Nudge letters (sometimes called "one-to-many" letters) are sent by HMRC to groups of taxpayers they believe may have underpaid tax. These letters are not formal enquiries but serve as a warning based on data shared with HMRC from other sources, such as overseas tax authorities, banks, or digital platforms.
HMRC uses nudge letters to prompt taxpayers to take action voluntarily, rather than launching individual compliance checks or full enquiries.
Common topics for nudge letters include:
Receiving a nudge letter can be unsettling, but our team can guide you through the process. We:
The goal is to resolve the matter quickly and accurately, while minimising the risk of further action from HMRC.
A client of ours had been approached by HMRC who sent a ‘nudge letter’ advising they believe that the client may have received foreign gains that should be taxable in the UK.
Our client was not in receipt of any foreign income or gains for the year in question and HMRC seemed to suggest otherwise.
We assisted our client with responding to HMRC by acting on their behalf during the entire process. We worked with the client to obtain all the relevant details and identify where HMRC had received the incorrect information from. Documentation in relation to an offshore life insurance policy our client held contained an error and we assisted our client with obtaining the correct details from the provider to prove to HMRC that there was in fact no gain chargeable.
Our expertise and assistance meant our client was confident that they were obtaining the necessary support and HMRC responses were handled correctly and professionally. Once we were able to obtain the correct documents, HMRC were in agreement that there was in fact no chargeable gain and revoked their enquiry.
Do not ignore it. While not a formal enquiry, a nudge letter may require a response or disclosure. Get advice before taking action.
Not necessarily. HMRC may be working from incomplete or incorrect data. We can help you clarify your position and respond appropriately.
Yes. If ignored or poorly handled, a nudge letter may lead to a formal enquiry. Responding early with the right advice can prevent this.
We can guide you through the disclosure process to HMRC, helping to reduce potential penalties and demonstrating cooperation.
Nudge letters often come with a suggested timeframe. It’s best to respond promptly, even if you simply confirm that you are seeking professional advice.
