HMRC Nudge letters

The Annual Tax on Enveloped Dwellings (‘ATED’) is an annual tax charged on corporates that own a UK residential dwelling valued over £500,000.  HMRC send ‘Nudge’ letters to taxpayers where they feel there may be an error in their returns. The letters encourage taxpayers to check their returns and correct any mistakes before HMRC take any further action, for example open a formal enquiry.

Since October 2020 HMRC have been sending ‘Nudge’ letters to overseas corporates who appear to have purchased a UK dwelling/residential property worth more than £500,000 from 1 April 2020 and have not filed an ATED return.  HMRC are now issuing follow up letters to those who did not respond to their first round of letters. The letter states they must reply confirming if they need to submit an ATED return, and if not, provide a full explanation.

If you receive a nudge letter – we would recommend carefully reviewing your tax affairs to check compliance in relation to the information sought by HMRC and get some advice on how best to respond to HMRC to address any errors or complexities in your particular circumstances.

As well as ATED, in the past year HMRC have sent Nudge letters on a variety of areas including offshore income/capital gains and Benefit in Kinds.

If you have received a Nudge letter in relation to any aspect of your personal or corporate tax affairs and are concerned, please get in touch and one of our tax advisors would be happy to help. Contact us at –