HMRC warning over letters landing on doormats containing 'wrong information'
HMRC is sending taxpayers "nudge letters" with the WRONG information, they are warning. A taxpayer wrote into the Telegraph newspaper to explain their predicament after being issued a nudge letter by the Labour Party government's taxman.
They said: "The recent hot topic is “nudge” letters from HMRC, including those based on information received by the tax office under “Common Reporting for Overseas Income”. This information that HMRC gets is often misleading, incorrect – and HMRC remains clueless. It leads to a lot of unnecessary correspondence. Please could you cover this in an article."
The Telegraph's Mike Warburton explained the current HMRC campaigns include profits from dealing in cryptocurrencies, income from rental properties, transactions on platforms such as eBay and any other information obtained from your online activity.
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But the author was concerned with the Common Reporting Standard (CRS), an agreement involving over 100 countries around the world, whereby they exchange financial information as part of the battle against offshore tax evasion.
Mr Warburton explained: "Offshore bank accounts are sometimes viewed as suspect. However, over the years I have had many clients with offshore bank accounts for entirely commercial reasons." He said: "The issue is not whether you have an offshore account, but that you declare the relevant income to HMRC. I can fully understand why HMRC have issued nudge letters to those people they discover through the CRS procedure of holding offshore accounts of which they were previously unaware.
He explained: "I understand that last year more than 5,000 taxpayers made voluntary disclosures to HMRC about untaxed offshore income, to the ultimate benefit of all other taxpayers. My concern, nevertheless, is the quality of the information supplied to HMRC and how it is then used."
If you receive a letter from HMRC accompanied by a Certificates of Tax Position form, then take care and use guidance from the Chartered Institute of Taxation (CIOT) which states you should not complete these certificates without professional guidance and advice.