At Wilkins Southworth, we understand that hearing the words “HMRC investigation” can be unsettling. However, with the right knowledge and expert support, what might seem like a threat can become something entirely manageable. HMRC has set a target to increase the number of charging decisions for serious tax fraud by 20% by 2030. 

To facilitate this, there is ongoing investment in more sophisticated technology and resources. Consequently, it’s more important than ever to be prepared, not fearful. 

This article is your guide to being proactive. It outlines what’s changing, who may be affected, and most importantly, how we can help you stay ahead and feel in control.

HMRC’s updated approach

HMRC has received additional government funding and a clear directive: increase enforcement. In 2023–24, 648 dawn raids were carried out, and the amount recovered from wealthy individuals has more than doubled – £2.2bn in 2019–20 to £5.2bn in 2023–24. These figures reflect a strategic shift, not a cause for panic, but rather a call for awareness.

If you earn over £200,000 annually or have assets above £2 million, HMRC considers you part of its “wealthy” category. That means your affairs are more likely to come under review. However, most reviews begin with letters, not raids, and with the right advice, many issues can be resolved quickly and efficiently. While HMRC carries out the investigations, the Crown Prosecution Service (CPS) ultimately decides whether to proceed with a prosecution.

Being proactive isn’t about assuming guilt; it’s about ensuring clarity and understanding. In many cases, misunderstandings or reporting inconsistencies can be cleared up without penalties or further action. Our role is to help you spot and fix potential issues early.

HMRC Investigations – Who should prepare?

This new wave of HMRC enforcement is not limited to billionaires or celebrities. In fact, much of HMRC’s recent activity targets middle- to high-net-worth individuals and professionals with complex financial lives. The net is broader than ever, and includes:

• Offshore income disclosures: HMRC is focusing on individuals with overseas investments, bank accounts, and property. Even where income has been declared, the structure and timing of that declaration matter. Changes to the non-dom regime and international data-sharing have made offshore holdings far more visible to HMRC.
• Complex group or trust structures: This takes in family investment companies, discretionary trusts, and layered ownership models, which often require nuanced reporting. If these structures are not updated to reflect current legislation or if reporting has been inconsistent over the years, it could trigger a more thorough review.
• Business owners using hybrid models: Entrepreneurs and SMEs operating through a mix of LLPs, limited companies, and investment vehicles can easily come to HMRC’s attention. Issues often arise not from wrongdoing, but from confusion over reporting requirements or the allocation of profit across entities.
• Professionals seen as enablers: Lawyers, accountants, and financial advisers who have recommended aggressive tax strategies are coming under greater scrutiny. Even those who acted in good faith may be drawn into HMRC’s broader effort to reshape professional standards.

HMRC now receives regular data from more than 100 countries via the Common Reporting Standard (CRS). This includes details on account balances, dividends, interest, and even ownership structures. These records are algorithmically cross-referenced against UK tax returns.

Technology may have evolved, but HMRC’s goal hasn’t: they want complete, timely disclosure. We ensure your reporting meets that standard, long before any questions are asked.

How HMRC investigations typically begin

Contrary to public perception, most HMRC investigations don’t begin with a raid or legal notice. They typically start with a simple letter or phone call to request clarification. Triggers for such contact may include:

• Discrepancies between bank-reported data and your tax return
• Late or missing filings, such as ATED returns, trust reports, or unreported share schemes under the ERS regime
• Third-party reports or whistle-blower tips (including from ex-employees or former advisers)
• Lifestyle indicators that don’t match reported income (property purchases, international travel, high-value goods)
• Certain sectors, including crypto, medical, and construction, have attracted greater scrutiny in recent HMRC activity.

These first steps are often exploratory, but the goal is to verify that everything is in order, and if not, to open a dialogue. That’s where swift, informed action from your adviser is essential.

When queries go unanswered or if responses raise further concerns, HMRC may escalate the inquiry. This can lead to more formal civil investigations, such as a Code of Practice 8 (civil cases involving tax avoidance or irregularities) or Code of Practice 9 (serious fraud cases handled under HMRC’s disclosure facility).

Even in rare criminal investigations, it’s possible to influence the path of the inquiry by cooperating early, being transparent, and providing well-organised documentation.

By working with us from the outset, clients often avoid the stress, costs, and reputational damage associated with more serious proceedings.

Five ways to be proactively prepared

Here are five practical steps you can take now to strengthen your position and reduce the risk of an HMRC enquiry escalating.

1. Review Your Tax Position
   We recommend an annual review of your tax affairs – not just to ensure compliance, but to look ahead. Are your offshore investments still structured in the most efficient and transparent manner? Have any changes in legislation created a gap in previous reporting? We help you review and correct proactively.

2. Clarify Ownership and Structures
   Complex family or corporate setups may be tax-efficient, but they must be clearly documented and easily explainable. We work with clients to simplify the presentation of ownership, ensure all beneficiaries are accounted for, and confirm that records match what HMRC would expect to see.

3. Prepare for the Unexpected
   While dawn raids are still relatively uncommon, they are increasingly used in targeted, high-risk investigations – particularly in suspected fraud cases or when records are at risk of being altered. We help clients establish basic protocols so that staff and family know who to contact, how to behave, and how to protect sensitive materials. Peace of mind comes from knowing you’re prepared.

4. Act Early on Potential Issues
   If you suspect something was missed or filed incorrectly in the past, don’t wait. A well-timed voluntary disclosure can often lead to reduced penalties, avoid escalation and prevent a criminal investigation altogether. We guide clients through this process discreetly and efficiently, ensuring their position is protected.

5. Use Expert Representation from the Start
   When HMRC reaches out, responding alone can inadvertently create more problems. With us in your corner, every document and response is reviewed, strategically framed, and delivered with authority. Our goal is always to de-escalate early and resolve efficiently, shielding you from unnecessary stress or exposure.

How we support you

Our clients include successful business owners, international investors, and family offices – all with complex financial lives that demand clarity and foresight. In every case, we take a calm, structured approach focused on early action and risk reduction.

We help clients put in place the right protocols for potential HMRC contact, from documentation reviews to internal communication plans. For family offices and corporate groups, we advise on how to prepare teams discreetly and confidently for possible visits or requests for information.

Our goal is simple: peace of mind, built on accurate records, full compliance, and expert support at every stage.

Final thought: Staying ahead is the best defence

Nobody wants to be part of a headline investigation. But for the vast majority of people, these situations are entirely avoidable with planning and sound advice.

However, with HMRC’s agenda becoming more assertive, now is the time to review, reflect, and act. We’re here to help you do exactly that – with discretion, clarity, and the experience that comes from resolving dozens of inquiries successfully.

Let’s talk through your current structure – confidentially, calmly, and with a clear plan for what comes next.