Opening a brown envelope from HMRC is unsettling, and it is normal to assume the worst. Most HMRC letters are routine, and almost every situation is easier to resolve when you respond calmly and on time.
Don't panic and don't ignore it. Find the reply-by date, work out which kind of letter it is (the heading and any reference to a 'Code of Practice' or 'factsheet' tell you most of what you need), and don't send HMRC anything until you understand what they are asking for.
HMRC send millions of letters every year. Many are automated and are generated when information from banks, online platforms, letting agents, employers or overseas tax authorities doesn't obviously match what was declared. A letter usually means HMRC have a question. It doesn't mean they have reached a conclusion. The tone is often formal and the wording can sound severe. That is house style, not a sign that you are in serious trouble.
Check the heading, the first paragraph and any enclosed factsheet. The common types are: Nudge or 'one to many' letter: a general prompt to check your affairs, often about rental income, overseas income, crypto or online selling. There is usually no named case, and it often asks you to sign a certificate of tax position. Compliance check letter: a named officer opens a check into a return or a specific issue and encloses a CC/FS factsheet. This is the most common formal enquiry. Code of Practice 8 (COP8): a specialist investigation where HMRC suspect a significant loss of tax but do not suspect fraud, often involving complex or avoidance arrangements. Code of Practice 9 (COP9): HMRC suspect tax fraud and offer the Contractual Disclosure Facility. This is serious, but it is designed as a civil route that keeps most people out of the criminal process. Penalty notice, assessment or discovery assessment: HMRC have made a decision. There is normally a 30-day window to appeal. Information notice (Schedule 36): a formal demand for documents, with its own rights of appeal.
Whatever the letter says, the reply-by date is the one thing you must not miss. Missing it can lead to penalties, a formal information notice, or a decision being made without your side of the story. If you need more time, ask for it in writing before the deadline. HMRC often agree to a short extension when the request is reasonable. Where the letter is a decision, such as an assessment or a penalty, the 30-day appeal window is a statutory time limit. Talking to HMRC about the matter does not stop that clock.
Don't ignore it. Silence is the most expensive response. Don't sign a certificate or declaration you are unsure about. Signing a statement that later proves wrong can turn a careless error into something HMRC treat as deliberate. Don't guess figures or send partial records to make the letter go away. Don't move money, close accounts or destroy records. It looks far worse than the original issue.
Plenty of routine letters (a simple nudge letter, a small missed income source, a straightforward compliance question) can be handled by the taxpayer, especially with good structure and templates. Our Co-Pilot is built for exactly that, and you can refer your case to a specialist at any stage. Anything mentioning COP9, fraud, a large sum, offshore structures or a criminal investigation should be reviewed by a specialist before you reply. The first response sets the tone for the whole case.
Not necessarily. Many letters are automated prompts or simple requests for information. Only some are formal enquiries, and even those are usually resolved civilly.
You can, but it is usually better to reply in writing so there is a clear record. Understand the letter first. Anything you say on the phone may be noted and relied on.
Reply as soon as possible, explain briefly why you are late and ask for time to provide a full response. Acting quickly limits the damage. If it was a decision letter, a late appeal may still be possible if you have a reasonable excuse.
Genuine HMRC letters quote your reference and give an office name and address. Be wary of texts, emails or calls demanding immediate payment or bank details. Check the contact details independently on GOV.UK.