• Skip to main content
  • Skip to primary sidebar

DFC Accountants

Accountancy and Business Services in Cardiff, Wales

  • home
  • privacy statement
  • how we can help
    • accountancy
    • bookkeeping
    • VAT
    • payroll
    • taxation
    • share dealing losses
    • exit or succession planning
    • solutions for you
  • digital tax
  • meet the team
  • wealth management
  • advisory
  • news & updates
  • Login
  • contact us

Nudging the taxpayer – 12/11/2020

12th November 2020 by

HMRC uses data from many sources to cross check information reported on self- assessment tax returns. It could open an enquiry every time a mis-match is found, but this is expensive in terms of person-hours, and the time it takes to collect any additional tax.

Instead HMRC is experimenting with sending a standard letter to the taxpayer where a mis-match in data is found. The letter doesn’t state exactly what is missing from the return, but it is designed to nudge the taxpayer to review and correct the return where necessary. HMRC call these “one to many” letters.

This approach is light on manpower as the letter is generated automatically by the computer and the onus is on the taxpayer and their agent to investigate the issue and take any action required.

HMRC is currently comparing the 2018/19 SA tax returns to various data sets and is sending out nudge letters covering the following issues:

  • Deemed domicile
  • Statutory residence
  • Discrepancies with employer reported pay and benefits
  • Disposal of residential property which was not the main home
  • Investment income from financial institutions
  • Deferred consideration on sale of private company shares
  • Income of persons with significant control of a company

It is important to note that the nudge letter does not amount to a formal opening of an enquiry, but it does require action as HMRC may follow-up if the tax return is not amended.

The Chartered Institute of tax has reported all of the nudge letters it knows about, so keep an eye on its technical news page where you can see examples of the letters and the briefing HMRC has provided.

Written by the Tax Advice Network

Filed Under: Uncategorised

Primary Sidebar

Contact Us

02920 448 120
julie.burrows@dfcaccountancy.co.uk
Address:
2 Alexandra Gate
Ffordd Pengam
Cardiff, Wales, CF24 2SA

News & Blog

  • MAKING TAX DIGITAL (MTD) FOR VAT 13th January 2021
  • MAKING TAX DIGITAL (MTD) FOR INCOME TAX 13th January 2021
  • MAKING TAX DIGITAL – OVERVIEW 13th January 2021
  • Business Newsletter 13th January 2021
  • VAT domestic reverse charge – 07/01/2021 13th January 2021

© 2021 DFC Accountants Ltd · Site by The Clever Web Company

Address: 2 Alexandra Gate, Ffordd Pengam, Cardiff, Wales, CF24 2SA
Email: julie.burrows@dfcaccountancy.co.uk