HMRC New Scare Tactics Letter

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HMRCThe taxman has been accused of resorting to “bully boy” tactics after sending out letters which ask savers to explain why their “effective rate of tax” is lower than the national average.

HMRC says “We are issuing 1,000 letters to customers with an income of £150,000 or more who have an effective rate of tax of 22pc or less. If a customer is content that their return is accurate then they do not need to do anything.”

However, we have seen these letters to 2 of our clients of which neither fit HMRC description – a part time driving instructor and a care worker.

The HMRC letters say: “Looking at the figures in your self assessment tax calculation for the tax year ended, we can see that your effective tax rate is lower than average for people with a similar amount of income to you. This could mean that there is something wrong with your tax return.”

The letters also point out that “paying the right amount of tax is important as it helps pay for the public services that we all rely on”. Mr Down said this “scare tactic” will unsettle certain individuals.

An HMRC spokesman for the revenue said the letters are part of a trial to help individuals identify any mistakes they may have made on their self assessment return.

The spokesman denied that the letters are being send out widely, estimating that 1,000 letters have been sent out to date.

“We want to understand whether this approach will help individuals complete their self assessment returns correctly,” said the spokesman.

If you receive a letter like this please advise us as soon as possible. Dealing with HMRC tentative enquiries are always best done quickly and professionally by ourselves and if you have our TaxSafe cover it won’t cost you a penny in fees!