HMRC ‘Nudge’ Letter

This is a letter concerning any overseas income, assets and gains which are connected to a UK taxpayer and come attached with a certificate of tax position. This so called ‘nudge letter’ is to be taken seriously and mustn’t be neglected.

The letter is intended to provide the taxpayer with an opportunity to disclose any information gaps which may exist regarding data held by HMRC concerning any foreign assets held by the individual. This letter doesn’t insinuate there are any anomalies or incorrect submissions in previous tax returns but is instead an invitation from HMRC to consider to assess your tax position cautiously.

The letter offers 3 choices to confirm the absence of any tax liability: any income or gains on foreign assets have been declared in one’s tax return, the individual has availability of reliefs and personal taxes to cover his tax position or one isn’t liable to pay any tax.

If the tax position is incorrect, the letter permits the individual to state this and make a disclosure via HMRC’s Worldwide Disclosure Facility (WDF). Whilst there isn’t any requirement to submit the form but should any dishonest information be submitted, the individual could be liable to criminal prosecution. Thus one must carefully scrutinize the semantics and wording of the form prior to submission to ensure there aren’t any misstatements in the form.