HMRC nudge letters

10 March 2020
Author: Helen McGhee

HMRC continues to fight the good fight in its quest to cut down on tax avoidance and have recently been issuing further “nudge” letters to taxpayers who may have an income source or assets producing gains overseas and consequently an undisclosed outstanding UK tax liability. The letter reminds the taxpayer that HMRC have visibility on overseas income or gains via their network of global information exchange and the onus is on the taxpayer to regularise their tax affairs. Unforced disclosure will result in reduced penalties for non-compliance. 

Batches of these letters are being sent out weekly by HMRC and ultimately thousands are expected to be issued.  Some letters are accompanied by a certificate whereby the taxpayer can state that his tax position is up to date and all in order or that he needs to make a disclosure. Taxpayers need to ensure that they fully understand the statement they are making and the repercussions of making an inaccurate or incomplete statement before they return the form.

Changes have been made to the original wording of the letter but it still directs those who need to make a disclosure to the Worldwide Disclosure Facility which may not be appropriate in all cases, particularly as it does not offer protection or assurances against criminal investigation.

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