April 10, 2024
Article
From 5 February, HMRC have been issuing ‘nudge’ letters to taxpayers where they suspect there may be unreported company dividends or distributions by the taxpayer.
HMRC have reviewed the company accounts and, where there has been a large drop in reserves but a similar level of dividend or distribution has not been reported on the respective taxpayers’ returns, a letter may be sent out.
The letter invites the taxpayer to review their affairs and to either make a disclosure online if they have unreported income to disclose or to let HMRC know that they have no further income to declare. The letters provide 30 days for the taxpayer to respond.
It is important to note that these letters should not just be ignored. Failure to respond could lead to a compliance check and a charge for higher penalties.
If you receive a letter like this, please feel free to contact me or your usual Albert Goodman point of contact.