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1040 Abroad

HMRC Sending ‘Nudge’ Letters to Overseas Citizens in the UK

According to US/UK tax firm Blick Rothenberg, the letters are part of efforts to establish if overseas citizens are resident in the UK for tax purposes

Published on November 19, 2020


If you're an overseas citizen living and working in the UK, you may receive a letter from HMRC, according to accountancy and tax firm Blick Rothenberg, who have an expertise in US/UK tax.

Paul Haywood-Schiefer, a Manager at the firm, explained that "It appears that HMRC are now targeting individuals with letters asking them to check their residency position before they complete their Tax Returns for the tax year ended 5 April 2020. This means that they are going to need to look carefully at the Government’s Statutory Residence Tax (the test that the Government uses to define whether a person is resident in the UK for tax purposes or not) to see exactly what their tax residency status is."

Haywood-Schiefer added that "This is not the first nudge letter’ campaign we have seen. There were previous campaigns regarding Swiss investments and then more recently, offshore income and tax gains in general."

He goes on to explain that sending letters regarding residency is primarily about increasing the "tax take", and that this recent round of letters "comes as the Government looks at ways of clawing back billions spent during the current pandemic ... The reasons are always the same, trying to flush out people who might not have been completing their returns on the correct basis, and alerting them that they urgently need to look into their affairs."

Mr Haywood-Schiefer advises that if you receive a letter from HMRC asking you to clarify your residency status, you "should not ignore it" and should consider your "position in light of the SRT (Statutory Residence Test)". He adds that if you're unsure, you should "should seek professional advice", explaining that "It is much more unpleasant in the long run" if you get it wrong "and face penalties and interest" which could have been put right.

If you need assistance relating to US/UK tax, check out the Tax section of The American's A-List Directory.




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