HMRC and Companies House Investigations

Types of Investigations

HMRC calls most of its enquiries a compliance check. In everyday use these are called tax investigations or enquiries. A check does not mean the client has done anything wrong. Many end with no change, or with an error corrected by agreement.

Companies House works differently: it is the registrar of companies, so its “investigations” are about the accuracy, completeness and timeliness of what is on the public register, and they can lead to penalties, removal of information, strike-off or prosecution.

1.1 Types of HMRC investigation

HMRC does not have fixed list. In practice the checks fall into the 13 types below.

#	Type	What it means	Mostly applies to
1	Random check	Client is picked at random, with no suspicion of error. Used by HMRC to measure the tax gap. Treated exactly like any other check once opened.	SA, CT600, VAT, PAYE
2	Aspect enquiry	HMRC queries one or two items only, for example expenses, a loan account, or one sales figure.	SA, CT600, VAT
3	Full enquiry	HMRC examines the whole return and all supporting records for the period. The most detailed type.	SA, CT600
4	Risk-based (intelligence-led) check	Opened because HMRC systems flag a risk: unusual ratios, late filing, repeated errors, or data that does not match.	All taxes
5	Information request / record check	Written request for documents or information under HMRC’s statutory information powers, sometimes without a formal enquiry into a return. May include checks that records are being kept properly.	All taxes
6	Visit and inspection	HMRC visits the business premises. Can be pre-arranged, unannounced, or unannounced with tribunal approval.	VAT, PAYE, CIS, CT600, SA (self-employed)
7	Data-matching and “nudge” campaigns	HMRC compares its own data with third-party data (banks, platforms, land registry, overseas data) and writes to groups of taxpayers inviting them to review their returns.	SA, CGT, VAT, CT600
8	Employer compliance review	Review of payroll: PAYE, NIC, RTI submissions, P11D benefits, National Minimum Wage, employment status, CIS deductions.	PAYE, CIS, NIC
9	VAT visit, credibility check and repayment check	Review of VAT records, or a hold on a repayment return while HMRC checks the claim is genuine.	VAT
10	Specialist and technical checks	Teams focused on one area: R&D relief, transfer pricing, large and complex businesses, offshore matters, wealthy individuals, tax avoidance schemes, Construction Industry Scheme, Digital Services Tax.	CT600, SA, others
11	Fraud Investigation Service civil investigations (COP8 / COP9)	COP8 is generally used for civil investigations into serious avoidance or other non-compliance where HMRC is not pursuing a criminal investigation at that stage. COP9 is used where HMRC suspects tax fraud and may offer the Contractual Disclosure Facility (CDF). The recipient normally has 60 days to accept or reject the offer; if accepted, the person must make the required disclosures. The protection from criminal investigation is conditional and limited to the disclosed tax fraud and the person who enters the contract; it does not bind other authorities.	All taxes
12	Criminal investigation	Handled by HMRC’s Fraud Investigation Service. Can involve arrest, search of premises, seizure of records and prosecution. Used for serious evasion, VAT fraud, payroll fraud and similar.	All taxes
13	Anti-money laundering supervision check	HMRC supervises many accountancy service providers under the Money Laundering Regulations 2017. It can inspect the firm’s risk assessment, client due diligence files, training and MLRO arrangements.	Accountancy firms

1.2 Types of Companies House investigation

Companies House (the Registrar of Companies) has had much stronger powers since the Economic Crime and Corporate Transparency Act 2023 (ECCTA). It can now query, challenge and remove information, issue civil financial penalties and share data with HMRC, the Insolvency Service and law enforcement. In practice its work falls into the 10 types below.

#	Type	What it means	Applies to
1	Registrar’s query	Companies House queries information that looks wrong, inconsistent or suspicious and can require the company to supply evidence.	Any company filing
2	Annotation, rectification or removal of information	Action where accounts, confirmation statements or other forms are late or missing. Late accounts normally attract an automatic civil penalty; late confirmation statements can also result in financial penalties. Failure to file required documents may be a criminal offence and can lead to strike-off.	Officers, PSCs, addresses, incorporation documents
3	Late or non-filing enforcement	Action where accounts, confirmation statements or other forms are late or missing. Late accounts normally attract an automatic civil late-filing penalty. Failure to file accounts or a confirmation statement can also be a criminal offence and may lead to strike-off; separate financial penalties may apply to late confirmation statements.	Accounts, confirmation statement, change forms
4	Strike-off enquiry (compulsory and expedited)	The Registrar writes to a company it believes is not carrying on business, or that was registered on a false basis or with an inappropriate address, and can strike it off the register.	Dormant or defunct companies, false or no address
5	Registered office, address and email compliance	Checks that the registered office is an appropriate physical address in the correct UK jurisdiction and that a registered email address is provided and monitored. If the registered office is not appropriate, the Registrar may move it to a default address and may start strike-off steps if the company does not correct it.	All companies
6	Identity verification, officer and PSC checks	Identity verification became a legal requirement from 18 November 2025. New directors must verify when appointed/incorporated. Existing directors provide their personal code with the relevant confirmation statement during the 12-month transition period; PSC timing depends on their role and appointed day. The 12-month period runs from 18 November 2025, but individual deadlines are role-specific. Verification requirements for filing presenters, limited partnerships, corporate directors and certain corporate roles are being phased in later; check current Companies House guidance.	Directors, PSCs, LLP members, filing agents (ACSP)
7	Accounts review	Accounts delivered are checked for compliance with the Companies Act (missing items, wrong format, misuse of micro-entity or dormant status). Bodies such as the Financial Reporting Council also review the accounts of public and large companies.	Statutory accounts
8	False filing investigation and prosecution	Investigation of knowingly or recklessly providing false, deceptive or misleading information to the Registrar, an offence under the Companies Act 2006.	Any filing
9	Director disqualification and Insolvency Service referral	Companies House refers cases to the Insolvency Service, which can investigate companies in the public interest, seek disqualification of directors and petition to wind up a company.	Directors and companies in serious cases
10	Overseas entity and limited partnership checks	Checks on the Register of Overseas Entities (beneficial ownership and verification) and on limited partnerships.	Overseas entities, limited partnerships

HMRC Investigations by Return Type

For each main filing: checks used, triggers, what HMRC asks for and common problems.

2.1 Corporation Tax (CT600)

Area	Detail
Types of check used	Random, aspect and full enquiries; risk-based checks; R&D and transfer pricing reviews; Schedule 36 requests; discovery assessments
Main triggers	Large or unusual expenses; low profit for the sector; director’s loan and Section 455 issues; big AIA, R&D, loss or group relief claims; mismatches between accounts, CT600, VAT and payroll; late filing
What HMRC asks for	Accounts, tax computation, trial balance and ledger; bank statements; invoices; fixed asset register; director’s loan account and dividend papers
Common problems found	Private expenses; director’s loan errors; capital versus revenue errors; unsupported R&D claims; omitted income
Time limits and records	For a company tax return, the normal enquiry window is generally 12 months from the date the return is delivered, subject to statutory exceptions and the company’s circumstances. Discovery assessment limits are generally 4 years, 6 years for careless loss of tax and 20 years for deliberate behaviour or certain failures to notify. Keep records for at least 6 years after the end of the accounting period, and longer where an enquiry or other rule requires it.
Possible outcome	No change, amended CT600, extra tax with interest, and penalties

2.2 VAT

Area	Detail
Types of check used	Inspection visits; credibility checks on repayments; registration and record checks; scheme checks; fraud investigations
Main triggers	Large or first-time repayment claims; sudden sales changes or sales just below the registration threshold; input tax on non-compliant suppliers; mismatches with accounts and CT600 or SA turnover; late or repeated nil returns
What HMRC asks for	VAT account and returns; sales and purchase invoices; import and export documents; bank and till records; MTD software records
Common problems found	Input tax without a valid invoice; wrong VAT rate or exemption; private use errors; reverse charge not applied; partial exemption errors
Time limits and records	The normal assessment time limit is generally 4 years; longer limits can apply in cases involving careless or deliberate behaviour and other statutory exceptions. For correcting VAT return errors, a net error can usually be adjusted on the next return only if it is no more than the greater of £10,000 or 1% of the Box 6 figure, capped at £50,000. Errors above that limit and deliberate errors must be notified separately. Keep VAT records generally for 6 years, subject to specific exceptions.
Penalties	Inaccuracy, late submission and late payment penalties; civil evasion penalty; interest; prosecution in serious cases

2.3 Self Assessment (SA100 and supplementary pages)

Area	Detail
Types of check used	Random, aspect and full enquiries; nudge letters; risk-based checks; discovery assessments; offshore and wealthy individual checks
Main triggers	Income not matching bank, employer, platform or property data; self-employed turnover near the VAT threshold; large expense or motor claims; unreported rental income or gains (shares, crypto, UK property); residence and overseas income issues
What HMRC asks for	Bank statements, sales and expense records; rental and mortgage documents; broker and crypto statements; pension and charity payment evidence
Common problems found	Undeclared income; personal costs claimed as business expenses; capital items treated as revenue; wrong property finance cost claims
Time limits and records	A formal enquiry normally has to be opened within 12 months of the date the return was delivered, subject to statutory exceptions. Discovery assessment limits are generally 4 years, 6 years for careless behaviour, 20 years for deliberate behaviour or certain failures to notify, and up to 12 years for qualifying offshore matters/transfers. Self-employed people and landlords must generally keep records for at least 5 years after the 31 January filing deadline for the relevant tax year; longer retention may be required if an enquiry is ongoing.
Making Tax Digital for Income Tax	From 6 April 2026, Making Tax Digital for Income Tax applies to sole traders and landlords with qualifying income over £50,000, based on the relevant qualifying income test. They must keep digital records and send quarterly updates, with a final declaration. The rollout is staged, so check the current HMRC guidance for later income thresholds and start dates.

2.4 PAYE, RTI, NIC and employer obligations

Area	Detail
Types of check used	Employer compliance reviews; RTI checks; NMW and NLW enforcement; employment status and IR35 review; P11D and expenses review; PAYE determinations and NIC decisions
Main triggers	Late or missing FPS or EPS; pay below minimum wage; contractors treated as self-employed when they are workers or employees; unusual director pay; unreported benefits; whistleblower complaints; payroll and accounts mismatches
What HMRC asks for	Payroll records, payslips, P60s, P45s, P11Ds and RTI submissions; contracts, timesheets and bank statements; expense policy and receipts; contractor invoices
Common problems found	Under-deducted PAYE and NIC; benefits and expenses outside the exemptions; wrong employment status; NMW miscalculations; late RTI or payment
Time limits and records	PAYE record-retention rules generally require employers to keep payroll records for 3 years from the end of the tax year they relate to. Other taxes, minimum-wage rules, statutory payments, data protection or an ongoing enquiry may require different or longer retention. Do not apply a blanket 4/6/20-year assessment rule to every PAYE issue; check the specific tax and statutory provision.
Possible outcome	Extra PAYE and NIC with interest, penalties, NMW arrears and penalty, and naming of employers in serious NMW cases

2.5 Construction Industry Scheme (CIS)

Area	Detail
Types of check used	Contractor compliance review; subcontractor verification and gross payment status review; monthly return checks
Main triggers	Late or missing returns; wrong deduction rates; gross payment status held without meeting the tests; unverified subcontractors
Possible outcome	Penalties, loss of gross payment status, extra deductions payable by the contractor

2.6 Other HMRC areas

Area	Types of investigation and checks
Capital Gains Tax (including UK property 60-day returns)	Land Registry and share data-matching; valuation checks; relief claims (Private Residence Relief, Business Asset Disposal Relief); nudge letters.
Stamp Duty Land Tax	HMRC enquiry into an SDLT return is generally possible within 9 months of the return being delivered, subject to statutory exceptions. Checks may cover reliefs, rates, property details and linked transactions.
Inheritance Tax	Valuation checks; Business and Agricultural Property Relief; lifetime gifts and trusts.
R&D tax relief	Dedicated compliance team; pre-claim notification; enquiries into project eligibility and costs; heavy penalties for careless or deliberate claims.
Transfer pricing, large business and offshore	Business Risk Review for large groups; Senior Accounting Officer checks; transfer pricing, Corporate Interest Restriction and offshore reviews.
Tax avoidance schemes	DOTAS checks, accelerated payment notices and General Anti-Abuse Rule counteraction; promoters and users are both targeted.
Customs, import VAT and other specialist areas	Post-clearance customs audits; import VAT and duty checks; Digital Services Tax, Apprenticeship Levy and Gift Aid checks.
Anti-money laundering supervision and adviser conduct	Visits, document requests, client file reviews, penalties and public naming for supervised accountancy providers. HMRC also checks advisers who facilitate errors.

Companies House Investigations in Detail

3.1 Each type of Companies House investigation

Type	Typical triggers	What happens	Possible outcome
Registrar’s query	Suspicious or inconsistent officer, PSC or address details	Query to company; evidence required by deadline	Information accepted, corrected or removed; penalty if no reply
Annotation, rectification, removal	Late accounts or confirmation statements; other changes not notified within the deadline that applies to the particular change	Late accounts normally trigger an automatic civil penalty. Failure to file accounts or a confirmation statement can be a criminal offence; separate confirmation-statement penalties and strike-off action may apply.	Corrected register; action against whoever filed it
Late or non-filing enforcement	Late accounts or confirmation statement; changes not notified within 14 days	Automatic penalties; warnings and notices	Escalating penalties, prosecution, strike-off
Compulsory and expedited strike-off	Inappropriate registered office address or failure to provide/maintain a registered email address	The Registrar may move an inappropriate registered office to a default address. If the company does not provide an appropriate replacement within the required period, strike-off steps may follow. A registered email address must be provided and monitored.	Dissolution; assets pass to the Crown; possible restoration
Registered office, address and email	PO box or unconnected address; no registered email	Registrar can set a default address and start strike-off	Corrected address, penalty, strike-off
Identity verification, officer and PSC checks	Unverified director, PSC or filing presenter; deceased or disqualified officer shown	Compliance warnings; rejected filings	Penalties; disqualification referral
Accounts review	Missing notes; wrong micro-entity or dormant status; wrong format	Companies House or FRC writes to company or auditor	Revised accounts; penalties for late amendments
False filing investigation	Fake directors, forged signatures, hijacked companies	Investigation; referral to Insolvency Service and police	Prosecution, fine, imprisonment, disqualification
Director disqualification and Insolvency Service	Serious or repeated breaches; sham directors	Insolvency Service investigates; may seek disqualification or winding up	Disqualification (up to 15 years), liquidation, compensation orders
Overseas entity and limited partnership checks	Unregistered or unverified overseas entity; missing ownership information	Information requests and enforcement	Penalties, land dealing restrictions, strike-off, prosecution

3.2 Offences commonly linked to Companies House filings

Providing false or misleading information to the Registrar, or filing without the company’s authority.
Filing accounts or confirmation statements late, or failing to notify changes in time.
Acting as a director while disqualified, or appointing a disqualified person.