HMRC compliance check on your company tax return: what happens?

In short: A compliance check, sometimes called a tax enquiry, is HMRC checking that a Company Tax Return (CT600) is right. For a return filed on time, HMRC must give written notice within 12 months of the day it was delivered (FA 1998 Sch 18 para 24). HMRC then asks for records, closes the check in writing, and penalises only careless or deliberate errors (HMRC factsheet CC/FS7a). Taxley prepares and files the CT600 for £39.95 with micro-entity accounts, keeps a copy of everything it filed for you to download, and files the accounts at Companies House once the return is paid and the accounts are finished.

Filing next year's return yourself? Take the 30-second check to see whether Taxley fits your company.

Key facts (checked on 8 October 2026)

What is an HMRC compliance check on a company tax return?

It is HMRC checking a company's tax position to make sure it pays the right tax at the right time and gets the right reliefs (HMRC factsheet CC/FS1a). For a filed CT600, the formal version is an enquiry under the Finance Act 1998: HMRC writes to the company, asks for information and closes the check in writing.

GOV.UK gives examples of what can prompt a check, such as figures that seem wrong or little tax declared on high turnover (GOV.UK: HMRC compliance checks), and HMRC's system also picks some company returns at random for a full enquiry (HMRC manual COM71001). Internally HMRC calls an enquiry "full" when it covers all the significant risks in a return and "aspect" when it looks at one or more matters, but its manual says the law makes no distinction (HMRC manual EM0092).

How long does HMRC have to open an enquiry into a CT600?

Twelve months from the day HMRC received the return, if the company filed it on or before its filing date. For a late return, or a return the company has amended, HMRC has until the quarter day (31 January, 30 April, 31 July or 31 October) after the first anniversary of filing or amending.

Those rules are in FA 1998 Sch 18 para 24. For a member of a group that isn't a small group, the 12 months run from the statutory filing date instead of the day the return arrived, and a notice counts as given by a date only if the company receives it by then (HMRC manual EM1510). Our guide on whether HMRC has received your CT600 explains how to show the delivery date.

What does the timeline look like for a return filed on 10 November 2026?

Take a stand-alone company, not in a group, with a 12-month accounting period ending 31 December 2025, that files its CT600 on 10 November 2026, before its 31 December 2026 deadline. HMRC can open an enquiry until 10 November 2027, and a discovery assessment can reach to the end of 2029, 2031 or 2045.

The working: tax is due 9 months and 1 day after the period ends (GOV.UK: Pay your Corporation Tax bill), so 31 December 2025 plus 9 months is 30 September 2026, plus 1 day is 1 October 2026. The return is due 12 months after the period ends, on 31 December 2026 (GOV.UK: Company Tax Returns). The enquiry window is 10 November 2026 plus 12 months, 10 November 2027. The company's own amendments must be made within 12 months after the filing date, by 31 December 2027 (FA 1998 Sch 18 para 15). Records must be kept until the sixth anniversary of the period end, 31 December 2031, or later until any enquiry ends (FA 1998 Sch 18 para 21). Had the return been filed late, on 8 February 2027, the first anniversary would be 8 February 2028 and the window would close on the next quarter day, 30 April 2028.

What should you do first when HMRC's letter arrives?

Read what HMRC wants and by when, check that the letter is genuine, and keep filing and paying as normal. Then gather the filed CT600, accounts, tax computation and the records behind the figures HMRC names, and decide whether someone else, such as an adviser, should deal with HMRC for you.

GOV.UK lists genuine HMRC letters (GOV.UK: Check if a letter from HMRC is genuine). HMRC says to contact the officer named on the letter, to keep sending returns and paying tax during the check, and to ask if you need more time. A tax agent needs formal or temporary authorisation to deal with the check, and a friend or relative can be appointed too (GOV.UK: HMRC compliance checks). You have the right to be represented, but must still take reasonable care that what an adviser sends is correct (HMRC factsheet CC/FS1a).

What can HMRC ask for during the check?

Information and documents it reasonably needs to check the company's tax position, a meeting, which you can choose not to attend, and sometimes a visit to business premises. If the company doesn't provide what HMRC asks for, HMRC can issue a formal information notice, and failing to comply with one can lead to penalties.

The legal power is a taxpayer notice requiring information or a document "reasonably required" to check the taxpayer's tax position (FA 2008 Sch 36 para 1). HMRC's factsheet says a notice can't demand documents you don't have and can't get, or privileged communications with lawyers, and explains how to disagree (HMRC factsheet CC/FS2). Failing to comply carries a £300 penalty (FA 2008 Sch 36 para 39), then up to £60 for each further day (para 40). How much you tell, help and give access shapes any penalty reduction (HMRC factsheet CC/FS1a).

Can you amend the CT600 while an enquiry is open?

Yes, while the 12-month amendment window is still open, but an amendment doesn't narrow the enquiry. Where it changes the tax payable, it doesn't take effect until HMRC closes the enquiry into that matter, and HMRC can take the amendment into account in its conclusions.

Under FA 1998 Sch 18 para 31, an amendment made during an enquiry "does not restrict the scope of the enquiry", and any change to the tax payable waits for the partial or final closure notice. The window for any company amendment is 12 months after the filing date (para 15). Telling HMRC about an error once the check has started also counts as a prompted disclosure for penalty purposes, unless it concerns an unrelated inaccuracy HMRC had no reason to find (HMRC factsheet CC/FS7a). Our guide to correcting a CT600 after filing covers amendments when no enquiry is open.

How does an enquiry end, and how do you appeal?

HMRC ends it with a closure notice stating its conclusions and either saying no amendment is needed or amending the return. A partial closure notice can settle one matter first. The company can appeal against an amendment in writing within 30 days, and can ask the tribunal to direct HMRC to close a check.

The closure rules are in FA 1998 Sch 18 para 32 and para 34. The tribunal must direct HMRC to close the check unless HMRC has reasonable grounds not to (para 33). For a direct tax such as Corporation Tax, you appeal to HMRC first. If that doesn't settle it, HMRC offers a review by an officer not involved before, which usually takes 45 days (GOV.UK: Reviews), and you have 30 days from the offer to accept it or go to the tax tribunal (GOV.UK: Disagree with a tax decision).

What penalties can HMRC charge for an inaccurate CT600?

None if the company took reasonable care. For a careless inaccuracy the penalty is up to 30% of the potential lost revenue, for a deliberate one up to 70%, and for a deliberate and concealed one up to 100%. HMRC reduces it for telling, helping and giving access to records, down to a minimum.

The Company Tax Return is one of the documents the penalty covers (FA 2007 Sch 24 para 1). The maximums are for UK (category 1) matters (para 4), and the minimums depend on whether the disclosure was unprompted or prompted (para 10). HMRC gives up to 30% of the reduction for telling, 40% for helping and 30% for giving access (HMRC factsheet CC/FS7a). For £4,000 of extra tax, taking that £4,000 as the potential lost revenue, the ranges are:

The arithmetic: careless, 0% × £4,000 = £0, 15% × £4,000 = £600 and 30% × £4,000 = £1,200; deliberate, 20% = £800, 35% = £1,400 and 70% = £2,800; deliberate and concealed, 30% = £1,200, 50% = £2,000 and 100% = £4,000 (FA 2007 Sch 24 para 10). HMRC's factsheet shows how it lands inside a range. For a careless, prompted error with a 70% reduction for disclosure, the range is 30% − 15% = 15 points, 15 × 70% = 10.5 points off, so the rate is 30% − 10.5% = 19.5%, and the penalty on £4,000 would be £4,000 × 19.5% = £780 (HMRC factsheet CC/FS7a). The extra tax and late payment interest are due on top of any penalty.

How far back can HMRC go once the enquiry window has closed?

Through a discovery assessment: generally up to 4 years after the end of the accounting period, 6 years if the company or someone acting for it was careless, and 20 years if the loss of tax was deliberate. For a return already filed, HMRC also needs one of two conditions the law sets.

The time limits are in FA 1998 Sch 18 para 46, tabled in HMRC manual CH56200. Where a return was filed, a discovery assessment needs either careless or deliberate behaviour by the company or someone acting for it (para 43), or a loss of tax an officer couldn't reasonably have been aware of when the enquiry window closed or the enquiry ended, judged on the information in the return, its accompanying documents and anything provided in an enquiry (para 44). An appeal against an assessment goes in writing within 30 days (para 48).

Which records should the company keep, and for how long?

Everything needed to deliver a correct and complete return, including records of all receipts and expenses and, for a trade in goods, all sales and purchases. GOV.UK says to keep company records for 6 years from the end of the last financial year they relate to, and longer while an enquiry is open.

The tax duty is in FA 1998 Sch 18 para 21, which extends it until any enquiry is completed. GOV.UK adds that HMRC can fine a company £3,000, or a director can be disqualified, for not keeping accounting records (GOV.UK: Company and accounting records). Our guide to doing the company's bookkeeping yourself lists what to keep.

How can Taxley help if HMRC checks a return you filed with it?

Taxley keeps what it sent for you to download: a filing receipt with HMRC's correlation ID and IRmark, the CT600 as filed, the iXBRL accounts and tax computation, and HMRC's response. It doesn't deal with HMRC for you or give tax advice; the company, or a representative it appoints, answers the check.

Taxley (taxley.co.uk), UK online software that prepares and files the Company Tax Return (CT600) with HMRC and the annual accounts with Companies House, shows a "View receipt" link on the return's page once something has been sent. The receipt gives the dates and times of submission and acceptance, and "Download everything filed" puts the return as filed, the accounts and computations, and HMRC's response in one ZIP file, plus the Companies House submission when the accounts went there through Taxley. You can also download PDF copies of the CT600 summary, the accounts and the tax computation. Taxley's privacy policy says it generally keeps filed returns for six years from the end of the accounting period, but keep your own copies with the company's records.

Amendments of returns filed with Taxley cost nothing extra once HMRC has accepted the return, normally within 12 months after its filing deadline. Taxley doesn't ask whether an enquiry is open, so if one is, remember that the amendment won't change the tax payable until HMRC closes the enquiry into that matter. Taxley is software, not a tax agent: it doesn't correspond with HMRC's officer, attend meetings, negotiate penalties or pay the company's Corporation Tax. A return costs £39.95 with micro-entity accounts or £129 with small-company accounts. Take the 30-second check to see whether Taxley fits your company, or see the price for your company.

Frequently asked questions

Does an HMRC enquiry mean HMRC thinks the company did something wrong?

Not necessarily. HMRC can check any return, and its system picks some company returns at random for a full enquiry (HMRC manual COM71001). Treat the letter's deadlines seriously either way, and answer what it asks.

Will HMRC tell me when the enquiry window has passed?

No. HMRC's manual says it is under no obligation to confirm that a return has been accepted and won't be enquired into, and won't do so even if asked, except for some companies being wound up (HMRC manual COM71001).

Can HMRC open a second enquiry into the same return?

Only after the company amends that return. A return that has had one notice of enquiry can't get another, except one given because of an amendment (FA 1998 Sch 18 para 24), and that enquiry is usually limited to the amendment (HMRC manual COM71001). A discovery assessment may still be possible later.

What if the company can't pay the extra tax?

Tell the officer dealing with the check straight away, HMRC's factsheet says (HMRC factsheet CC/FS1a). HMRC's guidance adds that if you owe tax and can't pay it immediately, you can contact HMRC about payment arrangements (GOV.UK: HMRC compliance checks).

Can a director have to pay the company's penalty?

Sometimes, for a deliberate inaccuracy caused by the director's actions, where they gained, or tried to gain, personally or the company is, or may soon be, insolvent. If the company pays the penalty, HMRC won't ask the officers to pay (HMRC factsheet CC/FS7a).

General information, not personalised tax or accounting advice.