As taxpayers, we are lucky that the Self Assessment process is usually quick and simple – especially if using tools like AbraTax. However, there can be times when HMRC ask for more details than usual. For instance, you might be requested to complete a security check before your tax return or repayment can be confirmed.
If you find yourself wondering, “What security checks do HMRC do on Self Assessment?”, then you’ve found the right article for you. Read on to learn about HMRC’s security checks, why they might happen, how to respond, and how you can avoid them.
What Are HMRC Security Checks?
Definition and Purpose
HMRC security checks are steps taken to verify details during or after your Self Assessment tax return. These checks typically serve the purpose of safeguarding both you and HMRC’s public funds from error or misuse (such as fraud).
It can be assumed that many checks are undertaken routinely, without your involvement or awareness. In other circumstances, additional security checks may be carried out which require contacting you, or which might delay your usual Self Assessment process.
Since these checks are related to security, there is little official information provided by HMRC about them publicly. However, there are many reports from both users and tax service providers, from which we can gather details.
Why Security Checks Are Conducted
Security checks by HMRC seem to fall into multiple categories. Here are some likely scenarios:
- Identify fraud prevention
- Verification of tax repayment claims
- Checking inaccurate or unusual tax returns
Incorporating robust security checks is presumably a part of HMRC’s “due diligence”. As an organisation in charge of collecting and managing public funds, HMRC should take care to avoid exploitation and ensure correct tax filings – not only to protect their reputation but also to serve the UK as expected.
Types of HMRC Security Checks
Although there is little to no official information, it is reported that HMRC initiate different security checks in response to different risks. They may include:
Identity Verification
This will involve confirming the identity of the taxpayer via cross-referencing, e.g., with government records or credit agencies. As part of this verification, HMRC may request copies of official documents, such as:
- Your driving licence
- Your passport
- Recent bank statements
- Recent utility bills
Income Verification
In response to your Self Assessment, HMRC may decide to check the accuracy of your declared income streams. Here are some channels through which they might do this:
- Your bank account: Since the Finance Act 2021, HMRC has had the power to check details from your bank account directly, without requesting permission from you. However, this is extremely rare. For example, between April 2023 and March 2024, only 1,143 Financial Institution Notices (FINs) were issued. Around 20% of these were to financial institutions abroad.
- PAYE submissions: If you have an employer filing Pay As You Earn (PAYE) on your behalf, HMRC can cross-reference these details with what you state in your Self Assessment.
- Bank interest declarations: Banks and building societies submit annual summaries to HMRC about interest paid to account-holders. If interest has not been declared correctly in your Self Assessment, this might be flagged automatically for HMRC to investigate further.
- Digital platform reports: Following new regulations in 2024, HMRC receives information about your income directly from digital platforms such as Airbnb, eBay, Vinted and other “online marketplaces or social media”. This is because income from these sources can be taxable and may need to be declared. If you fail to declare it, HMRC might be notified automatically, and they might need to follow this up with the online platform.
- Requesting you to confirm: Sometimes, HMRC might reach out directly to you for clarification or to encourage you to double-check figures submitted to them in your Self Assessment. This is an opportunity for you to help them get to the bottom of any investigation and get back to normal.
Random Audits
In some instances of security checks, it can be assumed that HMRC is simply conducting randomised auditing. These may not be targeted, but instead form part of broader checks to assess tax compliance across the UK.
The Most Common Reasons for Security Checks on Self Assessment
Setting random audits aside, anecdotal reports suggest that security checks can be triggered by the following:
Unusual or Large Claims
Filing high-value expense claims or tax repayments may be flagged as suspicious by HMRC’s system. In this case, HMRC would want to evaluate the accuracy of your figures and scrutinise your finances further.
Errors in Submitted Tax Returns
One source suggests that errors in tax returns (particularly if they happen frequently) can alert HMRC to investigate your finances more closely. This could include incomplete entries in the relevant Self Assessment forms, or decimal places in the wrong place.
Inconsistent Income Reporting
If your income has changed significantly from one year to the next, this could be flagged by HMRC’s system for further checking – especially if there is no clear explanation. They may wish to confirm that you have not entered something erroneously, by confirming your declared income through other means.
Late Payments or Returns
If you frequently miss Self Assessment submission deadlines – or fail to pay your tax on time – this could trigger HMRC to take a closer look at your personal finances.
The Process of an HMRC Security Check
Throughout your cooperation with HMRC, there are likely many security checks being undertaken at various stages. For the most part, these checks probably occur unnoticed, without hindering the Self Assessment process. However, additional security checks (perhaps triggered by circumstances outlined above) may slow things down and require extra steps.
Understandably, the exact processes underlying HMRC’s security checks are not widely publicised. However, some taxpayers and tax service providers have described the following:
Notification of a Security Check
If your input is needed, such as more financial details or context, HMRC might notify you by letter or email. This communication could include:
- The reason for their security check on you
- Any actions required to be taken by you
- A deadline for your response
While HMRC have the right to contact you and request a timely response, it is also vital to be aware of potential scams.
Documents You May Be Asked to Provide
Depending on the specifics of the check, HMRC might request:
- Identification proof (see above)
- Evidence of your income
- Your bank account details
- Any supporting documents for expenses or claims
Timeline and Expected Duration
According to one source, a typical timeline for HMRC security checks is 4–6 weeks. Of course, this can vary widely – particularly if there are any complications or delays in document submission. Another source states that you usually have 30 days to submit any evidence or documentation requested by HMRC.
If you are expecting to receive a tax refund (rebate) during this time, then you may not receive this until HMRC is fully satisfied with the security checks. You might also be unable to initiate any new claims (e.g., for money owed) during this time.
In general, it is important to respond to HMRC’s requests as soon as possible in order to reduce the time to complete checks and get you back on track with tax as normal.
What to Do If You Are Selected for a Security Check
How to Respond to HMRC Requests
If HMRC contacts you regarding a security check, you must respond within the deadline given (typically, 30 days). Keep copies of your correspondence to and from HMRC and make sure to submit any documentation they might request. Failure to submit something requested by HMRC might delay things considerably or lead to further complications.
Best Practices for Preparing and Organising Your Documents
Although HMRC might specify in more detail, we suggest that you consider the following:
- Provide high-quality copies of original documents (unless specified otherwise)
- Label all files and documents clearly
- Group files logically (e.g., evidence for expenses, income streams)
- Submit specifically what is requested, without unnecessary additions
Potential Outcomes of a Security Check
Confirmation of Your Self Assessment
If the security checks are successful and everything is verified, you can expect HMRC to approve your Self Assessment and release to you any (re)payments pending.
Request for Additional Payments or Amendments
If any discrepancies are identified by the checks, HMRC may contact you again to request an amendment to your Self Assessment or for you to pay more tax.
Penalties for Non-Compliance
If you fail to respond to HMRC’s requests, or submit inaccurate returns, this could result in penalties such as a fixed fine or interest charged on your late payment. You may also be subject to further scrutiny now or in the future.
Tips for Avoiding HMRC Security Checks
Although some checks (such as routine verification or random auditing) are inevitable, there may be steps you can take to avoid additional security checks from HMRC.
Filing Accurately and On Time
Inaccuracies and late submissions can increase the likelihood of additional security checks from HMRC.
Keeping Clear Financial Records
If you maintain tidy records, this can help you to reduce errors and avoid late submissions. In turn, this should help you to avoid being flagged by HMRC’s systems. Try to keep the following details well organised and (wherever possible) in digital format:
- Evidence of income
- Invoices
- Expenses receipts and details
- Bank statements
Responding Promptly to HMRC Queries
HMRC typically expect you to respond to requests for further details within 30 days. If you fail to respond promptly, this might trigger additional scrutiny and further checks.
What to Do If You Disagree with HMRC’s Findings
Although HMRC are doing their best to uphold the highest standards, there is always risk in every system for error – especially when it comes to complex figures. If you think there has been a mistake, or that some information was missing, here are some actions you can take:
Appealing a Decision
After receiving a decision letter, HMRC usually allows 30 days during which you can launch an appeal. For Self Assessment, this most likely means challenging a tax decision relating to “direct tax”. In your appeal, you must explain clearly what you disagree with and why – including any extra information which you think HMRC has missed.
Seeking Professional Advice
If your circumstances are complex or you wish to have professional support, it is advisable to consult an accountant or qualified tax adviser. They can help you to:
- Review HMRC’s decision
- Prepare further evidence
- Initiate an appeal
- Communicate with HMRC (on your behalf)
Frequently Asked Questions
How long do HMRC security checks take?
Typically 4–6 weeks; however, it can vary greatly depending on the case complexity and how quickly you submit requested documents.
What triggers HMRC to carry out security checks?
HMRC likely carries out many security checks in the background. Triggers for additional checks might include high-value expenses/repayments, inconsistencies between tax returns, and late submissions/payments.
Conclusion
HMRC’s security checks serve a critical role in upholding the UK’s tax efficiency and integrity. This article has addressed the question, “What security checks do HMRC do on Self Assessment?”, while also helping you understand HMRC’s processes and avoid unnecessary scrutiny. At AbraTax, we believe that increased awareness and thorough preparation can reduce tax stress and increase smooth outcomes.
If you want to simplify tax today, sign up with AbraTax Self Assessment for free!