High earners warned of HMRC self assessment checks

High earning individuals are warned that HM Revenue and Customs is sending out letters asking taxpayers to double-check whether they have put down the correct information on their self-assessment return.

HMRC has recently begun a process of sending out letters asking some savers to explain why their “effective rate of tax” is lower than the national average.

In the letters, HMRC says: “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 say that “paying the right amount of tax is important as it helps pay for the public services that we all rely on.

HMRC say that the letters are part of a trial to help individuals identify any mistakes they may have made on their self assessment return.

Many individuals are being contacted because HMRC has adopted a computerised system which tells them to send out the letters, rather than inspectors simply checking tax returns.

Our message to individuals who have received this letter is firstly don’t panic.  It is likely that you have done nothing wrong and have already explained your circumstances on your self-assessment return.

We would urge anyone who thinks they may have made genuine mistakes on their self-assessment form to contact their accountant for advice.

For more information please contact Nigel Martin.