Letters from HMRC about Tax Underpaid

Letters from HMRC about Tax Underpaid are normally sent initially as an enquiry or demand as an initial step when investigating conventional underpayments of tax liabilities and will depend upon whether returns have been filed or not, and whether there are suspicions of Tax Evasion, in which case there may additionally be a threat of prosecution.  In the event such letters are ignored, this 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.  Please click here for brief details of some of the personal risks a Director may face by operating a policy of non-payment of HMRC and/or not filing returns and ignoring correspondence. 

Alternatively, our webpage dedicated to claims that may be made against Directors personally can be reviewed here.

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.

Please call any member of our Tax Disputes team for your consultation now on 020 7841 0390.  Alternatively email us with your enquiry at info@franciswilksandjones.co.uk and we will call you back at a time convenient to you.