This HMRC scheme is targeting two specific groups of taxpayers; those who have received payments from online platforms and those who have earned income through digital content creation.
"The letters state that HMRC has facts on hand to suggest that the recipient has not declared all income on their relevant tax return!"
If the recipient confirms that they intend to go ahead with the digital disclosure, HMRC will send them a response. They then have up to 90 days from the date of the letter to sort out and pay any extra tax due through the digital disclosure system.
HMRC will accept confirmation in the following formats:
A Certificate of Tax Position Reply, containing the relevant box ticked and the certificate signed by the taxpayer.
A letter from the taxpayer or an authorised representative declaring whether or not there is any need to disclose, as well as the reasons why.
Confirmation through the phone from the taxpayer or an authorised representative to state whether or not there is a need to disclose, and the reasons why.
A copy of the letter concerning online marketplace sales can be found here. The other letter is the same except that it pertains to digital content creators.
As with all things concerning HMRC, it's best not to react to a nudge letter from them immediately and seek the advice of an accountant like me before responding. They may say they have a lot of information about your income-generating activities, but equally, they could just be fishing like they've done with other nudge letter campaigns.
Always seek professional advice before responding.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you or you've received a nudge letter from HMRC, it may be a great idea to call me on 01908 774320 and let's see how I can help you.
Don't forget to stay updated with our daily social media posts on Facebook.
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
No unauthorised use, duplication, distribution or modification to any original content contained within this blog is permitted without prior written permission of the author. All other trademarks and registered names are acknowledged.