HMRC issue 177,000 “nudge letters” in order to tax offshore income or gains

According to City AM, HMRC continue to pursue non compliant UK taxpayers by issuing nudge letters.  As previously covered,  HMRC’s use of nudge letters is a cost efficient way of recouping tax for the Exchequer without the need to launch a tax investigation into a taxpayer’s past tax compliance.  But beware, there are risks for both taxpayer and adviser alike.

About your offshore income and gains … … …

HMRC are pretty good at grabbing people’s attention by using such headings in their letters to taxpayers.  Such letters are often effective because their “intelligence sources” are pretty accurate.  I have seen letters in the past where HMRC have even quoted bank account numbers from the outset just to demonstrate how much detail they had at the time.  All targeting offshore income and gains.

It’s alright, it’s tax free!

They say that a little knowledge can be dangerous.  Likewise, being self taught off the internet can cause unexpected tax problems.  A lot of taxpayers around the work want to be able to say “it’s tax free”.

Offshore does not mean off HMRC’s radar

The fact a taxpayer has an offshore bank account or an offshore trust or offshore anything can raise or add to the concerns of HMRC.  Not so much as “what is there to hide” but more the fact that its not so transparent compared to being on the mainland UK.

Your overseas assets, income and gains

Hidden overseas assets

This is the heading of the latest nudge letter from HMRC.  Quite a snappy title and attracts most people’s attention to get them to read on further.  But then how does HMRC know that you have any overseas assets?  Or overseas income?  Or overseas gains?

Are you drowning under your tax investigation?

One of the symptoms of a tax investigation is the feeling that no matter what you do or say, you feel like you are drowning under the tax investigation.  You need to treat the cause, not the symptom.  You may need help to understand the cause but who do you turn to

HMRC are looking for your overseas assets, income or gains

In March 2021, another round of nudge letters have been issued.  This time they are following up on the information they have been supplied under the Common Reporting Standard (CRS).  Other than saying “we have information … … …”, HMRC don’t tell you what they know or rather suspect.  Yes HMRC has information on overseas assets – but is simple ownership leading to a tax liability?

Notices to provide documentation – whatever you do, don’t destroy it!

HMRC regularly obtain information and documentation from a number of sources.  More recently this is under the Common Reporting Standard (CRS).  But HMRC’s thirst for more and more can lead to HMRC issuing Notices to provide documentation under Schedule 36 Finance Act 2008.  The worst thing that can happen is the documentation is now destroyed.  This can lead to a fine or worst still, imprisonment.

HMRC issue latest round of “nudge letters”

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).