18th January 2023 – Noel Mooney, associate director at leading audit, tax and consulting firm, RSM UK: ‘HMRC has announced two further nudge letter campaigns commencing in January 2023, aimed at individuals who may have generated income online which they have failed to declare. The first campaign relates to those generating income from creating content on digital platforms, while the second is focused on those who may have generated income from online marketplace sales.

‘Both campaigns require the recipients to either make a disclosure to HMRC or complete a certificate of tax position confirming there is nothing to report. The letters are based upon third party information held by HMRC. In terms of income sources, the online marketplace covers any website that handles and enables the sale of goods or services to a customer. HMRC has confirmed the digital content campaign is not confined to the UK and is being conducted jointly with other tax jurisdictions who are members of the Joint Chiefs of Global Tax Enforcement (the J5).

‘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 eg free gifts and use of assets.

‘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.’