Already Under HMRC Investigation?

Being under investigation can feel stressful and confusing. Here are the most common questions people ask when HMRC is reviewing their tax affairs.

What does it mean if I’m already under HMRC investigation?

If HMRC is investigating you, it means they’ve identified potential issues in your tax affairs. This could be due to errors, unfiled returns, missing payments, suspected avoidance, or suspected fraud.

Being under investigation does not automatically mean wrongdoing, but HMRC will review your records carefully to determine whether any tax is owed or whether further action is required.

How did HMRC find me?

Common ways HMRC discovers issues include:

• Data-matching from submitted returns, banks, or third-party reports
• Large gaps or failure to submit tax returns
• Use of marketed or offshore tax schemes
• Lifestyle and spending patterns that don’t match reported income
• Whistleblower tips or information from other authorities

Even years-old unfiled returns or irregularities can trigger an investigation.

What happens during an HMRC investigation?

During an investigation, HMRC will:

• Request detailed financial records
• Review bank accounts, contracts, invoices, and correspondence
• Compare lifestyle and declared income
• Ask questions to clarify discrepancies
• Determine if any tax has been underpaid, or if any penalties are due

Investigations can be civil general enquiries (or COP8-style) or fraud-related (COP9-style), depending on the severity of the issue.

How long does an HMRC investigation take?

The length depends on the complexity of your tax affairs and how cooperative you are:

• Simple cases may resolve in a few months
• Complex or multi-year cases can last 12–36 months or longer
• Offshore accounts, large undeclared income, or multiple companies can increase duration

Important: Even if you respond quickly, HMRC will require full preparation of documents and detailed accounting records. Gathering and organising these records can take significant time, especially for historical years or complex structures.

Being organised, responsive, and ready with all required records by our professionals can speed up the process, but preparation itself is a major factor in how long the investigation takes.

Do I need a specialist tax adviser?

Absolutely. Our specialist experienced in HMRC investigations is essential. We can:

• Help you understand the investigation scope
• Gather and present records properly
• Communicate with HMRC on your behalf
• Negotiate penalties or settlements
• Reduce the risk of escalation to criminal proceedings

Even if you think your case is minor, professional help makes a big difference.

Can HMRC prosecute me if I’m already under investigation?

It depends:

• If the investigation is civil (COP8-style), prosecution is unlikely unless dishonesty is discovered.
• If HMRC finds evidence of deliberate concealment or fraud (COP9-style), criminal action may follow.
• Full transparency and cooperation reduce the likelihood of prosecution.
• What should I do if I’m already under investigation?
• Do not ignore HMRC — respond promptly.
• Gather all records, including past returns, bank statements, invoices, and correspondence.
• Engage a specialist adviser immediately.
• Avoid making any misleading statements — honesty is crucial.
• Consider whether entering the Contractual Disclosure Facility (CDF) or other disclosure scheme applies.

What happens if I have missing or late tax returns?

Gaps in filing or unsubmitted returns are a major red flag. HMRC may calculate tax owed plus interest and penalties. Even if you missed returns unintentionally, prompt disclosure and regularisation can prevent escalation.

Can HMRC investigate past years?

Yes. HMRC can review up to 6 years for routine investigations, or 20 years in cases of suspected fraud. This is why even historical omissions or mistakes can trigger scrutiny.

Can I settle and close the investigation?

Yes, in most cases:

• If it’s civil (COP8-style), you can agree on tax owed, interest, and penalties
• If fraud is suspected (COP9-style), the CDF allows full disclosure and immunity from prosecution

The key is full transparency, cooperation, and our professional advice