Can an accountant help with HMRC property enquiries?

At Towerstone Accountants we provide specialist property accountant services for landlords property investors and individuals dealing with property tax and reporting obligations across the UK. This article has been written to explain Can an accountant help with HMRC property enquiries in clear practical terms so you understand how the rules apply in real situations. Our aim is to help you make informed decisions avoid costly mistakes and know when professional advice is worthwhile.

As a chartered accountant running my own firm, I deal with HMRC property enquiries on a very regular basis. In my experience, property enquiries are some of the most stressful interactions landlords have with HMRC. They often arrive without warning, they can go back several years, and they tend to focus on areas where mistakes are easy to make even when there is no bad intent.

The short answer is yes, an accountant can absolutely help with HMRC property enquiries. In fact, in many cases, professional support is the difference between a controlled, proportionate review and a long, expensive, and emotionally draining investigation. In this article, I want to explain clearly how an accountant helps during an HMRC property enquiry, what HMRC are usually looking for, how enquiries typically progress, and why involving an accountant early is almost always the right decision.

This is written exactly how I explain it to landlords and property investors in real life, practical, clear, and grounded in how HMRC actually operate.

What HMRC property enquiries actually are

An HMRC property enquiry is HMRC reviewing your property related tax position to check whether income has been declared correctly and whether expenses and reliefs have been claimed properly.

These enquiries can relate to:

• Rental income from UK property

• Rental income from overseas property

• Capital gains tax on property sales

• Furnished holiday lets

• Property partnerships

• Buy to let portfolios

• Mixed use properties

An enquiry does not automatically mean HMRC believe you have done something wrong. Many are risk based or triggered by inconsistencies rather than allegations.

Why HMRC open property enquiries

HMRC open property enquiries for a variety of reasons.

Common triggers include:

• Mismatches between tax returns and information HMRC hold

• Land Registry data showing property transactions

• Letting agent disclosures

• Large or unusual expense claims

• Repeated losses

• Late or amended tax returns

• Rental income not matching mortgage data

• Tips or third party information

• Random compliance checks

Property is a major focus area for HMRC because errors are common and values are often high.

The different types of HMRC property enquiries

Not all property enquiries are the same.

HMRC may open:

• A full enquiry into your Self Assessment return

• An aspect enquiry focusing only on property income

• A compliance check covering specific tax years

• A capital gains tax enquiry following a sale

• A discovery enquiry going back several years

The scope matters greatly, and one of the first things an accountant will do is clarify exactly what HMRC are reviewing.

The biggest mistake landlords make when an enquiry starts

The biggest mistake I see landlords make is trying to deal with HMRC alone out of panic or fear of cost.

This often leads to:

• Over sharing information

• Poorly worded explanations

• Missing deadlines

• Inconsistent answers

• Admitting errors incorrectly

• Escalation of the enquiry

Once something is said or submitted to HMRC, it cannot be unsaid. This is why early professional input is so important.

How an accountant helps from the very start

The moment an HMRC property enquiry letter arrives, an accountant can step in and take control of the process.

At the outset, an accountant will:

• Read and interpret the HMRC letter carefully

• Identify the scope of the enquiry

• Clarify which tax years are involved

• Identify the deadlines and response requirements

• Communicate with HMRC on your behalf

• Reduce immediate stress and uncertainty

This initial structure sets the tone for the entire enquiry.

Acting as your buffer with HMRC

One of the most valuable roles an accountant plays is acting as a buffer between you and HMRC.

Once authorised, your accountant can:

• Deal directly with the HMRC officer

• Receive and respond to correspondence

• Frame answers professionally

• Challenge incorrect assumptions

• Keep communication focused and controlled

This protects you from saying too much or saying the wrong thing at the wrong time.

Understanding what HMRC are really asking

HMRC letters are often vague or broad.

An experienced accountant can read between the lines and identify what HMRC are actually concerned about.

For example:

• A question about expenses may indicate concern about overclaims

• A question about ownership may relate to income splitting

• A question about mortgage interest may relate to restriction errors

• A question about dates may relate to capital gains timing

Understanding intent allows responses to be targeted and proportionate.

Reviewing your property income properly

One of the first technical steps an accountant will take is reviewing your property income calculations.

This includes:

• Rental income declared

• Periods covered

• Treatment of advance rent

• Letting agent statements

• Gross versus net reporting

Errors here are common, particularly where agents are involved or where properties change hands mid year.

Reviewing property expenses in detail

HMRC property enquiries often focus heavily on expenses.

An accountant will review:

• Repairs versus improvements

• Capital versus revenue expenditure

• Apportionment of mixed use costs

• Timing of expense claims

• Replacement of domestic items relief

• Interest and finance cost treatment

• Legal and professional fees

This is an area where many landlords unknowingly make mistakes.

Repairs versus improvements explained properly

This is one of the most common HMRC challenge points.

An accountant will help distinguish between:

• Allowable repairs that can be deducted

• Capital improvements that must be added to the property base cost

This distinction is technical and case law driven. HMRC often challenge it, and good explanations backed by evidence matter.

Mortgage interest and finance costs

Since the restriction of mortgage interest relief, HMRC pay close attention to finance costs.

An accountant will check:

• That interest has been treated correctly

• That only allowable finance costs are included

• That personal and business elements are separated

• That restrictions have been applied properly

• That carry forward amounts are correct

Errors here can affect multiple tax years.

Jointly owned property and income splitting

HMRC regularly review jointly owned property.

An accountant will assess:

• Legal ownership

• Beneficial ownership

• Declared income splits

• Whether a Form 17 is required or valid

• Consistency across tax returns

Incorrect income splitting is a common trigger for enquiries.

Furnished holiday lets and HMRC scrutiny

Furnished holiday lets attract special tax rules and HMRC scrutiny.

An accountant can help by:

• Reviewing qualifying conditions

• Checking availability and letting tests

• Reviewing expense claims

• Reviewing capital allowance claims

• Checking CGT relief eligibility

HMRC often challenge FHL status, especially where usage is borderline.

Capital gains tax on property sales

If the enquiry relates to a property sale, the stakes can be high.

An accountant will review:

• Sale proceeds

• Acquisition costs

• Capital improvements

• Incidental costs

• Private residence relief

• Letting relief where applicable

• Reporting deadlines

• CGT calculations

CGT errors can result in large assessments if not handled properly.

Handling HMRC requests for information

HMRC often request documents during property enquiries.

These may include:

• Tenancy agreements

• Letting agent statements

• Bank statements

• Invoices and receipts

• Mortgage statements

• Completion statements

• Property valuations

An accountant ensures that:

• Only relevant information is provided

• Documents are presented clearly

• Context is given where needed

• Confidential information is protected

Managing deadlines and extensions

HMRC enquiries involve strict deadlines.

An accountant will:

• Diarise deadlines

• Request extensions where needed

• Ensure responses are timely

• Avoid penalties for late replies

This alone removes a significant burden from landlords.

Dealing with errors if they are found

If errors are identified, an accountant helps manage this properly.

This includes:

• Quantifying the error accurately

• Identifying affected tax years

• Assessing behaviour classification

• Making voluntary disclosures where appropriate

• Negotiating penalties

• Reducing interest and sanctions

Handling errors professionally often leads to far better outcomes than denial or delay.

Behaviour and penalties explained properly

HMRC penalties depend heavily on behaviour.

An accountant will help demonstrate that errors were:

• Careless rather than deliberate

• Not concealed

• Corrected promptly

• Fully disclosed

This can significantly reduce penalties and stress.

Negotiating with HMRC

Accountants are used to negotiating with HMRC.

This may involve:

• Challenging incorrect assumptions

• Arguing technical points

• Negotiating penalty reductions

• Agreeing payment terms

• Managing Time to Pay arrangements

HMRC respond very differently to professional representations than to emotional or informal replies.

Time to Pay arrangements for property tax

If an enquiry results in additional tax being due, an accountant can help arrange Time to Pay.

This can:

• Spread payments over time

• Protect cash flow

• Avoid enforcement action

• Reduce stress

Early engagement makes this far easier.

Keeping the enquiry within scope

One of the most important roles an accountant plays is keeping the enquiry within scope.

Without control, property enquiries can expand unnecessarily into:

• Other income sources

• Other tax years

• Other taxes

Clear, focused responses help prevent this.

Supporting you emotionally as well as technically

Property enquiries are not just technical. They are emotionally draining.

An accountant provides:

• Reassurance

• Perspective

• Clear explanations

• A plan of action

• Confidence

This matters far more than many people realise.

What happens at the end of a property enquiry

When the enquiry concludes, possible outcomes include:

• No change

• Adjustments agreed

• Additional tax due

• Penalties reduced or waived

• Advice on improving records going forward

An accountant ensures closure is clear and documented.

Learning from the enquiry

A good accountant will also help you learn from the process.

This may include:

• Improving record keeping

• Changing how expenses are tracked

• Reviewing ownership structures

• Planning future tax positions

• Reducing future enquiry risk

This turns a difficult experience into a valuable one.

Common myths about accountants and HMRC enquiries

I often hear landlords say:

• HMRC will think I am hiding something if I use an accountant

• Using an accountant makes it worse

• I should wait and see first

In reality, HMRC expect professional involvement and often prefer it.

Using an accountant early usually shortens enquiries rather than lengthening them.

When I strongly recommend getting help immediately

In my professional opinion, immediate help is essential where:

• Large sums are involved

• Multiple properties are owned

• Several years are under review

• Capital gains tax is involved

• Joint ownership is complex

• Furnished holiday lets are involved

• You are unsure of past returns

Waiting rarely improves outcomes.

Final thoughts from real world experience

So, can an accountant help with HMRC property enquiries. Absolutely, and in many cases, they are essential.

HMRC property enquiries are technical, detailed, and often emotionally taxing. Trying to navigate them alone is like representing yourself in a complex legal dispute. You might manage, but the risk is high and the cost of mistakes can be significant.

In my experience, landlords who involve an accountant early feel more in control, achieve better outcomes, and move on more quickly. The goal is not to fight HMRC, but to work through the enquiry calmly, professionally, and fairly.

HMRC property enquiries are not just about numbers. They are about process, communication, and judgement. An experienced accountant brings all three to the table.

You may also find our guidance on How do I report property income to HMRC and How can a property accountant help reduce my overall tax bill useful when exploring related property tax questions. For a broader overview of property tax reporting and planning topics you can visit our property hub which brings all related guidance together.