape

"Tax investigation" covers a range of HMRC checks, from a question about one figure on a return to a fraud investigation under Code of Practice 9. For Self Assessment the main legal framework is the Taxes Management Act 1970 (section 9A enquiries, section 28A closure notices, section 29 discovery assessments and the time limits in sections 34 to 36A), Finance Act 2008 Schedule 36 (information and inspection powers) and Finance Act 2007 Schedule 24 (penalties for inaccuracies). HMRC's own approach is set out in the Enquiry Manual and its compliance checks factsheets.

HMRC can check anyone's tax affairs, and say they will write or phone to tell you what they want to check (gov.uk: tax compliance checks). Most checks are risk-based: HMRC compare returns with information from third parties. HMRC do not publish how they select cases.

2. Types of enquiry

Aspect and full enquiries

A Self Assessment enquiry is opened under section 9A of the Taxes Management Act 1970. In law an enquiry extends to anything contained in, or required to be contained in, the return (s.9A(4)), but in practice HMRC often look at one area - an expense claim, a property, a capital gain - which is commonly called an "aspect" enquiry. A "full" enquiry looks at the whole return and the records behind it. HMRC can close one matter with a partial closure notice and continue with the rest (s.28A). If an enquiry suggests earlier years were also wrong, HMRC may use discovery assessments for those years (section 3).

Random enquiries

Some returns are checked at random as well as on risk. A random enquiry uses the same section 9A power, and the notice will not normally say how the return was selected. Being selected at random does not change the penalty rules if something is wrong.

Code of Practice 8 (COP8)

COP8 explains how HMRC's Fraud Investigation Service carries out civil investigations where it believes there may be a significant loss of tax - for example where someone has deliberately tried to pay less or used a scheme or device to reduce a liability - and Code of Practice 9 is not used. A COP8 investigation is not carried out with a view to criminal prosecution, but HMRC say they may change approach if they find evidence of fraud. Specialist representation is strongly advisable.

Code of Practice 9 (COP9) and the Contractual Disclosure Facility

COP9 applies where HMRC suspect tax fraud. HMRC offer the Contractual Disclosure Facility (CDF): you have 60 calendar days from receiving the letter to accept or reject the offer, extendable only in exceptional circumstances. If you accept, you give an outline disclosure within the 60 days and a fuller disclosure report later, and HMRC agree not to criminally investigate you with a view to prosecution for the deliberate behaviour you disclose. If HMRC hear nothing within 60 days they assume you have chosen not to co-operate and begin a civil or criminal investigation. HMRC will not offer the CDF if you are already under criminal investigation (HMRC: the Contractual Disclosure Facility). Penalties still apply and take account of how you co-operated.

3. Time limits and Section 29 discovery

Window to open an enquiry (Section 9A)

If you filed your return on or before the filing date, HMRC can open an enquiry up to 12 months after the day you filed it. A 2024/25 return filed on 15 January 2026 can be enquired into until 15 January 2027. If you filed late, or amended the return, the window runs to the quarter day (31 January, 30 April, 31 July or 31 October) after the first anniversary of the day you filed or amended it (TMA 1970 s.9A(2)). After the window closes HMRC cannot open an enquiry, but may still make a discovery assessment.

Discovery assessments (Section 29)

Section 29 lets HMRC assess tax where they discover that tax has been under-assessed. Where you filed a return, HMRC can only do so if the under-assessment was brought about carelessly or deliberately by you or someone acting for you, or if HMRC could not reasonably have been expected to be aware of it from the information you gave them before the enquiry window closed. In HMRC v Tooth [2021] UKSC 17 the Supreme Court held that a "deliberate inaccuracy" requires an intention to mislead HMRC about the truth of the statement (or possibly recklessness), and that a discovery does not become "stale" just because time passes. The time limits are:

Circumstance	Assessment time limit (after the end of the tax year)
Ordinary time limit (TMA 1970 s.34)	4 years
Loss of tax brought about carelessly (s.36(1))	6 years
Lost tax involving an offshore matter or offshore transfer (s.36A)	12 years
Loss of tax brought about deliberately, or failure to notify chargeability (s.36(1A))	20 years

For 2024/25 (year ending 5 April 2025), a 4-year assessment can be made up to 5 April 2029, a 6-year assessment up to 5 April 2031 and a 20-year assessment up to 5 April 2045. HMRC must show careless or deliberate behaviour to rely on the longer limits, and you can appeal against a discovery assessment on the tax and on whether HMRC were entitled to make it. The 12-year offshore limit has exceptions, for example where HMRC received information from an overseas tax authority, under EU law or an international agreement, from which they could reasonably have been expected to become aware of the lost tax in time to assess it within the normal limit (s.36A(7)).

Separately, the Requirement to Correct obliged people with offshore tax non-compliance up to April 2017 to put it right by 30 September 2018. Failure to correct attracts penalties under Finance (No. 2) Act 2017 Schedule 18. Anyone with historical offshore issues should take specialist advice.

4. The enquiry process step by step

Stage 1: Notice of enquiry

HMRC give notice of enquiry under section 9A. You can still amend your return during the enquiry, but the amendment does not limit the enquiry, and so far as it changes the tax due it does not take effect until a closure notice deals with it (TMA 1970 s.9B).

Stage 2: Information requests

HMRC usually ask informally for documents and explanations first. If that does not produce what they need, they can issue a formal information notice under Schedule 36 (section 5 below), which carries penalties for non-compliance. Reply in writing, keep a record of what you provided, and query requests that seem to go beyond what HMRC reasonably need.

Stage 3: Meetings and visits

HMRC may ask to visit your home, business or adviser's office, or ask you to visit them, and you can have an accountant or legal adviser with you (gov.uk). Many advisers prefer to deal with questions in writing so that there is an agreed record. A Schedule 36 notice can require documents and information, but not attendance at an interview.

Stage 4: Settlement

When HMRC have formed a view they set out the additional tax, late payment interest (Bank of England base rate plus 4 percentage points from 6 April 2025) and any Schedule 24 penalty. You can agree, agree in part, or dispute their figures. For careless inaccuracies HMRC can suspend a penalty (section 6).

Stage 5: Closure notice

The enquiry ends with a final closure notice under section 28A, which states HMRC's conclusions and either says no amendment is needed or makes the amendments. You can appeal in writing within 30 days (s.31A). If the enquiry has stalled, you can apply to the tribunal for a direction requiring HMRC to issue a closure notice within a specified period (s.28A(4)); the tribunal must give it unless HMRC show reasonable grounds for not doing so.

Stage 6: Statutory review and tribunal

After you appeal, you can ask for, or accept HMRC's offer of, a statutory review, or take the appeal to the First-tier Tribunal (Tax Chamber). See section 8 below.

5. Information notices under Schedule 36 FA 2008

What can HMRC demand?

A "taxpayer notice" (paragraph 1) can require you to provide information or produce documents reasonably required to check your tax position. A "third party notice" (paragraph 2) can be sent to someone else, but only with your agreement or the tribunal's approval (paragraph 3). A notice only requires documents in your possession or power (paragraph 18), and does not require privileged communications with legal advisers (paragraph 23).

Penalties for non-compliance

Failing to comply with an information notice can lead to a £300 penalty (paragraph 39) and further penalties of up to £60 a day while the failure continues (paragraph 40). Where the failure continues and HMRC believe a significant amount of tax is at stake, they can ask the Upper Tribunal to impose an additional tax-related penalty (paragraph 50). No penalty is due if you have a reasonable excuse (paragraph 45).

Appealing a Schedule 36 notice

You can appeal against a taxpayer notice, or a requirement in it, in writing within 30 days, stating your grounds (paragraphs 29 and 32). There is no appeal against a requirement to produce your statutory records, or against a notice the tribunal approved. If the tribunal confirms or varies the notice, you must comply within the period the tribunal or HMRC then specify (paragraph 32(4)).

6. The penalty regime (Schedule 24 FA 2007)

Penalties for inaccuracies in returns depend on your behaviour and on whether you told HMRC before you had reason to believe they had found the problem (unprompted) or after (prompted). For domestic matters (category 1) the ranges are (Sch 24 paras 4 and 10):

Behaviour	Unprompted disclosure	Prompted disclosure
Reasonable care taken	No penalty	No penalty
Careless	0% to 30%	15% to 30%
Deliberate but not concealed	20% to 70%	35% to 70%
Deliberate and concealed	30% to 100%	50% to 100%

The percentage is applied to the potential lost revenue. Within each range, HMRC reduce the penalty according to the quality of your disclosure: telling HMRC about the inaccuracy, helping them quantify it, and giving them access to records (Sch 24 para 9).

Offshore inaccuracies in Income Tax, Capital Gains Tax or Inheritance Tax can fall in category 2 or 3, depending on the territory involved, with maximum penalties of 150% and 200% respectively for deliberate and concealed behaviour (Sch 24 paras 4 and 4A). HMRC's factsheet on penalties for inaccuracies explains how it works. Separate penalty regimes cover failure to notify (FA 2008 Sch 41), late filing (FA 2009 Sch 55) and late payment (FA 2009 Sch 56). See our HMRC penalties guide.

For a careless inaccuracy only, HMRC can suspend all or part of the penalty for up to two years, with conditions designed to help you avoid further careless errors. If you meet the conditions, the suspended penalty is cancelled (Sch 24 para 14).

7. Disclosure facilities

Coming forward before HMRC contact you gives access to the lowest penalties: for domestic matters, a minimum of 0% for careless errors (15% if prompted), 20% for deliberate (35%) and 30% for deliberate and concealed (50%).

Worldwide Disclosure Facility (WDF)

The Worldwide Disclosure Facility is for disclosing tax due on income or gains connected with another country. You pay the tax, interest and any penalty. Offshore cases can also involve the Requirement to Correct penalties described in section 3, so take specialist advice first.

Let Property Campaign

The Let Property Campaign is for landlords with undeclared rental income from residential property. You disclose the income for the years the time limits allow, depending on your behaviour, and pay the tax, interest and penalties. See our UK landlord tax guide for the underlying tax.

Contractual Disclosure Facility (CDF / COP9)

The CDF is the disclosure route under Code of Practice 9 for people who have deliberately understated their tax. It can be offered by HMRC, or you can ask to be considered for it using form CDF1 without waiting for HMRC to contact you. The terms are described in section 2 above.

Digital Disclosure Service

For other unreported income or gains, HMRC's Digital Disclosure Service lets you notify HMRC and then make the disclosure online. The same Schedule 24 rules on unprompted disclosure apply.

8. Closure notice and appeals

Appeal to HMRC first

You appeal against a closure notice or assessment by writing to HMRC within 30 days (TMA 1970 s.31A). HMRC may then offer a statutory review, or you can ask for one; you get 30 days from the date of an offer to accept it or appeal to the tax tribunal (gov.uk: tax appeals).

Statutory review

HMRC must give the conclusions of a statutory review within 45 days, or another period you agree, and the review can uphold, vary or cancel the decision (s.49E). After the review you normally have 30 days to take the appeal to the tribunal (s.49G).

First-tier Tribunal (Tax Chamber)

You usually have 30 days from the date on your decision letter to appeal to the tribunal, using form T240 (gov.uk: appeal to the tax tribunal). The tribunal allocates cases to a category, from default paper cases decided on the documents to complex cases. The gov.uk tax appeals guide covers the whole process.

Upper Tribunal and onward

An appeal from the First-tier Tribunal to the Upper Tribunal (Tax and Chancery Chamber) is on a point of law and needs permission. You must ask the First-tier Tribunal for permission within 56 days of the date on its full written reasons (gov.uk). Further appeals, to the Court of Appeal (or Court of Session) and the Supreme Court, also need permission.

Alternative Dispute Resolution (ADR)

In Alternative Dispute Resolution an HMRC mediator trained in mediation works with you and the HMRC officer dealing with your case. Using ADR does not affect your right to appeal or to ask for a statutory review, and you can apply at any stage of an enquiry.

Paying while you appeal. An appeal does not by itself stop the tax being collected. You can apply to postpone payment of tax you believe is overcharged while the appeal is decided (TMA 1970 s.55). Interest still runs on tax that turns out to be due.

9. Reasonable excuse and behaviour

"Reasonable excuse" is a defence to many penalties, including late filing, late payment and failure to comply with an information notice. In Perrin v HMRC [2018] UKUT 0156 (TCC) the Upper Tribunal set out a four-step approach (para 81):

1. Establish the facts the taxpayer says give rise to a reasonable excuse.
2. Decide which of those facts are proven.
3. Decide whether, viewed objectively, those facts amount to a reasonable excuse, taking into account the taxpayer's experience and situation, and when it ended.
4. Decide whether the taxpayer put things right without unreasonable delay after the excuse ended.

The test is objective: an honest belief is not enough on its own, but the tribunal asks whether what the taxpayer did was reasonable for that taxpayer in those circumstances. The legislation itself rules out some excuses: an insufficiency of funds is not a reasonable excuse unless it is attributable to events outside your control, and relying on someone else is not one unless you took reasonable care to avoid the failure (for late payment, FA 2009 Sch 56 para 16(2)).

For Schedule 24 inaccuracy penalties the question is whether you took reasonable care, not whether you had a reasonable excuse. Relying on a competent adviser you gave full information to can amount to reasonable care. See our HMRC penalties guide.

10. Professional fee insurance and specialist advisers

Professional fee protection insurance

Many accountancy firms offer fee protection (often called tax investigation insurance), which pays the adviser's fees if HMRC open an enquiry. It does not pay the tax, interest or penalties. Premiums, cover limits and exclusions differ between policies, so read the wording; cover for matters you already knew about is commonly excluded.

Where to find a tax investigations specialist

The Chartered Institute of Taxation has a find a Chartered Tax Adviser directory, ICAEW a find a Chartered Accountant directory, and the Law Society a Find a Solicitor directory for cases with criminal risk. For people on lower incomes, TaxAid and the Low Incomes Tax Reform Group (LITRG) provide free help and guidance. Ask any adviser about their experience of HMRC enquiries and, where relevant, COP8 and COP9 cases.

11. Common triggers for enquiries

HMRC do not publish their risk rules, but they do publish the data they receive and the campaigns they run. Areas where HMRC have information to compare against returns include:

• Online selling and services. Digital platforms must collect and report details of sellers on their platform to HMRC (gov.uk: reporting rules for digital platforms).
• Offshore accounts and income. HMRC receive information about UK residents' overseas accounts under automatic exchange of information agreements such as the Common Reporting Standard. See our UK residence (SRT) guide.
• Cryptoassets. The Cryptoasset Reporting Framework requires cryptoasset service providers to report on users, and the UK has extended it to UK customers of UK businesses (HMRC consultation outcome). See our UK crypto tax guide.
• Rental income. HMRC's Let Property Campaign is aimed at landlords who have not declared rental income.
• Figures that do not fit. Large unexplained changes from year to year, or a lifestyle that declared income does not appear to support, can prompt questions.
• Reliefs and schemes HMRC are reviewing. Claims such as research and development relief, investment scheme reliefs and contractor arrangements (including IR35, where since April 2021 most medium and large clients decide status) are areas of HMRC compliance activity.

Related explainers and tools

• HMRC penalties guide (Sch 24, Sch 36, late filing, late payment)
• Self Assessment step-by-step guide
• UK residence (Statutory Residence Test) guide
• UK landlord tax guide
• UK crypto tax guide
• UK tax deadlines for 2026/27
• How UK tax works (primer)
• UK tax glossary A to Z
• SalaryTax methodology and sources

This page is editorial guidance based on HMRC publications and tax legislation checked on 1 October 2026. It is not tax advice. Rules change with each Finance Act, so check the current position on the linked gov.uk and legislation.gov.uk pages before relying on it. If HMRC have opened an enquiry, particularly under COP8 or COP9, take advice from a qualified Chartered Tax Adviser, accountant or solicitor with tax investigations experience. Where this guide differs from a primary source, the primary source governs.