Save content
Have you found this content useful? Use the button above to save it to your profile.
An illustration showing a net capturing a pound sign.

HMRC chases missing tax returns


Around 220 wealthy taxpayers have received a nudge letter from HMRC requesting submission of tax returns which have not been logged as received.

1st Jul 2022
Save content
Have you found this content useful? Use the button above to save it to your profile.

When HMRC hasn’t received a self-assessment tax return it has requested, the normal procedure is to issue a £100 fixed late filing penalty, plus £10 per day penalties, and tax related penalties at a minimum of £300 at six months’ delay and again at 12 months. These penalties can amount to £1,600 for a single return which is over a year late, and much more if there is a significant amount of tax outstanding.

Where the taxpayer disagrees with the penalty they can appeal against it, and that appeal can be challenged at the first tier tribunal.      

Pay up or submit

If the taxpayer simply pays the late filing penalties, HMRC has fewer leavers to pull to encourage the taxpayer to submit the missing tax return. However, without sight of the missing tax return, HMRC has no clear idea of the amount of tax at stake, and thus how much tax-related penalty to charge.     

HMRC’s Wealthy External Forum is now trying a different approach. It is sending nudge letters to 217 wealthy taxpayers, who have been issued with notices to submit a tax return for tax years 2018/19 to 2020/21 but who have not submitted all of those returns.

For most of those taxpayers only one of the tax returns has gone awol, but 30 of the group has failed to submit two returns from those years. 

What the taxpayer must do

The letter advises the individual to file the missing tax returns or contact the HMRC helpline on 03000 123 456 to explain why they believe a return is not needed. The authorised tax agent should get a copy of the letter.

Register for free to continue reading

It’s 100% free and provides unlimited access to the latest accounting news, advice and insight every day. As well as access to this exclusive article, you can:

Content lock down, tick icon

View all AccountingWEB content

Content lock down, tick icon

Comment on articles

Content lock down, tick icon

Watch our digital shows and more

Access content now

Already have an account?

Replies (10)

Please login or register to join the discussion.

By Paul Crowley
01st Jul 2022 14:18

The numbers really are tiny so this is clearly aimed.
HMRC really ought to be setting determinations at outrageous levels to push compliance.

Thanks (5)
Replying to Paul Crowley:
By richard thomas
01st Jul 2022 16:11

I quite agree. It’s outrageous that determinations haven’t been issue. They were supposed to replace the previous practice of issuing increasingly punitive eastimated assessments.

Thanks (4)
By Hugo Fair
01st Jul 2022 18:12

It's not very clear which taxpayers and/or agents fall within the remit of HMRC’s Wealthy External Forum ... which isn't an operational team (it's a talking shop between some of HMRC's HNW teams and some reps from the PBs).

HMRC’s definition of a wealthy taxpayer is one with an income of at least £200,000 per annum and/or assets of over £2 million - and HMRC say there are c. 700,000 such individuals. BUT you could be in this group with no income other than SP if your house is worth > £2m - and there's a LOT of those in London - so something doesn't stack up here.

Why does this matter (apart from being another example of HMRC making cavalier use of data to paint a misleading story)?
1. The PR is that they are 'serious' about tackling the wealthiest (not just their usual targets of the SME variety) ... but 217 taxpayers out of 700,000 (and probably more) is not exactly a dramatic intervention;
2. As both Paul and Richard have already commented, why just 'nudge' letters? Why so shy of moving to formal Determinations (and leaving the letters so late that Determinations could run out of shelf-life if they're not careful)?
3. Could it be that the unspoken part of this is that they've concentrated on the overseas aspects? "HMRC’s Wealthy External Forum team members are responsible for developing and implementing HMRC's strategy for tax on offshore income and assets".

In short, is there any evidence of anything more than hot air being blown into the shop window?

Thanks (5)
By ireallyshouldknowthisbut
01st Jul 2022 18:54

Sheesh, what's wrong with billy big boots knocking on the mansion door and embarrassing the owner in front of the maid.

18/19 return still o/s with no determinations!

Its pathetic.

Thanks (4)
By mhkay
04th Jul 2022 09:48

Individual circumstances are going to be highly variable. We're currently dealing with the estate of someone whose financial affairs were a total mess: she had inherited a large amount of money 40 years ago, which was wisely invested, but she could hardly read or write and left most of her post unopened. She had no idea how to use a computer or the internet.

Thanks (0)
By snickersinatwix
04th Jul 2022 09:48

Hmm, what about people like our ex self employed plumber client who disappeared off the radar just after we filed 2017 (and was approaching the VAT threshold). I don't believe he has filed anything since but is still to be seen driving around our area in his van............. Not mega rich, but still a lot of tax unpaid.

Thanks (2)
04th Jul 2022 11:15

So how do we know this? Who spilled the beans? Is no one in officialdom embarrassed? Clearly one rule for the rich and untouchable and another for the rest of us sheeple.

Thanks (1)
By Tom 7000
04th Jul 2022 12:18

if you were the atx inspector, where do you throw the dice on the determination. too high and it will likely be thrown out by a judge, too low and you lose out

is 10x last years income enough or 100x

what if they owe 200m cgt and you only assessed 50k

i guess theres rules to follow on that side of the fence

Thanks (0)
By Willaja
04th Jul 2022 12:46

How are HMRC going about pulling leavers and should they not be reported for inappropriate behaviour?

Thanks (0)
By Sue Murby
05th Jul 2022 15:29

Before the days of self assessment estimated assessments were issued. If the estimated profits were lower that the actual the tax payer would pay the amount HMRC calculated. When that happened they would invariably raise a further assessment with a much higher estimate which was invariably higher than the actual figures. I don't see why they can't do this now.

Thanks (0)