How are UK tax investigations and enquiries evolving for Self Assessment in the 2024/25 tax year?

What’s changing in Self Assessment compliance for 2024/25?

UK Self Assessment has been moving steadily from a “file once a year and hope for the best” system to a far more data-led, proactive compliance environment. In the 2024/25 tax year, that evolution is becoming clearer in three big ways: HMRC is getting better at using third-party data to spot mismatches; “soft touch” compliance (nudges, prompts, educational letters and digital messaging) is being used more deliberately before formal enquiries begin; and the system is being reshaped by the runway to Making Tax Digital for Income Tax (MTD for ITSA), which will change what HMRC expects taxpayers to keep, how often information is sent, and what “normal” looks like for risk assessment.

If you file Self Assessment as a sole trader, landlord, company director, or higher earner with more complex affairs, the practical takeaway is simple: HMRC’s compliance activity is becoming more targeted, more automated, and more continuous. The traditional mental model—“I send a return by 31 January and then I’m done”—is being replaced by something closer to ongoing verification, where the data HMRC holds is increasingly used to validate what you submit, and where you may be contacted earlier and more frequently if the numbers don’t line up.

The shift from random checks to risk-led selection

Historically, many taxpayers experienced compliance as something that happened to “someone else,” or assumed checks were largely random. That view is becoming less accurate each year. In 2024/25, HMRC’s enquiry and investigation approach continues to lean heavily on risk scoring—selecting cases based on signals such as unusual movements in profit, persistent losses, inconsistencies across years, discrepancies between declared income and lifestyle indicators, or mismatches against information received from banks, employers, pension providers, payment processors, letting agents, online platforms, and overseas reporting regimes.

This does not mean every return is “investigated,” but it does mean that certain patterns are more likely to trigger contact. For example, a sudden drop in turnover without an obvious reason, a large claim for expenses that is out of line with comparable businesses, repeated late filings, or significant changes in rental income can all act as risk markers. HMRC’s objective is to focus resources where the likelihood of error (or deliberate understatement) is higher, and where the potential yield justifies the effort.

In practice, the risk-led approach changes how enquiries feel. Many people now encounter compliance activity not as a surprise full enquiry, but as a letter that says, in effect, “Our information suggests something may be missing—please check and tell us what you find.” That brings us to a major trend of recent years that remains very relevant in 2024/25: the rise of “nudge” style interventions.

Nudge letters and “pre-enquiry” contact: the new front line

Nudge letters are not new, but their role has expanded. Rather than opening a formal enquiry straight away, HMRC often starts with an informal prompt asking you to review your return (or your obligation to submit one) and correct anything that is wrong. These letters are typically triggered by third-party data, and they are designed to encourage voluntary correction. For HMRC, the advantage is speed and scale: it can contact large numbers of taxpayers at relatively low cost and reserve formal enquiries for the subset of cases that don’t resolve.

For taxpayers, the danger is treating a nudge letter as ignorable because it is “informal.” In reality, it is often a sign that HMRC has some data point in hand (or believes it can obtain it) that conflicts with your filing position. If you receive a nudge letter in 2024/25, it is wise to assume the letter exists because your details have been flagged by a specific risk rule, not because you were picked at random.

In an evolving compliance environment, the best response is usually structured and evidence-led:

• Identify what the letter is likely referring to (for example, undeclared bank interest, property income, employment income, dividend income, capital disposals, overseas income, or trading receipts).

• Reconcile the relevant records to your return (and to your bookkeeping if you have it).

• Correct any errors promptly using the appropriate method (amendment window, disclosure, or a formal correction route depending on timing and circumstances).

• Keep an audit trail showing what you checked and how you reached your conclusion.

The key point is that informal contact is increasingly the start of the compliance journey, not a side note. In 2024/25, many compliance interactions begin this way and only escalate if HMRC is dissatisfied with the response or believes the issue is serious.

More third-party data means more mismatch enquiries

Self Assessment is particularly exposed to “mismatch risk” because it relies on the taxpayer to report diverse income sources correctly. HMRC, however, has access to more third-party data than ever, and that continues to expand. Banks and building societies report interest; employers report pay and benefits through PAYE and RTI; pension providers report contributions and pension payments; and many platforms and intermediaries generate data trails that can be requested or matched.

As the volume and quality of data increases, HMRC can more readily run automated comparisons. The kinds of issues that frequently sit behind enquiries and checks include:

• Interest and investment income not reflected in the return (or recorded in the wrong place).

• Dividend income and director remuneration that does not align with company filings and payroll data.

• Property income errors: missing rents, incorrect expense claims, or confusion around repairs vs capital improvements.

• Self-employment turnover that looks inconsistent with bank deposits, card receipts, invoices, or platform payouts.

• Capital gains disposals not reported, particularly where sales proceeds are visible through conveyancing, registries, or broker statements.

In 2024/25, the “data mismatch” theme is also influenced by behaviour changes in the economy. More people have side incomes, gig work, digital sales, short-term letting, influencer income, content creation revenue, and platform-based payments. These income streams create records that are not always perfectly understood by taxpayers when it comes time to file. HMRC’s compliance strategy increasingly targets this gap between modern earning patterns and the public’s understanding of reporting obligations.

Compliance focus areas: where HMRC attention often lands

HMRC does not publish an annual “enquiry list” for Self Assessment in a way that lets you predict case selection with certainty, but over time some themes repeatedly show up in compliance activity. In the 2024/25 environment, the following areas are commonly associated with higher scrutiny or higher error rates:

Self-employment and cashflow-based businesses

Businesses that take significant cash, that have volatile profits, or that operate in sectors where under-recording is historically common may attract closer attention. The practical issues are often mundane: incomplete sales records, poor separation of business and personal spending, or expense claims without supporting evidence. HMRC does not need to allege wrongdoing to open an enquiry; it needs only a reason to check that the return is correct.

Property income and landlord reporting

Landlord reporting remains a consistent compliance topic. The reasons include complexity (e.g., joint ownership, furnished holiday letting rules where relevant, rent-a-room relief, finance cost restrictions, and capital allowances in certain situations) and the availability of third-party information (tenancy deposits, letting agent records, mortgage statements, and property transaction data). Mistakes often stem from misclassification of expenditure (capital vs revenue), misunderstanding of allowable costs, or missing income when rent is collected through multiple routes.

High Income Child Benefit Charge (HICBC) and “surprise” taxpayers

Many people enter Self Assessment because of the High Income Child Benefit Charge or other triggers, not because they see themselves as “self-employed.” That can lead to reporting errors: missed obligations, incorrect adjusted net income calculations, or failure to include certain reliefs and deductions correctly. Where taxpayers are new to Self Assessment, HMRC may see a higher likelihood of error and may use educational contact and nudges more frequently.

Overseas income, residency, and remittances

Cross-border issues can lead to enquiries because they are complex and often misunderstood. Residency, split-year treatment, foreign tax credits, offshore interest/dividends, and capital gains involving overseas assets can all create mismatches or omissions. HMRC also benefits from information exchange regimes that expand its visibility of offshore accounts and income streams, making this area more data-rich than many taxpayers assume.

Cryptoassets and digital asset activity

Cryptoasset reporting has been a growing compliance theme, and it is becoming increasingly systematised. Many taxpayers still do not realise that disposals, swaps, and certain other transactions can create chargeable gains (and that record-keeping matters). HMRC’s ability to obtain information from exchanges and platforms has improved, and future reporting frameworks are expected to increase data flows further. For 2024/25 filings, this translates into a greater likelihood of HMRC asking questions where crypto activity exists but is not reflected on the return, or where the reported figures appear inconsistent with the scale of activity.

From “enquiries” to a spectrum of compliance checks

It is helpful to think of HMRC intervention as a spectrum rather than a single event. In the 2024/25 Self Assessment context, you might encounter:

• Informal prompts (nudges, educational letters, reminders to check a return).

• Requests for information outside a formal enquiry, where HMRC asks you to clarify or provide documents.

• Aspect enquiries focusing on a specific area (for example, property expenses or business turnover).

• Full enquiries into the entire return, which can expand into multiple years depending on findings.

• Discovery assessments and follow-on action where HMRC believes tax has been lost and certain conditions are met.

This spectrum matters because the best strategy depends on where you are on it. A nudge letter might be resolved quickly with a careful review and a tidy explanation. A formal enquiry, by contrast, may involve structured information requests, meetings, detailed reconciliations, and consideration of penalties depending on behaviour and disclosure quality.

Importantly, the line between “informal” and “formal” can be thin. Informal contact can become a formal enquiry if HMRC is not satisfied, if deadlines are missed, or if the response raises further questions. In 2024/25, where digital contact channels are more common, it can also feel like HMRC is “checking in” more frequently. That is part of the shift toward continuous compliance rather than periodic oversight.

The enquiry window and timing pressure: why early preparation pays off

A common misconception is that once you file, you can forget about it until HMRC contacts you—if it ever does. In reality, the period in which HMRC can open an enquiry (and the circumstances in which it can go further back) make it sensible to treat each return as something you may need to explain later. The operational trend in 2024/25 is that HMRC often contacts taxpayers earlier in the cycle, especially where data mismatches can be identified quickly. That creates timing pressure for taxpayers who keep records in a loose way and only “sort it out at year end.”

Good preparation is not only about avoiding mistakes; it is also about reducing the cost and stress if you are asked questions. If you can quickly produce a clean set of records and a straightforward reconciliation from source documents to the return, many checks become shorter and less contentious. If you cannot, HMRC may have more reason to doubt the accuracy of the figures and to widen the scope of its questions.

Digital services and a more “self-serve” HMRC: fewer phone calls, more portals

Another way Self Assessment compliance is evolving is in how HMRC interacts with taxpayers. Over recent years, HMRC has expanded digital services, apps, and online account capabilities. In 2024/25, this trend continues: more guidance, prompts, payment options, and account information are designed to be accessed digitally, and many taxpayers increasingly manage their position through online services rather than phone-based conversations.

From a compliance perspective, this matters because:

• Digital prompts can be issued at scale and timed around known deadlines.

• Online accounts make it easier for taxpayers to see what HMRC thinks is due, when payments are late, and what penalties or interest might be accruing.

• HMRC can encourage behavioural change (pay on time, set up a payment plan, correct errors quickly) using in-product messaging and streamlined processes.

In other words, the compliance system is not only about catching mistakes; it is also about designing the environment so that fewer mistakes happen and so that late payment or late filing becomes less common. Whether this feels supportive or intrusive depends on your experience, but it is undeniably part of the direction of travel in 2024/25.

Penalties and interest: behavioural signals HMRC can leverage

Tax investigations are not only driven by what you report; they can also be influenced by how you behave as a filer. Consistent late filing, late payment, or repeated amendments can make a taxpayer appear higher risk because those behaviours correlate with error rates and poor record-keeping. HMRC’s systems can also use payment and filing patterns as part of broader risk profiling.

For 2024/25 Self Assessment, deadlines and charges remain central to the compliance landscape. Late filing penalties and late payment penalties operate on different tracks, and interest accrues on overdue tax. While the mechanics of penalties may be familiar, the evolving point is that these charges are increasingly integrated into a broader compliance approach: they nudge taxpayers toward timely compliance and provide escalation points when behaviour doesn’t change.

If you anticipate difficulty paying, proactive engagement tends to be better than silence. Payment plans and “Time to Pay” arrangements can sometimes be available depending on circumstances. From an enquiries standpoint, demonstrating that you are organised, responsive, and willing to put issues right can influence how HMRC approaches a case, even if it does not eliminate scrutiny.

Making Tax Digital for Income Tax: the shadow hanging over 2024/25

Even though the 2024/25 tax year is still filed under the current Self Assessment model for most taxpayers, MTD for Income Tax is already shaping compliance behaviours. HMRC is using the runway period to build expectations around digital records, more frequent reporting, and better alignment between what taxpayers record and what they declare.

For many sole traders and landlords, the critical point is that MTD for Income Tax is expected to start in phases based on levels of “qualifying income,” with the 2024/25 tax year figures being relevant to whether you will be mandated into MTD at the first wave. That means 2024/25 record quality matters not just for the return itself, but for future obligations and the likelihood of HMRC attention if your position appears inconsistent or if you struggle with the transition.

In practical terms, MTD’s influence on enquiries can show up in subtle ways in 2024/25:

• Record-keeping expectations rise: HMRC is more likely to challenge figures that do not appear to be grounded in contemporaneous records.

• Digital footprints expand: More transactions run through platforms, banking apps, and software integrations, which creates traceable records.

• Benchmarking becomes easier: With more structured data, HMRC can compare patterns across taxpayers and industries.

Even before mandatory MTD, adopting more disciplined bookkeeping and retaining digital evidence can materially reduce enquiry risk and shorten the duration of any compliance check.

What an enquiry looks like now: process, tone, and evidence

Taxpayers often imagine an enquiry as an adversarial process from day one. In reality, many enquiries begin with relatively narrow questions, particularly where HMRC’s aim is to resolve a discrepancy. What has changed is the amount of evidence HMRC expects and the speed at which it expects taxpayers to respond, especially when the requested information should be readily available if records are kept well.

A typical modern Self Assessment enquiry or check (though every case differs) often involves:

• An opening letter explaining what HMRC is checking and requesting specific documents.

• Requests for bank statements, invoices, receipts, rental statements, mileage logs, or reconciliations.

• Questions about how figures were calculated, including explanations for unusual movements year-on-year.

• Follow-up questions that may expand the scope if initial answers reveal gaps or inconsistencies.

• A conclusion where HMRC either accepts the return, agrees amendments, or raises assessments and considers penalties.

In 2024/25, what tends to make enquiries more difficult is not simply the presence of an error, but the absence of a clear story supported by records. HMRC is generally more comfortable accepting explanations that are documented and that tie back to the underlying data. Conversely, estimates without support, reconstructed records, or incomplete bank narratives can prolong the process and increase the chance of a wider review.

Common enquiry triggers in 2024/25—and how to reduce your exposure

While you cannot fully control whether HMRC selects your return for checking, you can reduce your exposure by avoiding the kinds of patterns that often trigger questions. Consider the following practical steps for 2024/25 filings:

Reconcile income sources before you file

Match your return to source documents: bank interest certificates (or statements), dividend vouchers (or broker statements), P60/P11D information, rental statements, and platform summaries. Many mismatch checks arise simply because a figure was overlooked or entered in the wrong box.

Keep business and personal transactions separate

For sole traders, mixed bank accounts create confusion and make it harder to defend turnover and expense figures. A dedicated business account is not a legal requirement for all, but it can dramatically improve clarity and credibility in an enquiry.

Document “one-off” events

If your profits drop because you were ill, took parental leave, lost a key client, moved premises, or incurred unusual costs, record that contemporaneously. A short note, emails, contracts, or supporting paperwork can be invaluable if HMRC later asks why the numbers shifted.

Be cautious with loss claims and high expense ratios

Legitimate losses happen, and legitimate businesses can have high costs. The risk comes when losses repeat without a credible commercial basis or when expense claims appear inflated relative to turnover. Keep clear records, and make sure your expenses are correctly categorised and genuinely allowable.

Handle property costs carefully

Distinguish repairs (often revenue) from improvements (often capital). Keep invoices and descriptions, and track costs by property. If you have multiple properties, poor allocation is a common trigger for questions.

Don’t ignore crypto records

If you have crypto transactions, keep exchange statements, wallet histories, and notes on what each transaction represents. If you report gains, ensure the methodology is consistent. If you believe no tax is due, be ready to explain why (for example, disposals below allowances, or losses offsetting gains).

Agents, advisers, and “professionalism signals” in enquiries

Another subtle evolution in enquiry dynamics is how HMRC interprets “professionalism signals.” Taxpayers who respond promptly, provide organised schedules, and communicate clearly can often achieve quicker resolutions. Having an accountant or tax adviser does not automatically reduce scrutiny, but it can improve the quality of responses and ensure the correct technical framework is applied.

For 2024/25, this matters because compliance is increasingly process-driven. HMRC caseworkers often operate to internal targets and structured workflows. Clear, complete responses help them close issues faster. Disorganised replies, partial documents, or inconsistent explanations can keep the case open longer and increase the chance of broader questions.

How HMRC investigations can escalate—and how to manage escalation risk

Most Self Assessment checks do not become “serious investigations,” but escalation can happen. Escalation risk increases when HMRC believes the errors are significant, repeated, or indicative of deliberate behaviour. It also increases when the taxpayer is uncooperative, misses deadlines, or provides misleading information.

To manage escalation risk in 2024/25:

• Respond on time, or ask for an extension early with reasons.

• Answer the question asked, but also provide context where it prevents misunderstandings.

• Disclose errors proactively if you find them during the process; do not wait for HMRC to “prove” them.

• Keep communication factual and evidence-based, avoiding speculation.

• Where issues are complex (residency, large capital gains, business restructuring), consider specialist advice early.

In many cases, escalation is not about the original issue but about the way the process unfolds. Treating early contact seriously is often the best defence.

Looking ahead: what 2024/25 signals about the future of Self Assessment enquiries

The 2024/25 tax year sits at an important point in the timeline: digital reporting reforms are approaching, data availability is increasing, and HMRC is refining how it uses behavioural nudges and automated risk rules. The direction of travel is toward a system where compliance is more continuous, where discrepancies are detected faster, and where the “cost of disorganisation” rises because HMRC can more easily challenge numbers that lack support.

For taxpayers, the most useful mindset shift is to treat your Self Assessment return as the output of a record-keeping process, not the process itself. When your books (formal or informal) are complete, reconciled, and supported by evidence, you not only reduce the chance of an enquiry, but you also make any enquiry far easier to resolve.

In short, UK tax investigations and enquiries for Self Assessment in 2024/25 are evolving into something more targeted, more data-driven, and more influenced by digital systems. The best response is not fear, but preparation: keep better records, reconcile more carefully, respond promptly to HMRC contact, and get the right help when the issues are technical or high stakes.