HMRC nudge letters

9th June 2021

Over the last year HMRC have issued a significant number of ‘One to Many’ communications commonly known as ‘nudge letters’.

The nudge letters issued to date have covered a wide range of topics including overseas income and gains, Coronavirus Job Retention Scheme, Research & Development, Annual Tax on Enveloped Dwellings, Capital Gains Tax (CGT) on property disposals and CGT on deferred consideration on business disposals. HMRC receives data from a vast number of sources and believe that the use of nudge letters provides a cost-effective approach to communicate with a large number of taxpayers.

Nudge letters are a standard communication on a specific topic from HMRC to a large group of taxpayers. The letters to date relate either to where HMRC have identified a potential loss of tax or are an educational exerciseThe communication can be delivered by letter or digital means, including Personal Tax Accounts, emails or SMS texting. It is worth noting that agents do not always receive a copy of these communications from HMRC. The communications are aimed at encouraging taxpayers to review their own tax affairs and voluntarily correct any errors or omissions. It is important to know that a nudge letter is not a statutory enquiry into a taxpayers affairs. However, the letters should not be ignored, and any appropriate action must be taken.

If HMRC subsequently open an enquiry and find an error, failure to take action following receipt of a nudge letter could lead to higher penalties being charged on culpable duties. Our experience has shown that there can be inaccuracies with some of the information held by HMRC, or it has been interpreted incorrectly. If you have received a nudge letter and HMRC invite you to respond, you should do so before the deadline. This does not mean signing and sending the certificate to HMRC. There is not a statutory requirement to do so and we do not recommend the completion of these certificates; a letter to HMRC will be sufficient. We recommend you seek professional advice following receipt of an HMRC nudge letter or statutory enquiry. Even if you have not received a letter from HMRC but have found a mistake in your filings to HMRC and require professional advice, please contact the Tax Disputes and Resolutions team at haysmacintyre.

Danielle Ford

Partner, Head of Tax Disputes & Resolutions
+44 20 7969 5591
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