Have you received an automated letter from HMRC? Here's what to do

A recent HMRC blunder has resulted in many disgruntled taxpayers and accountants. Automated letters can cause stress for contractors when the information given in the letter is incorrect or alluding to a tax payment that is not due. Here we detail what these automated letters can say and how to handle receiving one.

There has been an increase in automated HMRC letters being sent to taxpayers following the end of the 2018/19 tax year. Letters were recently sent in error due to an automated system, which has caused confusion and stress for taxpayers.

What do the automated letters say?

Some of these errors include 2017/18 tax bills of less than £1 – less than the value of the paper it’s printed on. These ‘bills’ are simply auto-generated tax demands, according to ContractorUK, and HMRC has since made it clear that the taxpayer does not have to take action where tiny amounts are owed.

Accountants and advisers are having to deal with the repercussions of these letters, as many of them cause stress to taxpayers due to incorrect information.

In the case referred to by ContractorUK, many automated letters have incorrect details due to formatting problems – which can cause the taxpayer to blame the accountant for supposedly providing HMRC with incorrect information.

What to do when you receive an automated letter from HMRC

If you’re a client of Churchill Knight & Associates Ltd, you’ll receive free assistance with all HMRC correspondence as part of our Professional Package. This includes help with letters sent to you by HMRC.

If you have received an automated letter which you believe is incorrect – don’t panic. These happen frequently and can be resolved with a bit of investigating by your accountant. However, your accountant cannot necessarily control nor stop you from receiving these letters as they are due to errors in HMRC’s processes.

If you have any questions or concerns regarding HMRC correspondence, speak to your accountant.

Here are some topics that may be covered in an HMRC automated letter:

• Tax bills
• Debt collection
• Tax codes
• Incorrect taxpayer details
• Offshore income/gains

Be aware of scams and phishing attempts

Another issue regarding HMRC communication includes scams orchestrated by fraudsters portraying to be HMRC. There is published documentation to help you differentiate between genuine HMRC communication and phishing scams.

HMRC will rarely contact you by email, and will never send emails demanding tax payments. On the rare occasion, a taxpayer may receive an email from HMRC regarding Making Tax Digital, surveys and research, annual tax summaries, Brexit and Tax-Free Childcare for example.

HMRC will never send an email containing the following:

• Notifications of tax rebates
• Offers of repayment
• Asking to disclose personal information
• Provide a personal, non-HMRC email address for response
• Asking for financial information
• Attachments

If you receive an email from HMRC meeting any of the above criteria, this is most likely a scam and you should not respond or open any links contained in the email. You can report phishing scams to Action Fraud.

Be vigilant of scams in postal communications

In slightly less common instances, taxpayers can fall victim to fraudulent letters in the post alleging to be from HMRC. You can often spot these scams when the letter asks for you to ‘act now’; HMRC will usually provide a deadline or a number to call to discuss the payment being asked for.

Other factors to look out for include incorrect office addresses for HMRC, fake email accounts to contact, and requests for direct payment.

Keeping your information safe

A good contractor accountant can help safeguard you and your business from fake and inaccurate HMRC correspondence. Services such as providing a registered office address and assistance with HMRC communication can help intercept and mitigate fraudulent attempts on your behalf as well as deal with any HMRC letters/correspondence.

As experts in contractor accountancy for over 20 years, Churchill Knight is aware of various phishing scams concerning taxpayers and is well equipped to spot instances where HMRC correspondence is incorrect or fake.

Contact Churchill Knight for more information about what’s included in our accountancy services – or visit our website.

We can also help with HMRC contact where an umbrella company employee is concerned – visit our umbrella company website for more details.

* Calculator for illustration purposes only and uses assumptions. Limited figures based on 52 weeks, expenses £50 per week, £9,100 salary and accountancy fees included. As of 1st April 2023, there is no longer a single rate of Corporation Tax. The calculator uses assumptions and estimates and is designed to be accurate by individual circumstances will vary. Umbrella figures based on 52 weeks, £15 per week margin and holiday pay paid out. For a more accurate calculation tailored to your requirements, please contact Churchill Knight today by calling 01707 871 622 or contact us here.