HMRC tax deadline – Accountant reveals 5 key investigation triggers

Liam Palmer says: “There are several common factors that can increase the likelihood of an HMRC enquiry or investigation for a UK limited company.

These include:

• late corporation tax, VAT, or PAYE filings
• repeatedly amending submitted tax returns
• large or ongoing director’s loan accounts
• business figures that don’t align with bank activity or online sales records
• a mismatch between declared income and lifestyle

In a post on his Instagram account, he says: “Understanding these HMRC risk factors helps UK business owners and company directors stay compliant, reduce stress, and avoid unnecessary HMRC enquiries.”

He adds an important caveat in his post: “It’s important to note that HMRC investigations can occur at random and are not limited to the reasons listed above. This post is for educational purposes only and is not financial or tax advice.”

This comes as new research shows UK small businesses are investing nearly £5bn a year in tax and accounting software.

HMRC’s Making Tax Digital for Income Tax changes come into effect from April 2026, requiring sole traders and landlords to use approved digital software to submit quarterly updates and their end of year tax return.

New research from Monzo reveals UK small businesses invest nearly £5 billion a year on tax and accounting software, with more than a quarter (28%) of sole traders saying they’re not confident they’ll be ready for the upcoming tax changes.

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The free, HMRC-recognised tax tool, powered by Sage’s embedded services technology, allows anyone with a free Monzo Business account to submit tax updates directly to HMRC from the Monzo app, offering a simple, in-app filing option for straightforward needs, while many businesses will continue to use broader accounting software and advisor support as their needs grow.

Jennifer Staves, Deputy Director, Strategic Design: Making Tax Digital, at HMRC, said: “Making Tax Digital for Income Tax will help people keep clearer records and get their tax right.

“Using software which has been recognised and approved by HMRC will make it easier for sole traders and landlords to meet the new requirements and be ready ahead of April 2026.”