You've had a letter from HMRC

Most HMRC letters are not an investigation: the common ones are a P800 tax calculation, a "nudge" letter prompting you to check a return, an automatic late-filing penalty, or a formal compliance check. Which one you have decides how urgent it is — and nearly all of them give you 30 days to reply.

Most of them are not an investigation. But almost all of them have a clock running, and the difference between a letter handled in week one and the same letter handled in month three is usually measured in thousands of pounds.

First: work out which letter you have

HMRC sends dozens of letter types and they look alike — same crest, same tone, wildly different consequences. A P800 and a compliance check both arrive in a brown envelope; one may be a refund, the other decides how many years of your records get examined.

Pick the one that resembles yours:

The ones people actually get

P800 or tax calculation

HMRC has recalculated a year of PAYE income and thinks you either overpaid or underpaid. These are routinely wrong when you had more than one job, changed employer mid-year, or have untaxed income alongside a salary — the calculation only knows what was reported to it.

Check the figures before claiming a refund or paying an underpayment. Where you also have untaxed income, a P800 sometimes triggers a broader look, so it is worth understanding the whole picture before you reply.

Simple Assessment (PA302)

A tax bill calculated without a return, common for pensioners and people with untaxed savings interest. The figures come from third-party data, and third-party data is frequently incomplete. If you disagree, tell HMRC in writing within 60 days.

Nudge letters — foreign income, rental income, crypto

The most misunderstood letter HMRC sends. It says, in effect: we hold information that does not appear to match your return, would you like to check? No enquiry has been opened. Nothing has been decided.

But it is not a mailshot. Foreign-income nudges come from automatic exchange of information between tax authorities; rental nudges from deposit schemes, councils and letting-agent data; crypto nudges from exchanges now reporting user data. They wrote to you because a dataset says something.

Two mistakes are common and both are expensive: ignoring it, and signing the enclosed certificate of tax position without first checking what your position actually is.

£100 late filing penalty

Automatic when a Self Assessment return misses 31 January, and charged charged even when you owe no tax. It grows: £10 a day once you are 3 months late (up to 90 days — £900), then 5% of the tax due or £300, whichever is greater at six months, then another 5% or £300 at twelve.

File first, appeal second. The penalty stops growing the moment the return lands, and an appeal made with the return still outstanding rarely succeeds.

Compliance check or enquiry

This one is formal: HMRC is reviewing a return or your records, and may ask for bank statements, invoices, or "an informal chat". The single most important thing here is scope — what they are entitled to see, and what they are not.

Do not send documents or explanations before the scope is clear. Once we are appointed, HMRC deals with us rather than telephoning you, which removes both the pressure and the risk of an unguarded answer becoming evidence.

Debt or payment demand

Left alone these escalate to collection agents, direct recovery from your bank account, or court. Almost nobody needs to get there: an instalment arrangement is usually available, and smaller Self Assessment debts can often be set up online in minutes. Arrange it before enforcement starts, not after.

The first 48 hours

1. Check it is genuine. Real letters quote your UTR or National Insurance number. No genuine letter asks for card details by reply, or for payment in vouchers or crypto.
2. Diary the deadline. It is usually 30 days from the date on the letter, not the date you opened it.
3. Do not reply immediately. Nothing good comes from a same-day answer written from memory. Establish the facts first.
4. Gather what the letter refers to — the year, the income source, the account. Not everything you own: the year and source it names.
5. Get it read by someone who has seen a hundred of them before you commit anything in writing.

If something really was missed

Sometimes the letter is right. Rent that was never declared, a foreign account nobody thought to mention, a few years of freelance income. This is far more common than people assume, and far more fixable than they fear.

HMRC runs disclosure routes precisely for this: the Let Property Campaign for undeclared rental income, the Worldwide Disclosure Facility for offshore income and gains, and the general digital disclosure service for everything else.

The mechanics matter less than the timing. Penalties are calculated partly on whether a disclosure was unprompted — made before HMRC came asking — or prompted. Coming forward first can reduce the penalty to a fraction of what the same disclosure costs after a letter arrives, and in some cases to nothing at all. That difference is why "wait and see whether they notice" is the most expensive strategy available.

What we do with it

• Identify the letter and the real risk — free, within 24 hours, from a photo.
• Establish your actual position before a word goes back to HMRC.
• Draft the response, appeal or disclosure, at a fixed fee agreed in writing before we start.
• Deal with HMRC as your agent, so the phone calls and the correspondence come to us.
• Fix the underlying cause, so the same letter does not arrive again next year.

We are not a refund firm and we do not take a percentage of anything. Fee agreed first, in writing, before any work starts.

Send the letter on WhatsApp →

Figures are for the tax year shown and change every April. They are general information, not advice — we check the current position for your circumstances before anything is filed.

Reviewed 19 October 2026.