The letter calls it a compliance check. It does not mention the six years behind it.

It arrives in a brown envelope and it is polite. HMRC is "carrying out a compliance check into your Self Assessment tax return for the year ended 5 April 2025", would like to see some records, and would be grateful for a reply within 30 days.

What the letter does not say is that a single year's enquiry routinely becomes a six-year one, that the amount at stake is rarely the tax alone, or that almost everything that determines the final number is decided in the first three weeks by how you respond.

What HMRC has actually opened

There are two different things that both get called a compliance check, and they behave completely differently.

A section 9A enquiry is the formal one. HMRC must give notice within 12 months of the date your return was delivered. File your 2024/25 return on 14 December 2025 and the window closes on 14 December 2026. File late and the window is extended to the next quarter day — 31 January, 30 April, 31 July or 31 October — after the first anniversary of the day the return went in. Once notice is given, HMRC can examine anything in that return, whether the letter mentions it or not. An enquiry described as being about your motor expenses is not legally confined to your motor expenses.

A nudge letter is the informal one, and it is far more common. It says HMRC holds information suggesting your return may be wrong, invites you to check, and encloses a certificate to sign. No enquiry has been opened, no statutory clock is running, and signing a certificate of tax position confirming everything is correct when it is not can convert a careless error into a deliberate one. Read the top of the letter carefully to see which you have.

The clock that runs backwards

The 12-month window only governs the year HMRC has formally opened. Earlier years are reached through a discovery assessment, and the time limits there depend entirely on behaviour:

• 4 years from the end of the tax year where the return was simply wrong and nobody was careless.
• 6 years where the loss of tax was brought about carelessly.
• 20 years where it was brought about deliberately.

This is why the answer you give in the first letter matters so much. If the same expense claim appears in five consecutive returns, HMRC does not need to open five enquiries. It opens one, decides the behaviour, and assesses the rest. The conversation about whether an error was careless is therefore not an abstract argument about words. It is an argument about how many years are in scope and what percentage sits on top.

Information notices, and why 30 days is not really 30 days

HMRC will usually ask informally first. If you do not produce the records, it can issue a Schedule 36 information notice requiring them. Failing to comply carries an initial penalty of £300, followed by daily penalties of up to £60 for each day the failure continues.

You can appeal an information notice, but not the parts that ask for your statutory records — those are not appealable, because you were required to have them anyway. Sole traders must keep business records for at least five years after the 31 January submission deadline for the year concerned. Records for 2024/25, due on 31 January 2026, must therefore survive until 31 January 2031. Failure to keep them carries its own penalty of up to £3,000 per year.

The practical point is simpler than the law. An enquiry where the records are complete and produced quickly tends to end in months. One where the records have to be reconstructed from bank statements tends to end in years, and the reconstruction itself invites HMRC to estimate.

How the penalty is worked out

Penalties for an inaccurate return are a percentage of the extra tax, and the percentage is set by two things: what HMRC decides about your behaviour, and how much you help.

• Careless — maximum 30%, reduced to as low as 0% for an unprompted disclosure, or 15% for a prompted one.
• Deliberate but not concealed — maximum 70%, minimum 20% unprompted, 35% prompted.
• Deliberate and concealed — maximum 100%, minimum 30% unprompted, 50% prompted.

A disclosure is unprompted only if you had no reason to believe HMRC had discovered the problem or was about to. The moment the letter lands, everything you say afterwards is prompted. That single distinction is frequently worth more than the tax.

Within each band, the reduction depends on three things HMRC scores separately: telling (admitting the error and explaining how it happened), helping (doing the work to quantify it rather than making HMRC do it), and giving access (producing records without being chased). Careless penalties can also be suspended for up to two years against conditions designed to stop it happening again — putting proper bookkeeping in place, for instance. If the conditions are met, the penalty is cancelled. Suspension is not offered as often as it could be asked for.

Worked example: the van, the lunches and the six years

The figures are illustrative but the shape is entirely ordinary. A self-employed plumber declares a profit of £52,000 for 2024/25. HMRC opens an enquiry and looks at two things.

The van is claimed at 100% business use. The mileage log does not exist, and the bank statements show fuel bought near a holiday cottage in August. HMRC proposes a 30% private restriction: £6,400 added back. Separately, £1,900 of subsistence has no receipts and no explanation of why the travel was outside the normal pattern of work. It is disallowed in full.

Then HMRC asks the obvious question: was the van claimed the same way in earlier years? It was. Because the behaviour is careless, the discovery window is six years, and HMRC assesses 2022/23 and 2023/24 on the same basis.

The claim saved roughly £3,500 a year in tax. Recovered with penalties and interest, it costs about £13,600 — and that is the good version, where the taxpayer co-operated fully and the behaviour was accepted as careless. Had HMRC concluded the mileage claim was deliberate, the window would be 20 years and the minimum penalty 35%.

Ending it, and disagreeing with it

An enquiry formally ends when HMRC issues a closure notice stating its conclusions and amending the return. If it drags on without progress, you do not have to wait: you can apply to the First-tier Tribunal for a direction that HMRC issue a closure notice, and HMRC then has to justify why it needs longer. That application is under-used and it changes the tempo of a stalled case.

If you disagree with the conclusion or the penalty, you have 30 days to appeal. You can then ask for an internal statutory review by an officer not involved in the case, which is free and often resolves technical disagreements, or go straight to the tribunal. Alternative dispute resolution is also available and works well where the disagreement is about facts and evidence rather than law — typically the exact private-use percentage rather than whether private use is disallowable.

One thing worth knowing before you start: tax charged by a closure notice is generally payable even while an appeal is running, unless you apply to postpone it. Ask for postponement at the same time as the appeal, not afterwards.

Why this is about to get more common

Making Tax Digital for Income Tax began on 6 April 2026 for sole traders and landlords with qualifying income over £50,000, and it changes what HMRC can see. Instead of one figure a year, HMRC receives quarterly updates and digital records kept as you go. Inconsistencies that used to be invisible — a quarter with no purchases, a category that moves sharply, figures that do not reconcile to the final declaration — are now visible in something close to real time. Our guide to Making Tax Digital for sole traders covers what has to be filed and when.

What to do this week

1. Check whether you have an enquiry or a nudge letter. Look for a reference to section 9A. Do not sign a certificate of tax position without advice.
2. Diarise the deadline in the letter and reply inside it, even if only to confirm receipt and ask for a reasonable extension. Silence is what turns a manageable case into an information notice.
3. Pull the records for the year in question before you answer anything: bank statements, invoices, receipts, mileage records and the bookkeeping file.
4. Look at the same item in the two or three years either side. If the error is repeated, know that before HMRC tells you, because volunteering it is what supports a lower penalty.
5. Answer the question actually asked. Volunteering unrelated information widens the enquiry.
6. Ask, in writing, what HMRC's view of the behaviour is and why. If it says careless, ask whether the penalty can be suspended against conditions.
7. Work out whether you can pay. If not, a Time to Pay arrangement is far easier to agree before enforcement starts than after — our post on what to do when you cannot pay a Self Assessment bill sets out how.
8. Fix the underlying record-keeping now. It is both the fastest route to a suspended penalty and the reason the next enquiry does not happen.

Most of what makes an enquiry expensive is avoidable, and almost all of it is about evidence rather than argument. A mileage log costs nothing. Reconstructing five years of one from bank statements costs a great deal. Our guide to allowable expenses for sole traders sets out what can be claimed and what has to be apportioned, and the post on vehicle costs and the mileage rate covers the single item that starts more enquiries than any other.

Where we help

We handle the correspondence, decide with you what has to be conceded and what should be defended, argue the behaviour and the disclosure reductions rather than accepting HMRC's opening view, and push for suspension where a careless penalty can be conditioned away. Where earlier years are in scope, we quantify them before HMRC does, because a volunteered figure is treated very differently from a discovered one. Fixed monthly fees from £19 + VAT a month. Get started.