Why HMRC Enquiries Are Increasing – And How to Stay Off Their Radar

Posted: 15 April 2026

Many clients assume that HMRC enquiries are random.

In reality, they are becoming increasingly data-driven, targeted, and sophisticated — and we are seeing a noticeable rise in activity as HMRC makes greater use of digital tools.

Understanding how HMRC selects cases — and what you can do to reduce your risk — is now an important part of managing your tax affairs.

Why Are Enquiries Increasing?

There are several factors driving the increase:

1. Greater use of digital data

HMRC now has access to more information than ever before, including:

• bank interest data;
• employment and benefits records;
• property income and transaction data;
• international information exchanges.

This allows HMRC to cross-check tax returns more effectively and identify inconsistencies.

2. Making Tax Digital (MTD)

The move towards quarterly reporting and digital records gives HMRC more frequent visibility over taxpayers’ affairs.

While MTD is designed to improve accuracy, it also means:

• more data points;
• more opportunities for discrepancies to arise.

3. Increased focus on compliance yield

HMRC continues to prioritise investigations that generate additional tax revenue, particularly where patterns suggest under-reporting.

Common Triggers for HMRC Enquiries

Enquiries are rarely random. In most cases, they are prompted by specific indicators.

Some of the most common triggers we see include:

Inconsistencies in reporting

• differences between declared income and third-party data;
• irregular fluctuations in profit levels.

Lifestyle vs declared income

• significant asset purchases (e.g. property);
• expenditure that appears inconsistent with reported earnings.

Errors in returns

• repeated mistakes;
• unusual or aggressive claims.

Late or amended filings

• frequent corrections or delays can attract attention.

Sector-specific risk

• certain industries are subject to greater scrutiny.

How to Reduce Your Risk

While enquiries cannot be eliminated entirely, there are clear steps you can take to reduce your exposure.

1. Maintain Accurate, Real-Time Records

With digital reporting becoming the norm, record-keeping is more important than ever.

Ensure:

• records are complete and up to date;
• transactions are correctly categorised;
• supporting documentation is retained.

2. Be Consistent

Consistency is key.

Large fluctuations in income or expenses are not necessarily a problem — but they should be explainable and supported by evidence.

3. Avoid “Estimated” Figures

HMRC systems are increasingly effective at identifying anomalies.

Using estimated or rounded figures without a clear basis can increase the likelihood of enquiry.

4. Review Before You Submit

Simple errors remain one of the most common causes of enquiry.

A structured review process before submission can significantly reduce risk.

5. Take Advice on Complex Areas

Areas such as:

• property income;
• share transactions;
• international matters.

are more likely to attract scrutiny if not handled correctly.

If HMRC Does Open an Enquiry

An enquiry does not necessarily mean something is wrong — but how you respond is critical.

Early, clear and well-supported responses can:

• reduce the scope of the enquiry;
• minimise disruption;
• help bring matters to a quicker resolution;
• reduce penalties.

How We Can Help

We support clients both in reducing the risk of enquiry and in managing HMRC interactions where they arise.

This includes:

• reviewing returns before submission;
• advising on record-keeping and systems;
• handling HMRC correspondence;
• managing enquiries from start to resolution.

Final Thought

As HMRC becomes more data-driven, the nature of enquiries is changing.

The focus is no longer just on correcting mistakes — but on identifying patterns and inconsistencies.

Good record-keeping and proactive review are now your best defence.

Contact partners@rjp.co.uk

RJP LLP – Insight that goes beyond compliance