HMRC issue latest round of “nudge letters”

Writing a letter

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Periodically HMRC issue “nudge letters” to taxpayers as a means of persuading them to reconsider their past UK tax compliance. The content of such letters is based on information already received by HMRC form any of its numerous sources including under the Common Reporting Standard (CRS).

What should taxpayers do?

Seek specialist advice. Do not ignore such nudge letters.

It may be that there is nothing wrong.  It may be that the information received by HMRC is wrong.   Or it may be incomplete or misleading.  On the other hand, you may have made an error and/or there is something amiss.

Which areas are currently under the spotlight?

HMRC are issuing letters where:

  • No return for disposals of residential property (and there is no relief under PPR);
  • No return for Annual Tax on Enveloped Dwellings (ATED);
  • P11D entries inconsistent with personal Tax Returns;
  • No return for share disposals and earn-outs.

The information received by HMRC is sparse and may be no more than reporting the headline news and little by way of any detail.

What should I do?

If you receive such a letter, don’t ignore it.  HMRC do track what happens on each letter.  If HMRC are ignored, HMRC will investigate.  If an incomplete answer is given, HMRC will investigate. The only way to avoid an investigation is to answer the letter fully.  But to do that, you might want to seek specialist advice beforehand.  To know what sort of information has may dictate how you answer the letter.  

Help is at hand

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