Most HMRC enquiries now start with data, not tip-offs. Here is what HMRC can see, the red flags that trigger a letter, and what to do if some of your income was never declared.
HMRC's Connect system cross-matches data from banks, online platforms, card providers, Land Registry, letting agents, overseas tax authorities and crypto exchanges against what you declared.
An unprompted disclosure of a careless error can carry no penalty. Once HMRC find it, the minimum is 15%, and for deliberate behaviour the minimum rises from 20% to 35%.