HMRC has recently issued letters to a number of agents that begin along the following lines:
“We’ve been checking your clients’ Self Assessment tax returns for the year ended 5 April 2025. We’ve found that in some cases, what they’ve declared doesn’t match either:
• P14 and P11D information provided by their employers
• Information we hold regarding their Child Benefit
We have also identified a number of returns containing provisional figures.
We’d like to call you in the next few weeks to discuss which clients’ returns we believe may require amendment. This is not a formal enquiry or compliance check.”
This is part of HMRC’s “One-to-Many” campaign, aimed at agents with at least 25 clients where HMRC believes there may be issues requiring attention.
Although HMRC has been running this initiative for a couple of years, professional bodies have raised a number of concerns, including:
- Combining multiple unrelated clients into a single schedule creates potential data protection risks.
- The affected clients are often managed by different teams within a practice, making a coordinated response more difficult.
- Many of the perceived discrepancies are not errors at all, but arise from legitimate situations that fall outside standard reporting assumptions, such as international assignments.
- Fee protection policies will not usually cover work undertaken in response to a generic letter sent to an agent, as it does not constitute a formal enquiry into an individual taxpayer.
The practical challenge is that responding to these letters can generate a significant amount of non-chargeable work for client teams.
If I received one of these letters, my approach would be as follows:
- Check Your Fee Protection Position
Before doing anything else, I would contact the fee protection insurer and ask:
- Whether they would fund the cost of the initial review.
- Whether they would cover the cost of providing HMRC with a preliminary response for each affected client.
- Whether they recognise that dealing with potential discrepancies at this stage may be considerably less expensive than handling 25 or more formal enquiries later.
- Confirmation that any formal enquiries subsequently opened by HMRC will be covered under the normal policy terms (even if voluntary disclosures are not).
I would not necessarily expect cover to be available at this stage, but it is always worth asking.
- Respond Promptly to HMRC
Once contacted by HMRC:
- Obtain the client list as early as possible.
- Carry out a high-level review of each case to identify any obvious concerns.
- Send a brief acknowledgement to HMRC confirming that:
- The list has been received.
- The cases will be reviewed.
- Any errors identified will be disclosed through the appropriate channels.
Provided the review is proportionate, this should not become an excessive exercise. In some respects, it can even serve as a useful additional quality control check on client files.
If HMRC subsequently decides to open a formal enquiry, the matter then moves into the standard enquiry process.
- Communicate Carefully with Clients
If a review confirms that a return is correct, I would not generally contact the client specifically to discuss the HMRC letter. Informing a client that HMRC has flagged their return, only to reassure them that nothing is wrong, may create unnecessary concern—particularly given the possibility of a lengthy delay before HMRC takes any further action, if indeed it does at all.
If the topic arises naturally during another conversation, I would mention that HMRC’s systems identified the return as unusual, that it has been reviewed, and that no issues were found. The key is to keep the matter in proportion. A proactive call solely to explain that there is nothing to worry about can often have the opposite effect.
4. Deal with Provisional Figures Quickly
Where provisional figures have been included in a return, efforts should be made to finalise them as soon as possible. If obtaining the final information is likely to take some time, it may be sensible to write to HMRC separately explaining the position and providing an anticipated timescale for completion.
5. Correct Any Genuine Errors
Where a genuine error is identified, I would disclose it directly to HMRC through the normal disclosure process. In doing so, I would make it clear that HMRC’s letter indicated that any corrections arising from this exercise would be treated as unprompted disclosures with no penalties.
After all, if HMRC has expressly stated that no penalties will apply, there should be no debate about the point. Keep a copy of the letter and refer to it if necessary.
Overall, the view is that these letters are best treated as a risk review exercise rather than an enquiry. Review the cases proportionately, disclose any genuine errors promptly, and avoid creating unnecessary concern for clients where no issue exists.