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A gentle nudge
Key points
- A nudge letter will encourage taxpayers to disclose anything that might have been left off their tax returns.
- Nudge letters are usually sent in response to information HMRC has received (through the CRS for offshore assets).
- Due to the serious consequences of making an incorrect declaration taxpayers should carefully consider whether they should sign and return the certificate of tax position.
- Disclosures following from a nudge letter are considered as prompted and the taxpayer will not qualify for full mitigation from penalties.
As most practitioners with clients holding offshore assets will know there is a wide variety of tools and strategies at HMRC’s disposal to pursue whatever tax it believes is owed. These range from informal inquiries all the way to strict liability criminal offences and knowing how each works can be essential.
A relatively new tool in HMRC’s box is the nudge letter a...
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