The HMRC Letter — What to Do

10 common HMRC letters: what they mean and exactly how to respond

HMRC sends 10 common types of letter to UK self-employed people and small businesses. Each has different response deadlines, different consequences for ignoring it, and a specific procedure for responding. An SA302 is just proof of income for mortgage lenders — no action needed unless the figures are wrong. A Section 9A enquiry is HMRC formally opening an investigation into your return — you should get professional help immediately. A penalty notice gives you 30 days to appeal with a reasonable excuse. This guide covers exactly what to do for each type.

Last reviewed: 26 May 2026

Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact HMRC. Read our editorial scope →

SA302 — Tax Calculation Summary

The SA302 is not a demand. It is a summary of your tax calculation, typically generated when you file your Self Assessment online. Mortgage lenders request it as proof of income.

☐Log into your personal tax account at gov.uk and download the SA302 for the relevant tax year
☐Check the figures match your records — if they don't, the discrepancy is usually in your return, not HMRC's calculation
☐If figures are wrong, call HMRC on 0300 200 3310 with your UTR and the tax year
☐If correct, save as PDF and send to your mortgage broker or lender — no further action needed

PAYE Coding Notice (P2)

HMRC sends a P2 when they change your tax code. This usually means they've received new information (a company car, benefits in kind, underpaid tax from a previous year, or a new source of income).

☐Check your Personal Tax Account online for the coding notice breakdown
☐Verify every item listed (company car, medical insurance, state pension, underpayment restriction) is correct
☐If an item is wrong (e.g. you've left the job, sold the car, or the pension amount is incorrect), correct it online or call 0300 200 3300
☐If the code is emergency (BR, 0T, W1/M1), check why — usually because HMRC has no P45 or because you have multiple employments

P800 — Over/Underpayment

A P800 is HMRC's calculation that you have overpaid or underpaid tax through PAYE. It is not a formal assessment — it is a reconciliation.

Overpayment

If you overpaid, HMRC will usually send a cheque or make a BACS transfer within 2–4 weeks. You can also claim online via your Personal Tax Account. No action needed unless the amount looks wrong.

Underpayment

If you underpaid by less than £3,000, HMRC will usually adjust your tax code for the following year to collect it. If more than £3,000, they will send a demand for payment. You can request a Time to Pay arrangement (0300 200 3822) if you cannot pay.

Compliance Check Letter

HMRC conducts routine compliance checks on roughly 300,000–350,000 Self Assessment returns per year. Receiving one does not mean you are under suspicion. It means your return was selected for verification, often by random sampling or because a figure fell outside expected ranges.

☐Read the deadline carefully — usually 30 days from the date of the letter
☐Provide ONLY what is asked for. Do not volunteer extra information, earlier years, or unrelated documents
☐Make copies of everything you send. Send by recorded delivery or upload via the HMRC digital service
☐If you need more time, call the number on the letter BEFORE the deadline and request an extension
☐Keep a log: date received, deadline, documents sent, method, reference number

Section 9A Enquiry

A Section 9A enquiry (TMA 1970 s.9A) is the most serious routine letter HMRC can send. It means they are formally opening an investigation into your tax return. This is not a compliance check — it is a statutory enquiry with legal powers.

Aspect vs full enquiry

An 'aspect' enquiry targets a specific item (e.g. your CIS deductions, your rental income, your mileage claim). A 'full' enquiry examines your entire return. The opening letter will state which it is.

The 12-month window

HMRC must open a s.9A enquiry within 12 months of the date your return was filed (or the filing deadline, whichever is later). If they miss this window, they can still use discovery assessments but lose the formal enquiry powers.

Penalties

If errors are found, penalties range from 0% (careless, unprompted disclosure) to 100% (deliberate, prompted). The penalty framework is in FA 2007/2008. Behaviour categories: reasonable care (0%), careless (up to 30%), deliberate but not concealed (up to 70%), deliberate and concealed (up to 100%).

Closure and appeal

HMRC must issue a closure notice (s.28A) when the enquiry is complete. You have 30 days to appeal the conclusions. The appeal route is: internal review → First-tier Tribunal.

Penalty Notice — Late Filing/Payment

HMRC issues automatic penalties for missing deadlines. The regime is strict but appealable.

Late filing penalties

£100 fixed penalty on day 1 after 31 January. £10 per day from day 30 to day 90 (max £900). 5% of tax due at 6 months. Another 5% at 12 months. If tax due is zero, the £100 and daily penalties still apply.

Late payment penalties

5% of unpaid tax at 30 days. Another 5% at 6 months. Another 5% at 12 months. Interest accrues daily from the due date (currently ~7.25% pa, Bank of England base rate + 2.5%).

Reasonable excuse appeal

Appeal within 30 days using form SA370 or online. State the excuse, provide evidence, and request the penalty be cancelled. If rejected, ask for an internal review (free, independent HMRC officer) and then appeal to the First-tier Tribunal.

Information Notice — Schedule 36

A Schedule 36 Information Notice (FA 2008 Schedule 36) is a statutory demand for documents or information. It is not optional. Failure to comply carries an automatic £300 penalty and £60 per day continuing penalty.

What you must provide

Only what is specified in the notice. If it asks for 'all bank statements for 2023/24', provide exactly that. If it asks for 'invoices relating to customer X', provide only those.

Legal privilege

Communications with your solicitor are protected by legal privilege and need not be disclosed. Communications with your accountant are NOT protected unless the accountant is also a solicitor or the matter is subject to tax advice privilege (narrower and contested).

Simple Assessment (PA302)

HMRC can issue a Simple Assessment if they believe you owe tax but you have not filed a return. Common scenarios: state pension exceeds personal allowance, CIS over/under-deduction, or untaxed interest/dividends.

☐Check the PA302 against your records — HMRC's figure may be wrong (especially CIS or bank interest)
☐You have 60 days to query the assessment online or by post
☐Payment is due by the date on the notice, usually 31 January or 3 months after issue
☐If you believe a return was due instead, file the return — the Simple Assessment may then be withdrawn

Tax Code Change

HMRC adjusts tax codes throughout the year as new information arrives. A code change letter explains why.

☐Log into your Personal Tax Account to see the full breakdown
☐Common triggers: company car change, benefits in kind update, state pension start, underpaid tax from prior year
☐If a restriction for underpaid tax is incorrect, call 0300 200 3300 with the P800 reference
☐If the code is K-code (negative allowance), check why — usually because deductions exceed allowances

Discovery Assessment (s.29)

A discovery assessment is HMRC's way of taxing income or gains they believe were under-declared, after the normal enquiry window has closed.

Time limits

4 years: honest mistake or reasonable care. 6 years: careless behaviour. 20 years: deliberate behaviour or failure to notify. HMRC must state which behaviour category they are alleging.

Statutory protection

If you filed a return that was 'made to the best of your knowledge and belief', and the under-declaration was not careless or deliberate, HMRC cannot assess beyond 4 years. This is your primary defence.

30-day appeal

Appeal within 30 days. Ask for the evidence behind the discovery. If the behaviour category is wrong (e.g. they allege 'careless' but you have evidence of reasonable care), the time limit collapses to 4 years.

Quick comparison table

A side-by-side summary of the 10 letter types, their core purpose, what you typically need to do, and the deadline.

HMRC letter types — action and deadlines

Letter	Core purpose	Typical action	Deadline
SA302	Proof of income/calculation	Download, check, send to lender if needed	None — informational
P2 Coding Notice	Tax code changed	Check online, correct errors	Before next payroll
P800	Over/underpayment	Claim refund or pay underpayment	Varies — check notice
Compliance Check	Routine verification	Provide requested documents only	~30 days
Section 9A	Formal enquiry opened	Get accountant, respond via adviser	Stated in letter
Penalty Notice	Late filing/payment fine	Pay or appeal with reasonable excuse	30 days to appeal
Schedule 36	Statutory info demand	Comply or apply to tribunal to vary	Stated in notice
Simple Assessment	Tax bill without return filed	Query if wrong, pay if correct	60 days to query
Tax Code Change	Code adjusted	Check online, correct if wrong	Before next payroll
Discovery Assessment	Tax under-declared after window	Appeal, challenge behaviour category	30 days to appeal

Your rights as a taxpayer

The HMRC Charter sets out what you can expect. These rights are not optional — they are statutory and enforceable.

Right to know the scope

In any enquiry, HMRC must tell you what they are checking and why. You do not have to answer questions outside the stated scope.

Right to appeal

You can appeal almost any HMRC decision within 30 days. The appeal route: internal review (free, by an independent HMRC officer) → First-tier Tribunal (costs £100–£200 to lodge, may be recoverable if you win) → Upper Tribunal (for points of law).

Complaints route

If HMRC mishandles your case (delays, rudeness, wrong advice), complain first to the officer's manager, then to HMRC Complaints, then to the Adjudicator's Office, then to the Parliamentary and Health Service Ombudsman. The Ombudsman can award compensation.

Statute references: TMA 1970 s.9A, s.28A, s.29, s.93; FA 2008 Schedule 36; FA 2007/2008 penalty framework; Commissioners for Revenue and Customs Act 2005.

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Frequently asked questions

What happens if I miss the Self Assessment deadline?+

The Self Assessment deadline is 31 January (online filing) for the previous tax year. Miss it and HMRC apply an automatic £100 penalty. Beyond that: £10 per day from 3 months late (capped at £900), 5% of tax due at 6 months late, and another 5% at 12 months late, under Schedule 55 of the Taxes Management Act 1970. If you have a genuine reason (serious illness, bereavement, technical issue with HMRC's systems) you can appeal with evidence; HMRC accepts reasonable excuse appeals in most genuine cases.

Do I need an accountant or can I file Self Assessment myself?+

Legally you can file Self Assessment yourself via gov.uk for free, most simple sole-trader returns (single income source, basic expenses) are realistic to self-file. An accountant adds real value when: your trading profit is above £40,000 (extraction-strategy decisions matter), you have multiple income streams (PAYE + self-employment + property + dividends), you've crossed the £90,000 VAT threshold, you're considering incorporation, or you have an HMRC enquiry. Expect to pay £400-£1,500/year for a typical sole-trader accountant; the cost is itself a deductible expense.

How do payments on account work?+

When your Self Assessment tax bill exceeds £1,000 for the first time, HMRC requires payments on account toward NEXT year's tax. Half the current bill is due 31 January (alongside the current bill); the other half is due 31 July. So your first January after crossing the threshold can hit with a double-bill: last year's balance + first payment on account. Adjust via Form SA303 if you expect next year's income to drop substantially. Payments on account don't apply if more than 80% of your tax is collected via PAYE.

Is this letter a scam?+

Genuine HMRC letters arrive by post to your registered address. They never ask for payment by iTunes vouchers, crypto, or bank transfer to a mobile number. They never threaten immediate arrest. HMRC does send text messages and emails, but only for routine reminders (e.g. 'Your tax return is due'). If a letter demands urgent payment via unusual methods, or contains a mobile number instead of 0300 200 3300, it is a scam. Forward suspicious texts to 60599 and emails to phishing@hmrc.gov.uk. You can verify any genuine HMRC contact by calling 0300 200 3300 and quoting the reference number on the letter.

What counts as a 'reasonable excuse'?+

HMRC accepts: serious illness or disability (yours or a close relative), death of a partner, unexpected hospitalisation, computer/software failure at the time of filing, fire or flood destroying records, postal delays (if sent on time), and incorrect advice from HMRC itself. They do NOT accept: 'I forgot', 'I was too busy', 'my accountant didn't do it', or 'I didn't have the money'. You must prove the excuse with evidence (medical certificate, death certificate, IT support ticket, insurance claim). The excuse must cover the entire period of failure, not just the deadline day.

Should I get an accountant involved?+

Get an accountant or tax adviser immediately if: the letter mentions Section 9A (formal enquiry), COP9 (suspected fraud), Schedule 36 Information Notice, Discovery Assessment, or any letter referencing 'deliberate behaviour' or penalties above £300. For routine compliance checks, P800s, coding notices, and SA302s, you can usually handle it yourself. The litmus test: if the letter uses the word 'enquiry', 'investigation', 'penalty', or 'discovery', or asks for documents going back more than one tax year, get professional help. The cost of an accountant (£150–£500) is negligible compared to the cost of getting a formal enquiry wrong.

Can HMRC go back more than 4 years?+

Yes. The standard time limit is 4 years from the end of the tax year (TMA 1970 s.29). This extends to 6 years if there is careless behaviour (e.g. significant arithmetic errors, failing to check obvious mistakes). It extends to 20 years if there is deliberate behaviour (knowingly under-declaring income, destroying records, or submitting false invoices). For VAT, the standard is 4 years but can extend to 20 years for deliberate evasion. If HMRC opens a discovery assessment beyond 4 years, they must prove the behaviour was careless or deliberate. You have the right to see their evidence before responding.