Date posted: 2nd Nov 2020
As we reported a few months ago, HM Revenue & Customs (HMRC) are starting to “nudge” taxpayers and ask whether the taxpayer has fully declared their income or capital gains.
We understand that in addition to recent letters regarding offshore income and gains, HMRC are now asking taxpayers (and agents) to check whether tax returns include:
- Benefits in kind declared by employers.
- Investment income, including rental income.
- Details of deferred consideration where a business has been sold.
- Disposals of second properties.
- Dividends from companies in which they are registered as a person of significant control.
HMRC do have access to a significant amount of information via their “super” computer – CONNECT – which is able to access a wide range of data such as land registry data, PAYE and P11D submissions. However, whilst HMRC can access intelligence based information, that a) does not mean that your tax return is incorrect and b) the information that HMRC hold is incorrect. We have defended cases where HMRC have mixed up our client with another taxpayer with a similar name and where another client genuinely owned a second holiday home that was not rented.
If you receive a letter from HMRC regarding undeclared income or gains, then please give us a call or contact the tax team here.
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