Aug 31

2026

HMRC has opened a compliance check: what your finance team should do first

An HMRC compliance check allows HMRC to review your tax position to confirm that the right tax has been paid at the right time and that claims, allowances and reliefs are correct. An opening letter does not automatically mean HMRC has concluded anything is wrong. The priority is to understand the scope, preserve records and respond accurately within the stated timetable.

What kind of check has actually landed

HMRC’s About compliance checks factsheet, CC/FS1a applies to taxes including Corporation Tax, Income Tax, PAYE and VAT. HMRC may conduct checks by phone, in writing or through visits. It should tell you what it is checking and the risks being addressed, although it does not have to explain how the case was selected.

A check into a large or complex business may instead fall under CC/FS1c, where HMRC may work through a Customer Compliance Manager.

Schedule 36 notices can carry penalties for non-compliance, while unannounced inspections require prior authorisation by an authorised HMRC officer.

The first five days

• Read the letter carefully and note the tax, period, questions and response deadline.
• Identify who holds the accounting records, contracts, invoices, payroll data and supporting evidence.
• Do not make a rushed amendment simply because a check has started. Review the position first.
• Continue filing returns and paying taxes that fall due. HMRC says normal filing and payment obligations continue during a check.
• Involve your accountant or tax adviser early. Our tax investigation and dispute support team can help organise evidence and manage communications before positions are committed to writing.

Cooperation can affect penalties

If HMRC identifies an inaccuracy and a penalty is due, the reduction can depend on the quality of disclosure: telling HMRC what happened, helping it establish the position and giving access to relevant records.

A disclosure made after HMRC has opened a check will usually be treated as prompted, not unprompted. However, early and complete cooperation can still improve the reduction available. Reliable monthly management accounts and organised records make the figures easier to explain. Where an error is identified, our SME business advisory team can help correct the underlying process as well as the immediate issue.

If a dispute develops

You can challenge HMRC decisions through the relevant review and appeal routes. For certain statutory enquiries into returns, a taxpayer can also apply to the First-tier Tribunal for a direction requiring HMRC to issue a partial or final closure notice. Our forensic accounting and expert witness team can support matters requiring financial evidence.

If a check exposes a tax liability the business cannot pay, address the cash-flow issue separately and quickly. Our business recovery and restructuring team can assess working capital, creditor pressure and available options.

The position in the Republic of Ireland

Revenue’s Code of Practice for Revenue Compliance Interventions uses three graduated levels. Level 1 supports self-review, self-correction and unprompted qualifying disclosures. Level 2 includes Risk Reviews and Audits and can allow a prompted qualifying disclosure before the intervention begins. Level 3 is a Revenue Investigation focused on high-risk cases, including suspected fraud or tax evasion; once notified, a qualifying disclosure is no longer available.

For businesses operating in both jurisdictions, our cross-border accounting and tax specialists can help identify which framework applies. Strong digital records also matter as Making Tax Digital expands.

If HMRC or Revenue has opened a check into your business, talk to SCC Chartered Accountants before you send a substantive response. A clear, timely and well-supported first reply can help keep the process focused.