What happens in an HMRC compliance check?

HMRC writes or phones, asks for records, checks your tax is right and closes the check. For a 2025-26 return filed on time, HMRC normally has 12 months from the day you filed to open an enquiry into it.

A compliance check is HMRC's name for checking that you paid the right amount of tax at the right time and claimed the right allowances and reliefs. When it starts one, it sends a factsheet called CC/FS1a, and this page follows that factsheet and the related law as checked on 16 October 2026. HMRC says that helping with the check lets it finish sooner and can reduce any penalty.

How a check usually runs

What HMRC may ask a tradesperson for

HMRC says it will tell you at the start what it needs. For a sole trader, that is usually the records behind your return: what came in, what went out and the proof of both. In practice that means bank statements, sales invoices, receipts for materials and tools, your van costs or mileage log, and, if you work under the Construction Industry Scheme (CIS), your monthly payment and deduction statements.

You must keep business records for at least 5 years after the 31 January deadline for the tax year. So records for 2025-26, with a return due by 31 January 2027, are kept until at least January 2032. HMRC also says it may look at information anyone can see online, such as websites, Companies House records and social media without privacy settings.

Time limits

The quarter days are 31 January, 30 April, 31 July and 31 October.

Your rights during the check

• You can be represented by anyone you choose. If HMRC writes to you, it sends them a copy.
• You can ask for more time if you have a good reason, such as serious illness or a death in the family.
• You can ask the officer why something is needed, or say a request seems unreasonable or not relevant.
• If you think the check should stop, tell HMRC why. If it disagrees, you may be able to ask the independent tribunal to decide.
• If HMRC is considering a penalty, you do not have to answer its questions about the penalty, and you can appeal.
• If your health or circumstances make it hard to deal with HMRC, tell the officer and ask for extra support.

An information notice is different from a request: HMRC's factsheet says you cannot ignore one, though safeguards apply. Keep sending returns and making payments that fall due during the check.

Penalties if something is wrong

If an error came about even though you took reasonable care, there is no penalty. Otherwise, the penalty is a percentage of the extra tax, set by what caused the error and whether you told HMRC before it found it.

The more you tell, help and give access, the lower the penalty within its range. HMRC's own example: a careless error it found, with £3,000 of extra tax and a 70% reduction for help given, gives a penalty rate of 19.5%, so a £585 penalty. A careless penalty can sometimes be suspended for up to 2 years. Interest is charged on tax paid late.

What this means for you

A check is mostly about paperwork. If your records are complete, the job is sending copies and answering questions. If you already know something is wrong, telling the officer everything straight away is what HMRC says gets you the largest reduction, and waiting 3 years or more usually limits it.

Steps when the letter arrives

1. Read the letter and the CC/FS1a factsheet. Note the reply date and the tax years involved.
2. Gather your bank statements, invoices, receipts, CIS statements and mileage records for those years.
3. If you cannot meet the date, tell the officer before it passes and ask for more time.
4. If you know something is wrong, tell HMRC all you know about it now.
5. Decide whether you want someone to represent you, and authorise them.
6. Keep filing and paying anything due while the check is open.
7. When the decision arrives, check it, and act within 30 days if you disagree.

Good records kept as you go make any check simpler. The free MTD check shows when Making Tax Digital starts for you, and the trades section has more guides for sole traders and CIS subcontractors.