How does HMRC decide who to investigate?

by | Oct 12, 2021

Arram Berlyn Gardner is a multi award winning firm of Chartered Accountants, Auditors, Tax and Business advisers based in the City of London with a team of tax experts that specialise in assisting clients with HMRC tax investigations including COP8 and COP9.  In this blog post our team take a look at how HMRC decide to who they should investigate and how.

There’s no doubt about it, the number of tax investigations continues to be on the increase as HMRC scrutinises companies and individuals alike.

Whether that’s down to the Treasury stepping up its efforts to close the tax gap, particularly after the pandemic, or automation speeding up the detection of potential cases, is anyone’s guess.

What we do know is tax investigations can be stressful, they can take a lot of time, and they can end up being costly for those involved.

Income tax, capital gains tax, corporation tax, the construction industry scheme, and the off-payroll working rules are all common targets.

After our tax cases of interest seminar, here’s what we know about how HMRC decides when to launch an investigation, and who it targets.

Random investigations

The tax authority has the power to delve into anyone’s tax affairs at any given time, regardless of the state of your accounts or any suspicion.

These random checks can be carried out on any kind of business or individual, and their frequency is on the increase if anything.

HMRC is currently keen to identify anyone who might have intentionally or unintentionally claimed emergency support during the pandemic.

Up to 31 March 2021, a total of 12,828  random checks were carried out on businesses HMRC suspected of abusing the business support schemes. At the same time, a further 5,020 self-employed income support claims were being probed.

While that’s a significant amount, you won’t have anything to worry about as long as you’ve been keeping your accounts carefully and consistently.

Aspect & full investigations

If you submit a tax return and HMRC suspects there to be an error in it, an aspect enquiry might be launched to dig a little deeper.

This will look into a particular part of your accounts where HMRC suspects an error in an attempt to uncover tax evasion.

More often than not, however, aspect enquiries are triggered by genuine mistakes, particularly among taxpayers who handle their own affairs.

If HMRC starts an aspect investigation but suspects more widespread issues, it might reclassify it as a full enquiry.

The tax authority’s specialist investigators would take a comprehensive review of your accounts, including both business and personal records.

Voluntary disclosures

Your tax error might qualify for an HMRC amnesty, in which case you can disclose your tax irregularity in good faith.

Alternatively, the best way to make a disclosure is via HMRC’s Digital Disclosure Service. From the moment HMRC receives notification of your intention to make a disclosure, you will have 90 days to disclose in full.

If you decide to approach HMRC, it should be done in a managed way by a specialist like us who will handle your relationship with HMRC all the way through until closure.

Let ABG handle HMRC

At ABG, our offers to take this off of your plate if you ever happen to come onto HMRC’s radar.

By signing up to our subscription service, we will represent you in the event of an HMRC investigation, with zero excess and £100,000 fees indemnity.

If you would like to confidentially discuss how ABG can assist you, email, call us on 020 7330 0000.


HMRC launches 13,000 investigations into potential Covid support scheme fraud



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