Answers · UK 2025/26

What triggers an HMRC nudge letter, and what should I do if I get one?

HMRC nudge letters are sent when data it holds — from banks, overseas tax authorities, online marketplaces, letting agents, or the Land Registry — suggests your declared income or gains might be incomplete, without necessarily meaning HMRC has concluded you did anything wrong. They invite you to voluntarily review and correct your tax position, often via a specific disclosure facility, before HMRC considers opening a formal investigation.

Last updated: 4 July 2026Last reviewed: 4 July 2026How we verify

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HMRC has increasingly sophisticated data-matching capabilities, drawing on information from UK banks and building societies, overseas tax authorities (through international automatic exchange of information agreements, such as the Common Reporting Standard), online marketplaces and platforms (including Etsy, eBay, Airbnb and similar, following expanded digital platform reporting rules), letting agents, and the Land Registry, cross-referenced automatically against the income and gains taxpayers have actually declared on their Self Assessment returns. A nudge letter is sent when this data-matching process flags a discrepancy or a category of income that HMRC's records suggest you might have, but which does not appear to have been fully declared — for example, evidence of rental income from a property, overseas bank interest, cryptoasset disposals, or online marketplace trading income. Receiving a nudge letter does not mean HMRC has concluded you have definitely underpaid tax, or that a formal investigation has been opened — it is a lower-key, less formal prompt inviting you to review your own tax position and correct anything you find is missing, often by directing you towards a specific disclosure facility (such as the Worldwide Disclosure Facility for offshore matters, the Let Property Campaign for undeclared rental income, or a general voluntary disclosure route) designed to make it straightforward to correct the record and typically resulting in lower penalties than if HMRC discovers the same issue through a formal investigation instead. Ignoring a nudge letter is generally a poor strategy: because HMRC would not have sent it without some underlying data suggesting a discrepancy exists, an unanswered nudge letter significantly increases the likelihood of HMRC opening a formal, more intrusive compliance check or investigation later, at which point penalties for the same underlying error are typically substantially higher (potentially up to 100% of the tax due for deliberate and concealed behaviour, compared with a much lower penalty, or sometimes no penalty at all for a genuinely careless error voluntarily and promptly corrected). Anyone receiving a nudge letter who is unsure whether they have anything to correct should review their full income position carefully, ideally with an accountant's help, and respond within the timeframe given, even if only to confirm their existing return is already accurate.