HMRC is again sending letters to wealthy individuals inviting them (and their advisors) to a pre-tax return filing chat.
Whilst this initiative was first introduced in 2022, HMRC has started the next round of letters.
HMRC defines individuals with income over £200,000 and assets over £2,000,000 as wealthy and is encouraging those individuals to engage with a compliance officer from HMRC’s wealthy team. The ‘chats’ are entirely voluntary and HMRC has confirmed that there will be no adverse treatment for declining to take part in the chat.
HMRC say the initiative is designed to reduce errors that may be made in the tax return, by discussing things such as complex tax issues, changes in circumstances and one-off transactions prior to the filing of the tax return. Although the initiative may be well-intentioned, if taxpayers engage directly with HMRC they could risk making an inaccurate or unnecessary disclosure to HMRC, including the possibility of starting an unwanted tax enquiry.
Professional accountancy bodies have published warnings about taking part in such ‘chats’ and have advised that if individuals wish to take part, their professional advisor should conduct a pre-chat discussion with HMRC to identify the topics to be covered, clarify who will attend and what the expectations for follow up steps will be, on both sides. They also recommend that professional advisors should also join the actual ‘chat’.
If you have received a letter from HMRC and would like to discuss this, please feel free to get in touch with our private client tax team.
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