Undeclared income or gains – it’s time to come forward.

Date posted: 24th Nov 2022

We are noticing a lot more in the professional press about HMRC issuing nudge letters to taxpayers in respect of potential errors on their tax returns.

HMRC have previously written to director-shareholders to ask about whether all dividend income is being reported and to individuals with overseas investments, asking if they declared all the UK tax on foreign income and gains.

Similarly, HMRC are nudging landlords who perhaps aren’t registered with HMRC about undeclared rental income and capital gains. HMRC are accessing this information from a wide range of third parties including HM Land Registry and tenancy deposit schemes (which are registered with the Government). HMRC are also nudging taxpayer who may have mis-claimed reliefs such as rollover relief on the sale of one buy to let property and reinvestment into the acquisition of another. Whilst this is a legitimate relief it is intended for trading businesses, rather than residential BTL landlords.

HMRC was given another £79m in the recent Autumn Statement to continue to tackle tax avoidance and evasion.

By coming forward to HMRC with details of undeclared income tax or capital gains tax liabilities, it will mean that HMRC will apply a lower level of penalties to any undisclosed taxes. In some cases, depending upon the circumstances, we have been able to agree with HMRC that there is an element of reasonable excuse and waive penalties.

If you have any queries regarding how to approach HMRC in respect of any type of undeclared income or gains, please get in touch.


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