What should you do if you receive an HMRC letter?

What should you do if you receive an HMRC letter?

Monday, 12 October 2020

A few years ago, a study by IBM found that 90% of all data in existence had been created in the previous two years. As anyone who’s seen the recent Netflix documentary, ‘The Social Dilemma’, will tell you, the advance of technology has meant there’s little we do as individuals which isn’t recorded and scrutinised by someone.

HM Revenue & Customs (HMRC) are no exception to this trend and the number of sources of information they can draw upon is ever increasing. One area where they appear to be focusing their attention at the moment is sharing information with the tax authorities in other countries about income paid to people in the UK using the Common Reporting Standard.

Where the information HMRC receive doesn’t tally with what an individual has reported to them on their Self-Assessment tax return, they’ll be writing to ask taxpayers to confirm that all is as it should be or confess any past mistakes. So, what should you do if you receive one of these HMRC letters?

As with any data, it’s important to check that it’s accurate. If you’ve ever let someone use your phone to make a purchase and spent the next month getting targeted ads for products you’d never buy, you’ll know that sometimes your details can link you to things that weren’t your doing. You’re going to have to put in the legwork to check.

What you mustn’t do is ignore the letter, even if you think HMRC are wrong. Those ads will go away if you ignore them long enough, but HMRC won’t! Most HMRC letters will provide a deadline by which a reply is required. If you find something you missed, tell them. If you think they’re wrong, tell them. If you need more time to check… well, you get the idea.

If you do believe they’re wrong, think carefully before signing the declaration enclosed with the letter. What the HMRC letter doesn’t tell you is that you are under no obligation to do so. Moreover, if you do sign the declaration, then subsequently find you had missed something, (even by accident or something very small), or just ticked the wrong boxes on the form, HMRC will take a dim view of this.

The certificate also provides little room for detail or explanation. A letter setting out the full facts of your situation works better, or even a call to HMRC to ask for more details of what they have found; it may jog your memory.

Of course, the best way to straighten out any issues with your tax affairs is to get in first. Don’t wait for HMRC to come to you. It really does help to show willing and coming forward unprompted will work in your favour when the possibility of penalties for errors is considered.

Need help?

It’s a common misconception that money invested overseas doesn’t have consequences for your tax position here. We would be happy to discuss any concerns you might have. You can find contact details on the Our People section of the Larking Gowen website. Alternatively, call 0330 024 0888 or email

The consequences if you don’t could be more expensive than the ads in your Facebook feed.

Chris Bale


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