Have you received a letter from HMRC asking you to disclose unpaid taxes?

HMRC are now receiving lots of data from overseas jurisdictions via the Common Reporting Standard (CRS), as well as from Land Registry and from Companies House and are seeking to use this data to check that UK taxpayers have correctly reported their income and gains.

Without the manpower to check all of the data themselves, they are seeking to put the onus on taxpayers to double check the figures for them. They have been doing this by the way of “nudge letters”.

The letters can cover different areas of taxation, but tend to follow the same format – asking the taxpayer to check a certain aspect of their return, or suggesting that an individual has not declared income from a particular source, such as rental income or bank interest. The letter can ask the individual to either sign a declaration that everything has been reported, or invite them to participate in a disclosure through the Digital Disclosure Service.

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What should I do?

It can be intimidating receiving such a letter from HMRC, although it should be noted that it does not necessarily mean anything is wrong.

It is however important to take a careful look at your income and gains and consider whether everything has been correctly reported to HMRC. If you are sure that everything is in order and nothing has been missed, you can respond to HMRC to this effect.

​If there are income / gains that have not been reported to HMRC we can help you to compile the information required and submit the disclosure on your behalf.

HMRC will seek to charge interest and penalties on underpaid tax declared through this service, however every case is different and we will liaise with them to keep the penalties to a minimum wherever possible.