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THE NUMBER OF INHERITANCE TAX (IHT) ENQUIRIES JUMPED BY OVER A THIRD (38 PER CENT) IN THE PAST YEAR, ACCORDING TO DATA OBTAINED BY PRICE BAILEY, THE TOP 30 ACCOUNTANCY FIRM. 09:17, 04 Jun

2025 Thousands are rushing to check whether they have broken a HMRC rule after an Inheritance Tax change. The number of Inheritance Tax (IHT) enquiries jumped by over a third (38 per cent)

in the past year, according to data obtained by Price Bailey, the Top 30 accountancy firm. According to data obtained from HMRC, there were 4,171 formal IHT enquiries in 2024/25, up from

3,028 in 2023/24. The number of IHT enquiries in 2024/25 was still below the pre-pandemic highs when HMRC routinely undertook more than 5,000 enquiries every year. Price Bailey points out

that at the same time as formal enquiries have surged, the proportion resulting in amendments to IHT returns has fallen. The 4,171 formal IHT enquiries in 2024/25 resulted in amendments to

1,885 returns, just 45 per cent. READ MORE ALL THE PARTS OF ENGLAND SET FOR 'AT LEAST 30C' NEXT WEEK IN UK HEATWAVE This compares to 69 percent in 2023/24 (2,094 amendments out of

3,028 enquiries) and 84% in 2022/23 (2,645 amendments out of 3,163 enquiries). Nikita Cooper, Director at Bailey, commented: “HMRC is coming under increasing pressure to clampdown on

non-compliance and boost the tax take as the Government seeks to balance fiscal responsibility with economic growth.” Article continues below “After the lull in activity in recent years,

HMRC is now ramping up scrutiny of returns and this upward trend is expected to continue as more estates are caught in the inheritance tax net," Cooper said. She adds: “HMRC is becoming

less discriminate in the inheritance tax returns it is enquiring into as it casts its net wider. Less than half of enquiries resulted in any tax uplift, which suggests that the customer

compliance team need to take a more targeted approach. This is unfair on the taxpayers who are coping with bereavement and doing the right thing by making full and accurate disclosures.”

Cooper says: “The IHT reporting system is very archaic, with paper forms being processed manually. By stepping up the number of formal enquiries, HMRC’s strike rate has fallen off a cliff.

"The system is so backward that HMRC can’t even tell us how much tax was collected from these enquiries. In an increasing number of cases, the answer is almost certainly nothing.”

According to Price Bailey, with the thresholds at which estates are eligible to pay IHT being frozen and not accounting for rising property prices and inflation, the number of individuals

needing to file IHT returns is likely to increase. Additionally, the impending changes for farmers and business owners, with the restriction of certain IHT reliefs (namely Business Relief

and Agricultural Property Relief), as well as pensions being brought within the scope of IHY from 6 April 2027, will significantly increase the amount of IHT being collected by HMRC. Article

continues below Cooper says: “We are likely to see much greater emphasis on compliance as the number of estates eligible for inheritance tax and the amount collected rises sharply in the

coming years. "The current paper-based filing system is already buckling under the strain and HMRC will need to get much better at sifting out inaccurate returns from those who are

doing the right thing.”