Business people are being given advice on how best to deal with two new HMRC nudge letter campaigns.
The first relates to those generating income from creating content on digital platforms. The second is focused on those who may have generated income from online marketplace sales.
Both require recipients to make a disclosure to HMRC or complete a certificate of tax position, confirming there is nothing to report.
In some instances, the letters dropping through the letterbox could cause undue concern, particularly as they are based on third party information held by the HMRC and might not be accurate or up to date.
Noel Mooney Associate Director at audit, tax and consulting firm RSM UK, who have an office at Festival Park, Stoke-on-Trent, said: “When receiving such a letter, understandably, it may seem concerning but the key is to deal with it proactively and if in doubt, take the appropriate professional tax advice.
“In terms of best practice for dealing with such a letter, firstly, consider if HMRC’s information is accurate, it has been known to contact the wrong person particularly if it is a common surname.
“If you do have income from such sources, you will then need to consider a number of issues before deciding whether to approach HMRC directly or whether you need to speak to an adviser specialising in tax disclosures.
“These will include, how long you have been receiving the income, the level of income, whether it is from a UK or an overseas source, if payment was received in forms other than money e.g. free gifts and use of assets.”
Nudge letters can be effective tools but some critics have accused the HMRC of using a scattergun approach when sending them out.
Some sources believe the two latest campaigns are aimed at the growing number of people making money online but not realising they could be liable for tax or have underpaid – including social media influencers.
HMRC said sending out the letters was part of its “routine activity”.