It can be unsettling to receive a letter from HMRC about your tax return mostly when you are unsure what triggered the correspondence. However, it is important to remember that not all HMRC letters indicate a problem. There are many instances where the letters were a routine reminder, requests for clarification or notification of changes.
Whether you are being asked to submit missing information, correct an error or even provide documents for a compliance check, taking the right steps early on can make the process smoother. Here is what you can do if you receive a HMRC letter:
Receiving a letter from HMRC
- Do not ignore it: It does not matter how minor the letter may seem, always open and read any letter received from HMRC carefully. Ignoring the letter could lead to penalties for late filing or payment or delays in processing refunds or escalation to formal investigation or enforcement.
- Understand the type of letter: The common types of letters that HMRC sends are:
- Filing Reminder: It is a prompt to submit your self-assessment tax return before the deadline.
- Request for information deadline: HMRC may ask for supporting documents such as bank statements, invoices
- Correction notice: HMRC may have adjusted your return due to errors or missing information.
- Enquiry or investigation letter: It could mean that HMRC is reviewing your tax affairs.
- Repayment letter: It could be a letter for notification of a tax refund.
- Check the deadline: Usually most HMRC letters have a response deadline and missing the deadline can lead to automatic penalties, assumptions made by HMRC without your input or further legal action.
- Seek professional advice: It is wise to consult a tax adviser, accountant or HMRC-authorised agent if the letter involves a compliance check, a large amount of tax or a suspicion of fraud or avoidance.
- Keep copies of everything: It is smart to save a copy of the HMRC letter, keep a copy of your reply, any supporting documents and record the date you sent your response.
Examples of Common HMRC letters
Below are some of the most common types of HMRC letters you may encounter:
- Late filing Penalty Notice: The letter is to inform you that a penalty has been applied due to failure to submit your return in time. You must file your return immediately or you can appeal the penalty if you have a valid reason.
- Compliance check letter: A notice can be received from HMRC if it is reviewing a specific part of your tax return. You must cooperate fully and provide the requested information.
- Tax Repayment Notification: The letter notifies you that HMRC owes you a refund. You must confirm if the refund is correct and provide band details through your secure personal tax account.
Conclusion
Receiving a letter from HMRC and having HMRC enquiries can be stressful but knowing the type of letter and what it means is the first step toward resolving the issue calmly and efficiently. The key is to read carefully, respond promptly and seek help if needed.
By understanding common types of HMRC correspondence and staying organised with your tax affairs you can avoid unnecessary penalties and maintain good standing with HMRC.