The UK’s 4.3m self-employed workers have been advised to prioritise their tax compliance after official HMRC data shows that the tax authority opened 299,000 tax enquiries last year – a 52,000 jump equivalent to 21% compared to two years before.

The statistics, gathered from HMRC’s quarterly performance updates, show that the number of tax enquiries (referred to as ‘civil compliance checks’) opened by HMRC rose from 247,000 in the 2020/21 financial year, to 265,000 in 2021/22 and 299,000 in 2022/23. In total, this marks a 21.05% increase across these years.

The significant increase in compliance activity saw the tax office net £814bn in tax revenue in 2022/23 – an 11.3% jump compared to the previous year.

In the first quarter of the 2023/24 financial year (April to June 2023), the tax office has already opened 77,000 enquiries, meaning HMRC is on course to increase this for the third year running (308,000).

As a result, tax insurance provider, Qdos, has urged millions of self-employed workers and the growing number of people with side hustles to take note of HMRC ramping up its compliance activity.

Qdos CEO, Seb Maley, commented: “HMRC is clearly on a mission to increase tax receipts and we’re seeing first-hand experience of this. The number of self-employed workers being investigated by the tax office is noticeably on the rise.

“A far more active HMRC means that anyone working for themselves – whether a full-time freelancer or someone with a side hustle – should make sure they file their tax returns and pay their bills on time, as the bare minimum.

“But this is just a starting point. What’s often overlooked is that HMRC can investigate anyone at any time. You can never rule out a tax enquiry and all too often, people who have done nothing wrong are investigated. Without representation and protection, this can be a really stressful and expensive process.”