The statistics, gathered from HMRC’s quarterly performance updates, show that the number of tax enquiries (referred to as ‘civil compliance checks’) opened by HMRC rose from 247,000 in the 2020/21 financial year, to 265,000 in 2021/22 and 299,000 in 2022/23. In total, this marks a 21.05% increase across these years.
The significant increase in compliance activity saw the tax office net £814bn in tax revenue in 2022/23 – an 11.3% jump compared to the previous year.
In the first quarter of the 2023/24 financial year (April to June 2023), the tax office has already opened 77,000 enquiries, meaning HMRC is on course to increase this for the third year running (308,000).
As a result, tax insurance provider, Qdos, has urged millions of self-employed workers and the growing number of people with side hustles to take note of HMRC ramping up its compliance activity.
Qdos CEO, Seb Maley, commented: “HMRC is clearly on a mission to increase tax receipts and we’re seeing first-hand experience of this. The number of self-employed workers being investigated by the tax office is noticeably on the rise.
“A far more active HMRC means that anyone working for themselves – whether a full-time freelancer or someone with a side hustle – should make sure they file their tax returns and pay their bills on time, as the bare minimum.
“But this is just a starting point. What’s often overlooked is that HMRC can investigate anyone at any time. You can never rule out a tax enquiry and all too often, people who have done nothing wrong are investigated. Without representation and protection, this can be a really stressful and expensive process.”
