HMRC letters explained

The most common HMRC letters

Most HMRC letters fall into a handful of categories. Knowing which is which tells you how urgent and serious it is.

"Notice to file a tax return" (SA316)

You're being asked to file a Self Assessment. If you don't think you should be filing, contact HMRC, but the safe option is usually to file (a nil return is fine if you owe nothing).

Tax calculation (SA302)

HMRC's calculation of the tax due on your Self Assessment return. It shows your income, allowances and how the amount was worked out. It does not include payments on account or other amounts you owe, so check it against your records, and use your Self Assessment statement to see what to pay.

Simple Assessment (PA302)

A tax bill for a past year where you did not pay enough tax through your tax code. Check the figures against your records. If you think they are wrong, call or write to HMRC within 60 days of the date on the bill; if they are right, pay by the deadline on the letter.

Penalty notice

You've been issued a penalty (late filing, late payment, inaccuracy, or another reason). The notice will say what for and how much. You have 30 days to appeal if you believe it shouldn't apply.

"We're checking your tax return" (compliance check)

HMRC is opening an enquiry into one or more of your returns. Treat this seriously. Get professional advice before responding. They'll usually ask for specific records or clarification on specific figures.

"We need to know more about your business" (information notice)

A Schedule 36 notice: HMRC is formally requesting information you must provide. There are penalties for not complying. Take this very seriously and consider getting representation.

Determination or assessment

HMRC has estimated what you owe because you didn't file or didn't provide enough information. The estimate often exceeds reality. You usually have 30 days to file a proper return to displace the determination.

"Discovery assessment"

HMRC has uncovered a past underpayment they think you owe. These can go back four years (an honest mistake despite reasonable care), six years (careless) or twenty years (deliberate). Get professional advice immediately.

What to do when one arrives

1. Read it carefully: note any deadlines
2. Don't ignore it: penalties escalate fast
3. Cross-check against your records
4. If you disagree, gather evidence and appeal in writing within 30 days
5. For complex letters (compliance checks, Schedule 36, discovery assessments), get an accountant involved straight away