If the taxpayer has income and/or gains to declare, they are asked to contact HMRC by calling the number given in the letter or by using HMRC’s online service. This should be done within 30 days of the date of the letter. HMRC will then provide a payment reference number (PRN). The taxpayer will have 90 days from receiving the PRN to declare their income and pay any tax owed. 

If the taxpayer believes that they do not have anything to declare, they are asked to call or email HMRC using the contact details provided in the letter. Again, this should be done within 30 days of the date of the letter. HMRC says that it will open a compliance check if the person fails to respond to the letter.

The letter explains that HMRC will treat any disclosure made following the receipt of the letter as prompted. This may increase the amount of any penalties charged. HMRC may also charge additional penalties where the person did not respond to its letter. Interest will be charged on any tax paid late. 

ICAEW’s Tax Faculty has published guidance on HMRC’s compliance interventions, including nudge letters and compliance checks. 

For guidance on calculating tax on property income and gains, see ICAEW’s property tax hub. 

Further information

Template letters:

• HMRC letter sent to taxpayers
• HMRC covering letter for agents