When you receive correspondence from HM Revenue & Customs (HMRC), responding promptly and effectively is essential, especially if you are a litigant in person (someone representing yourself without a solicitor or accountant). This guide, based exclusively on verified government sources, explains how to draft a legally sound and persuasive response to HMRC, whether you are facing a PAYE underpayment, a Self Assessment penalty, a VAT assessment, or a compliance check.

Why You Must Respond Promptly to HMRC

Ignoring HMRC letters can lead to:

• Increased penalties and surcharges

• Loss of your right to appeal

• Referral to debt collection or enforcement

• In rare cases, criminal investigation

Every letter from HMRC whether a compliance check, a P800 PAYE calculation, a Self Assessment penalty, or a VAT query demands a timely, structured, and precise reply.

Key Types of HMRC Correspondence and How to Respond

1. PAYE Disputes and Coding Notices

If you receive a notice about PAYE underpayment or an incorrect tax code:

1. Provide a clear chronology of your employment and income.

2. Include evidence such as payslips, P45/P60 forms, or redundancy letters.

3. Attach correspondence from employers about PAYE deductions.

4. Request a Statement of Account or a PAYE reconciliation from HMRC.

5. Use respectful, firm language to request a full review and recalculation if you believe the figures are incorrect.

If the underpayment is due to employer error, HMRC may recover the tax from the employer, not you, unless a formal direction is made.

2. Self Assessment Penalties

Common issues include late filing, estimated assessments, or failure to notify HMRC of chargeability. Respond by:

• Citing a reasonable excuse (e.g., illness, IT problems) and attaching supporting evidence.

• Requesting a suspension or reduction of penalties if appropriate.

• Appealing within 30 days of the penalty notice, either online or by post using the official forms (SA370/SA371).

A well-argued appeal, with evidence, can result in cancellation or reduction of penalties.

3. VAT Assessments and Surcharges

If you receive a VAT assessment or surcharge:

1. Check the accuracy of the assessment and ensure it relates to the correct VAT period.

2. Highlight mitigating circumstances (e.g., loss of access to accounting systems).

3. Request a time to pay arrangement if you need more time.

4. Appeal within 30 days if you disagree with the assessment.

Always confirm your business was registered for VAT at the relevant time and that the assessment is within statutory time limits.

4. Compliance Checks and Information Notices

If you receive a compliance check or a Schedule 36 FA 2008 information notice:

1. You are legally obliged to respond.

2. Query the scope of the request if it seems too broad.

3. Only provide relevant and legally required information—avoid over-disclosure.

4. Request a formal review of the information notice if necessary.
   

HMRC now offers an online Interactive Compliance Guidance tool to help you understand and respond to compliance checks.

Contact expert BAK Chambers — we will draft a letter for you to represent yourself.