Letters from HMRC about underpaid tax can be quite frightening. Our team ae experts in taking the worry out of the situation and finding a solution. Call us today - we can help.

Letters from HMRC about tax underpaid are normally sent as the first part of an investigation into

  • potential underpayment of tax liabilities; and
  • where there are suspicions of tax evasion – in which case there may additionally be a threat of prosecution.

What do you do if you receive a letter?

Do not ignore these letters – if you do – it can lead to the imposition of substantial penalties and interest charges (in addition to any tax liability), going back to when the first arrears accrued.

  • HMRC will in most circumstances write to the tax payer and set out details of such suspicions and provide an opportunity for the necessary returns to be filed and arrears brought up to date (although this will no doubt include added penalties and interest charges).
  • HMRC will be receptive to representations being made and, in the event of substantial arrears but an otherwise profitable trading business (which may have suffered temporary problems) a time to pay agreement may be negotiated.

However, from experience the first thing you should not do, upon receiving any HMRC correspondence, is ignore it – HMRC (unlike other creditors) will not go away and they have received substantial funding from central government to pursue enforcement of tax liabilities.

Ultimately, if such correspondence is ignored then the next stage, for conventional tax arrears, will be an assessment of the liability (if returns are not submitted) followed by the presentation of a winding-up petition or a bankruptcy petition.

Although, for a company that has ceased trading or which is failing, a director may think of ignoring this, the outcome of such action will almost certainly affect you personally with claims by HMRC or claims by liquidators and administrators. It might even lead to you being disqualified as acting as a director.


At Francis Wilks & Jones we have considerable experience of negotiations with HMRC, including accelerated payment notices, personal liability notices, VAT security or any other claim – including appeals to tax tribunals or insolvency claims by liquidators and defending director disqualification claims.

Case studies

View all case studies

Contact us in confidence