This month, HMRC will start a campaign targeting foreign companies holding UK properties. This follows HMRC saying that it has reviewed the public Land Registry records and other sources, to identify companies that it suspects are non-compliant with respect to their UK tax obligations.
HMRC will issue “nudge letters” to such companies. These letters are often sent en masse as part of sector-specific campaigns. Although they are sent in bulk, they should not be dismissed as simply mass marketing. If a letter is received, it means that HMRC have identified a particular feature of the recipient’s arrangements that suggests an underpayment of tax. Taking tax advice can help check that the company’s affairs are up to date. It can also help plan a strategic way forward, balancing cooperation with privacy.
The letters are likely to enclose a “Certificate of Tax Position”, with a 30-day deadline for response. It is important that these are not simply filled out and returned without taking advice. The Certificates are controversial, as they often include a declaration that the taxpayer is up-to-date and has filed on the correct basis with respect all UK taxes for all tax years. Such a declaration should not be given without checking with a tax adviser first. Indeed, HMRC have previously recognised that there is no obligation to return these declarations. Often, a more proportionate step will be to reply by letter, but each case will turn on its circumstances.
If you receive a letter to your company from HMRC, please contact Andrew McIntyre or discuss this with your usual Wedlake Bell adviser.