HMRC are sending 'Nudge letters' recently to individuals to check that their personal tax affairs are up to date and have been correctly disclosed on their UK tax returns. HMRC have issued these letters to taxpayers where via automatic exchange of information from other countries that the individual may have offshore income or gains. HMRC do not indicate which tax year it relates to, therefore it could be multiple.

HMRC generally give 30 days from the date of the letter to respond to these letters.

What action should I take?

There is no need to panic if you receive one of these letters, as HMRC have various reasons for sending them to individuals:

  • Discrepancies in the data received from overseas tax authorities which HMRC is unable to reconcile may be a reason for the request.
  • Changes to the individual personal circumstances or tax laws which have resulted in earlier advice obtained being out of date.
  • New information may be supplied to HMRC (e.g property purchases etc.) and this needs clarifying with them.

If you do receive a letter, we would recommend that you contact your usual tax advisor for support.


If you do have income and or gains to declare there are a variety of HMRC campaigns potentially available to you:

  • A disclosure can be made via the Worldwide Disclosure Facility, Let Property Campaign, and any Digital Disclosure Service or Contractual Disclosure Facility (deliberate omission) if there are income and/or gains to declare.
  • HMRC usually impose a 30-day timescale, however, if it is not practical to respond in this time, an extension will be required.

Tax consequences

There may be tax consequences of not providing a response to HMRC if later untaxed income and or gains are discovered:

  • HMRC may open an enquiry into an individual's tax returns for specific tax years
  • HMRC can impose penalties for failure to notify based on Potential Lost Revenue depending on the individual's behaviour. Penalties may vary but this can be up to 200% if it involved an offshore matter.
  • False statements could result in criminal prosecution

Price Bailey can take the burden of the HMRC enquiry from you by:

  • Preparing and filing of any undisclosed income and gains to HMRC
  • Responding to HMRC on your behalf if you receive such a letter.
  • If information does need to be disclosed to HMRC, we would be happy to discuss with you the various disclosure methods available and submit the disclosure for you

Originally published 22 March 2021

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.