Have you been sent a ‘nudge letter’ by HMRC?

Have you been sent a ‘nudge letter’ by HMRC?

HMRC have been issuing nudge letters to taxpayers who they believe may have either underpaid tax or made a mistake on their tax returns. It may be that your tax affairs are up-to-date and correct however if you do receive a letter and fail to respond, it could have implications such as tax enquiries, penalties or even criminal prosecution.

What is a nudge letter?

HMRC can obtain information relating to your tax affairs from third parties. For example, HMRC and overseas authorities are increasingly sharing data and it could be that HMRC now has knowledge of overseas bank accounts, rental income or investments that you have not previously disclosed in the UK. HMRC may send you a nudge letter as a reminder that your tax returns may need to be reviewed giving you the opportunity to make a voluntary disclosure.

What should I do if I receive an HMRC Nudge Letter?

  • The worst thing you can do is nothing. If you do not reply, then HMRC will be in contact again and may open a full enquiry into your affairs which will be costly and stressful.
  • If you believe your tax affairs are up-to-date and correct, you should reply to HMRC by either using the ‘Certificate of Tax Position’ they provide with the nudge letter, or by writing separately to them.
  • If your tax affairs do require updating, there are a number of options depending on what type of income or gains you wish to disclose. For example, it may be possible to submit an amended tax return for the year in question, or you can make a separate disclosure via specific provisions, such as the Worldwide Disclosure Facility or Let Property Campaign.


HMRC usually ask that disclosures are made within 30 days. Where it not feasible to gather the information and present this to HMRC in a suitable format in that time period it may be possible to request an extension to this deadline. We have previously assisted clients in negotiating an extended time period with HMRC and their disclosures.

We understand that a nudge letter from HMRC will be unwelcome, but it should be used as the opportunity to bring your tax affairs up to date and ensure you move away from HMRC’s spotlight.

Failure to make a disclosure may result in HMRC opening an enquiry into an your tax affairs for one or more tax years. Should this occur it is important to note that any penalties applied by HMRC will be higher than those which can be applied under the voluntary disclosure rules, therefore prompt action will likely cost you less in the long run.

HMRC take tax evasion very seriously and any false statements or deliberate concealment could result in criminal prosecution.

How can Meston Reid & Co help?

Meston Reid has assisted clients who have received nudge letters and subsequently submitted voluntary disclosures to HMRC.

We can provide guidance to you and help you respond to HMRC on your behalf if you receive such a letter. We can also help prepare and file any undisclosed income and gains to HMRC using the appropriate facility and liaise with HMRC on your behalf.

Should you wish to discuss this further, please don’t hesitate to email Adrian Johnston, Tax Manager at or speak with your usual Meston Reid & Co contact.