HMRC appear to be sending ‘one to many’ (OTM) letters for a growing number of reasons, including employment income, foreign tax and crypto assets.
What are OTM letters?
HMRC will often send one standard letter to many taxpayers, essentially on a ‘one-to-many’ basis. These letters are a way in which HMRC gives taxpayers an opportunity to review their UK tax returns and ensure all aspects of their return is correct and complete.
What could you get a letter for?
There appears to be a growing list of reasons you may receive an OTM letter, these include, but are not limited to:
- Letters to those HMRC believe are claiming tax relief incorrectly from investments, such as interest or dividends, from a foreign country
- Letters concerning errors in the declaration of residential property disposals for capital gains tax (CGT)
- Letters to those who HMRC believe have held crypto assets and are liable to pay CGT
- Omitted capital gains in relation to residential property which was not the taxpayer’s main home
- Letters to taxpayers whose 2019/20 self-assessment tax returns do not appear to include all the employment income and benefits in kind included in their P60 and P11D forms
What should you do if you receive a letter?
There is usually a 30-day deadline given from HMRC. Either the taxpayer has nothing further to report, or they will need to follow the instruction in the letter on how to correct any errors.
HMRC will follow up if a response is required but not received, so not replying at all will attract more attention and possibly more penalties.
Get in touch
If you have received a letter from HMRC and are seeking assistance in how to respond, contact our tax team on 01788 539000 or 0116 261 0061.
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