Should I respond to HMRC?

This article follows a response to a Taxation magazine readers’ forum query published on 26 February 2026.

During or towards the end of an investigation, HMRC may ask questions about whether a taxpayer took advice, to what extent they checked the advice etc. The query was whether the taxpayer had any obligation to respond to these questions and what (if any) repercussion there might be for not doing so.

Our response: The client has no obligation to respond to HMRC’s queries and the burden of proof in relation to a penalty initially rests with HMRC.

HMRC will determine the level of penalties based on ‘behaviour’ subject to the information available to it. If the taxpayer disagrees with the behavioural basis of the penalties, s/he will have to appeal and provide reasons that HMRC’s decision is incorrect.

Should the taxpayer appeal, HMRC then has the burden of defending the basis for the original penalties but the burden of proof for disproving HMRC’s assertion shifts to the taxpayer; the client will have to demonstrate that HMRC’s assessment of the behaviour is incorrect. This is demonstrated by Tribunal decisions including:

“HMRC bear the burden of proving that a person is liable to a penalty … whereas the taxpayer bears the burden of establishing that he or she has a reasonable excuse.” Massey and Massey t/a Hilden Park Partnership v. HMRC [2015] UKUT 405 (TC)

“…the appellant has the burden to prove any potentially applicable defence, such as a reasonable excuse for the default.” (Hilden Park LLP v. HMRC [2017] UKFTT 217 (TC)).

In order to discharge their burden of proof, the taxpayer will essentially be responding to the questions raised by HMRC initially, albeit this way takes longer and puts the taxpayer on the back foot; rather than giving reasons for HMRC to reduce the penalty at the beginning, the taxpayer is now trying to show HMRC why it is wrong. Trying to get someone to accept they are incorrect is considerably more difficult than helping them make the correct decision in the first place.

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