Can an accountant help with HMRC property enquiries?

This guide explains how an accountant can help with HMRC property enquiries including rental income checks, CGT disputes, evidence preparation and penalty reduction.

If HMRC opens an enquiry into your property income or a property disposal it can feel overwhelming. Many landlords and property owners panic because they do not fully understand what HMRC is looking for or what information to provide. In my opinion an HMRC property enquiry is one of those situations where having the right accountant makes an enormous difference. Property tax rules are complex and HMRC enquiries often involve several moving parts including rental accounts, allowable expenses, private use adjustments, property disposals, Capital Gains Tax and strict evidence requirements.

This guide explains whether an accountant can help with HMRC property enquiries, what they actually do, how they defend you, how they communicate with HMRC on your behalf and how they reduce the risk of penalties. I also explain the different types of property enquiries HMRC launches, the common triggers, what HMRC typically asks for and what happens if you try to handle the enquiry alone.

By the end you will know exactly how an accountant can support you and why professional help is usually essential when HMRC gets involved.

First: what is an HMRC property enquiry?

An HMRC property enquiry is an investigation into your tax affairs when HMRC believes:

  • Your rental income has been under declared

  • Your expenses may be incorrect or inflated

  • You have unreported property income

  • You may have failed to report Capital Gains Tax on a sale

  • Your property records are incomplete

  • Your figures do not match HMRC’s internal data

  • You have made errors in a previous return

These enquiries range from simple requests for clarification to full investigations of several years of tax returns.

There is usually nothing personal about an enquiry. HMRC has access to large amounts of data and property is one of the most heavily targeted areas for compliance.

In my opinion property enquiries are more common now than at any point in the past decade because HMRC’s data sources have expanded massively.

Can an accountant help with HMRC property enquiries?

Yes. An accountant can handle the entire enquiry on your behalf and in most cases should.

An accountant can:

  • Communicate directly with HMRC

  • Gather and present evidence correctly

  • Prepare reconciled rental accounts

  • Correct errors before they turn into penalties

  • Negotiate with HMRC about the scope of the enquiry

  • Challenge HMRC if they make incorrect assumptions

  • Calculate any tax due

  • Minimise penalties

  • Close the enquiry as quickly as possible

In my opinion having an accountant is the single most effective way to achieve a smooth and fair outcome.

What an accountant can do during an HMRC property enquiry

Below are the specific ways an accountant can help you when HMRC starts asking questions about your property affairs.

1. Act as your authorised representative

Once you sign a 64-8 authorisation form or provide digital authorisation, HMRC can speak directly to your accountant instead of contacting you. This means:

  • You avoid stressful conversations

  • All communication is clear, accurate and professionally handled

  • Nothing is said that could be misunderstood by HMRC

In my opinion this is one of the biggest benefits because HMRC letters and phone calls can be intimidating and easy to misinterpret.

2. Review HMRC’s enquiry notice and identify what HMRC is really asking

Most HMRC enquiry letters are broad and confusing. Some ask for information that is not actually needed and some contain assumptions that are incorrect.

An accountant will:

  • Break down the enquiry line by line

  • Identify the real issue

  • Limit the scope of the enquiry where appropriate

  • Push back on overly wide information requests

This often reduces the amount of paperwork and the duration of the enquiry.

3. Prepare accurate rental accounts or disposal calculations

Most HMRC enquiries start because the figures in the tax return look unusual or inconsistent.

An accountant can:

  • Recalculate your rental income properly

  • Correct allowable and disallowable expenses

  • Apply private use restrictions correctly

  • Reconcile rent received to bank statements

  • Prepare or correct Capital Gains Tax calculations

  • Identify missing reliefs or allowances

One small mistake can trigger an enquiry, but an accountant can correct errors before HMRC assumes the worst.

4. Provide evidence in the format HMRC prefers

HMRC has specific expectations for evidence. They may ask for:

  • Bank statements

  • Tenancy agreements

  • Mortgage statements

  • Letting agent statements

  • Repair receipts

  • Improvement invoices

  • Completion statements for property sales

  • Deposit protection paperwork

  • Capital Gains Tax computations

An accountant can compile this evidence in a clean, organised way that answers HMRC’s questions directly.

In my opinion the way evidence is presented can influence how quickly HMRC closes an enquiry.

5. Respond to HMRC’s questions professionally and accurately

HMRC often asks detailed questions such as:

  • Why your rental income changed between years

  • Why certain expenses increased

  • Whether a cost was a repair or an improvement

  • How you calculated your Capital Gains Tax

  • Why you did not declare rental income in previous years

An accountant will prepare clear, factual replies that satisfy HMRC’s concerns without offering unnecessary information.

This protects you and keeps the enquiry focused.

6. Identify tax mistakes before HMRC does

Sometimes HMRC’s suspicion is justified and there is a genuine error.

Common errors include:

  • Forgetting to declare Airbnb income

  • Missing months of rent

  • Incorrect expense claims

  • Treating improvements as repairs

  • Forgetting to declare Capital Gains Tax on a sale

  • Using incorrect dates for acquisition or disposal

  • Failing to declare foreign property income

An accountant will identify any mistakes and correct them proactively. HMRC is far more lenient when taxpayers correct errors voluntarily.

7. Negotiate penalties and reduce interest

HMRC can charge penalties based on:

  • Whether the error was careless, deliberate or concealed

  • Whether you told HMRC before they found out

  • How cooperative you are

  • The quality of your records

An accountant will:

  • Argue in your favour

  • Prove the error was accidental

  • Show evidence of good record keeping

  • Reduce the penalty category

  • Request suspension of penalties where possible

  • Ensure the tax is calculated correctly

In my opinion good representation can reduce penalties dramatically.

8. Challenge HMRC if they are wrong

HMRC sometimes makes incorrect assumptions about property tax. Examples include:

  • Treating improvements as repairs

  • Treating repairs as improvements

  • Misreading rental records

  • Misallocating expenses

  • Not applying Private Residence Relief correctly

  • Incorrectly applying Lettings Relief

  • Miscalculating CGT splits for jointly owned property

Your accountant will challenge incorrect conclusions and provide evidence to prove your position.

9. Close the enquiry as quickly as possible

HMRC enquiries can drag on for months or even years if not handled properly. An accountant will:

  • Provide correct information the first time

  • Avoid unnecessary delays

  • Keep HMRC focused

  • Push for closure once the issues are resolved

In my experience enquiries handled by accountants generally resolve faster than those handled by taxpayers alone.

What types of HMRC property enquiries are most common?

HMRC targets property owners because they have access to huge amounts of external data including:

  • Land Registry

  • Letting agent returns

  • Airbnb and booking platform data

  • Council tax and licensing records

  • Deposit protection schemes

  • Mortgage lender data

  • Overseas property registers

  • Capital Gains Tax 60 day reports

  • Bank data under anti money laundering rules

These data sources create very specific enquiry triggers.

1. Undeclared rental income

HMRC regularly checks:

  • Airbnb

  • Booking.com

  • Letting agent records

  • Landlord licensing schemes

  • Deposit protection records

If someone appears to be renting property but has not declared income, an enquiry will follow.

2. Misclassified expenses

HMRC often questions:

  • Large repairs

  • Improvements treated as repairs

  • Unusually high expenses

  • Travel and mileage claims

  • Mortgage interest after the rule changes

3. Missing Capital Gains Tax

This is extremely common.

Triggers include:

  • Selling a rental property without submitting a 60 day CGT return

  • Understating the gain

  • Forgetting to include improvements

  • Incorrect acquisition or disposal dates

  • Not reporting inherited property correctly

4. Foreign property income

HMRC receives data from overseas tax authorities under CRS rules. Undeclared foreign rental income is a major trigger.

5. Property owned jointly but income allocated incorrectly

If ownership split is 50/50 but one person declares 100 percent of the income without a Form 17 declaration, HMRC may ask questions.

6. Late or inconsistent returns

If your rental accounts fluctuate wildly HMRC may investigate.

What happens if you respond without an accountant?

You can respond yourself but in my opinion the risks are significant.

Risks include:

  • Misunderstanding HMRC’s questions

  • Over sharing information

  • Providing incorrect figures

  • Accidentally admitting liability

  • Missing deadlines

  • Agreeing to HMRC’s calculations even when they are wrong

  • Paying more tax or penalties than necessary

Without an accountant you are dealing with HMRC on unequal footing. HMRC officers know the tax rules far better than most taxpayers.

An accountant equalises that imbalance.

Can an accountant stop an enquiry from escalating?

Yes. Good representation can prevent:

  • Escalation to a full investigation

  • Multiple years of enquiries

  • Penalties increasing from careless to deliberate

  • HMRC extending the enquiry to other income sources

  • HMRC demanding unnecessary documents

  • Further reviews of previous returns

In my opinion the quicker an accountant steps in, the lower the risk of escalation.

Can an accountant help even if the enquiry has already started?

Yes. Even if you have already received letters or spoken to HMRC an accountant can take over at any stage.

They can:

  • Request HMRC pause the enquiry

  • Review everything you have already provided

  • Correct mistakes in earlier replies

  • Build a new strategy to close the enquiry

  • Protect you from further issues

It is rarely too late to bring in professional support.

Real world examples

Example 1: Rental income mismatch

HMRC launched an enquiry because Airbnb income was not shown in the tax return. An accountant reviewed the records, corrected the income, offset legitimate expenses and negotiated a low penalty because the error was careless not deliberate.

Example 2: Incorrect CGT calculation

A landlord calculated their own Capital Gains Tax on a property sale but missed £25,000 of allowable improvements. HMRC questioned the gain. The accountant recalculated correctly and reduced the tax by over £7,000.

Example 3: Joint property incorrect split

A couple declared rental income 100 percent to the lower earning spouse despite owning the property 50/50. HMRC opened an enquiry. The accountant filed a Form 17 retrospectively, provided evidence of unequal beneficial ownership and avoided penalties.

Example 4: Foreign property income

HMRC received data from another country showing rent received abroad. The accountant helped the client make a voluntary disclosure and reduced penalties to near zero.

In my opinion: the key reasons you should use an accountant for an HMRC property enquiry

If I summarise the most important points:

  1. Property tax rules are complex and easy to get wrong.

  2. HMRC has extensive data so assumptions must be corrected quickly.

  3. An accountant protects you from saying the wrong thing.

  4. They prepare accurate calculations that HMRC trusts.

  5. They reduce penalties and interest significantly.

  6. They have experience negotiating with HMRC.

  7. They can close the enquiry faster and with less stress.

In my opinion anyone facing an HMRC property enquiry should seek professional help immediately.

Final thoughts

An accountant can absolutely help with HMRC property enquiries and in most cases you should not handle them alone. Property enquiries involve complex tax rules, strict evidence requirements and serious penalties if things go wrong. An accountant can manage the entire process from responding to HMRC letters to negotiating penalties and preparing corrected figures. They protect your rights, minimise tax liabilities and ensure the enquiry closes as efficiently as possible.

In my opinion proactive support from a qualified accountant is essential for peace of mind and the best possible outcome.