posted 10th December 2025
Tax Evasion Penalties for the Self-Employed – What HMRC Can Do and How We Protect You
If you’re self-employed and worried about tax evasion penalties, undeclared income, cash jobs, or an HMRC letter, you are not alone, and you do not have to face HMRC by yourself.
At Tax Investigation Helpline, we help self-employed individuals every day who are being investigated, questioned, or pressured by HMRC.
Getting proper expert help before you respond to HMRC can dramatically reduce penalties, prevent escalation, and protect you from HMRC misinterpreting innocent mistakes as deliberate wrongdoing.
We take over all communication with HMRC, challenge their assumptions, defend your position, and work to achieve the best possible outcome for you.
If you have received a letter or think HMRC may be looking closely at your income, speak to us first, one wrong reply can make things much worse.
Get Self Employed Tax Investigation Advice
What Counts as Tax Evasion for the Self-Employed?
HMRC defines tax evasion as deliberately paying less tax than legally owed. For self-employed people, this can include:
- Not declaring all income (including cash or online sales)
- Under-reporting turnover
- Inflating or inventing expenses
- Incomplete or misleading records
- Hiding earnings in personal or different bank accounts
- Failing to register as self-employed
- Not declaring side jobs or hobby income
But here’s the truth:
Many cases HMRC calls “deliberate” turn out to be misunderstandings, poor bookkeeping or accountant mistakes, not fraud.
This is exactly where our defence work becomes crucial.
HMRC Penalties for Tax Evasion
HMRC penalties depend on the behaviour they believe took place:
1. Careless (0–30% penalty)
A mistake or oversight. No intent to mislead.
2. Deliberate (20–70% penalty)
HMRC believes you knowingly underpaid tax.
3. Deliberate & Concealed (30–100% penalty)
HMRC believes you actively hid the income.
These penalties are added on top of the tax owed and interest. A £5,000 undeclared amount can easily become £15,000 or more once penalties and interest are added.
We work to downgrade HMRC’s behaviour classification, often reducing penalties drastically, or removing them entirely.
How Far Back Can HMRC Go?
- 6 years for careless errors
- 20 years for deliberate behaviour
This is one reason HMRC allegations are so serious, a single mistake can snowball into years of assessments.
How HMRC Investigates the Self-Employed
A suspected tax evasion case can lead to:
1. A Compliance Check
HMRC asks for bank statements, invoices, receipts and explanations.
2. A Full Enquiry
Multiple years of tax returns and business accounts examined.
3. A COP9 Investigation
Used when HMRC believes deliberate tax fraud has occurred. This is extremely serious.
4. Criminal Investigation
Rare, but possible for large or concealed income.
Investigations are often triggered by:
- AI-flagged bank deposits
- Cash jobs
- Online marketplace income
- Ex-partner or public whistleblowing
- Lifestyle not matching declared income
- Accountant mistakes
What Tax Investigation Helpline Does to Help – From the Start
1. We Take Over All Contact With HMRC Immediately. As soon as you appoint us, HMRC must speak to us, not you. This protects you from:
- Saying something HMRC misinterprets
- Submitting documents incorrectly
- Admitting fault when no fault exists
- Escalating a simple issue into a major one
- We remove the pressure instantly.
2. We Challenge HMRC’s Assumptions and Protect Your Rights
- Challenge incorrect assumptions
- Demand evidence
- Correct errors in HMRC’s calculations
- Push back when HMRC overreaches
- Prevent behaviour being labelled “deliberate” unfairly
3. We Build a Strong, Evidence-Based Defence
- Reconstruct income
- Justify your expenses
- Prepare explanations
- Demonstrate non-deliberate behaviour
- Reduce years assessed
Our aim is always to downgrade penalties and minimise liability.
Contact Tax Investigation Helpline
If HMRC is investigating you for tax evasion or you are worried you’ve made mistakes as a self-employed person, don’t panic, and don’t deal with HMRC alone.
At Tax Investigation Helpline, our specialists defend you from penalties, challenge HMRC assumptions, and work to secure the best possible outcome.
Contact us today for confidential expert help before responding to HMRC.
Confidential, Expert Advice.
