HMRC has recently launched a “One to Many” letter campaign directed at individuals registered for Self-Assessment who may have undeclared income from property lettings or property sales. This ‘nudge letter’ aims to address potential non-compliance and give taxpayers the opportunity to meet their obligations without an investigation being launched.
What the Letter States
The letter informs recipients that HMRC possesses information indicating they might have received income from property lettings or the disposal of property. Consequently, they may owe tax on rental income or be liable for capital gains tax (CGT). This communication is a reminder for taxpayers to review their financial affairs and address any discrepancies promptly.
Recipients of the letter are given two options:
- Make a Disclosure: If the individual has undeclared income or gains, they are invited to disclose the details via HMRC’s online portal.
- Confirm No Income to Declare: If the individual believes they have no undisclosed property income or gains, they are required to inform HMRC within 30 days of the letter’s date.
Consequences of Non-Compliance
Failure to respond to the letter could result in HMRC initiating a compliance check. Such an investigation may uncover outstanding tax liabilities and could lead to penalties or fines. The compliance check process can be time-consuming and stressful, emphasising the importance of timely and accurate responses to HMRC’s correspondence.
What to do if you receive a letter
If you receive one of these letters, it is essential to act quickly. Assess your property income and gains to ensure all relevant taxes have been declared.
The expert team here at Ormerod Rutter will be able to help you to identify if you have any undisclosed income or capital gains and take the next appropriate steps. Contact us on 01905 777600 or email hello@ormerodrutter.co.uk.
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