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We Have Information Suggesting You May Have Received Untaxed Income” – What This HMRC Letter Means

  • Writer: Daniel Cattrall
    Daniel Cattrall
  • Jul 16
  • 3 min read

If you’ve received a letter from HMRC stating: “We have information suggesting you may have received untaxed income,” you’re likely feeling anxious or confused — and you’re not alone. This is one of HMRC’s most common opening letters in cases where it believes there may be income that hasn’t been declared.


At Tax Dispute Experts, we regularly help individuals who’ve received this letter. Whether you’ve made a genuine mistake or believe HMRC has misunderstood, we can guide you through your options and help protect your position.


What Is This Letter About?

This is a “nudge” letter — part of HMRC’s campaign to encourage people to come forward if they’ve failed to declare income in previous tax years.


It means HMRC has received information — usually from third-party sources — suggesting you may have underreported or omitted some of your income. This could relate to:


  • Property letting (including Airbnb)

  • Overseas income or interest

  • Earnings from self-employment or side work

  • Bank interest not included in your tax return

  • Digital income (Etsy, eBay, YouTube, crypto, etc.)

  • Investment gains

  • Freelance or consulting work


In many cases, HMRC doesn’t initially accuse you of wrongdoing — it’s giving you a chance to disclose before it opens a formal enquiry.


Where Does HMRC Get This Information?

This type of letter is typically triggered by:


  • Land Registry (e.g. you own property but haven’t declared rental income)

  • Bank interest reports from UK or overseas institutions

  • Letting platforms like Airbnb or Booking.com

  • Digital platform income reported under the new OECD gig economy reporting rules

  • Overseas tax authorities, under the Common Reporting Standard (CRS)

  • Crypto exchanges sharing user data


HMRC’s algorithms and data-matching tools flag inconsistencies — especially when income or assets show up in other databases but not on your tax return.


What Should You Do if You Receive This Letter?

First, don’t panic. And importantly — don’t ignore it. HMRC will assume silence means there’s something to hide, and could escalate the matter.


Here’s what you should do:


Review your recent tax returns.

Check if there’s any income — however small — that you may have missed or misunderstood.


Gather your documents.

Look at bank statements, rental records, crypto transactions, online sales, and overseas accounts.


Don’t respond hastily.

It’s essential to understand what HMRC might already know before replying — this avoids under-disclosure or inconsistent explanations.


Speak to a tax specialist.

The safest and most effective route is often to make a voluntary disclosure, either through HMRC’s Let Property Campaign, the Digital Disclosure Service, or another tailored route — and this should be done correctly the first time.


What If You’ve Done Nothing Wrong?

Mistakes do happen. Sometimes, the income in question was declared under a different category, or it wasn’t taxable in the first place.


However, you still need to engage with HMRC and explain your position, ideally with supporting documentation. Ignoring the letter or giving a vague reply can make things worse.


What Are the Risks of Not Responding or Responding Incorrectly?

If you don’t respond, or give an incomplete response, HMRC may:


  • Open a formal investigation

  • Issue discovery assessments going back up to 20 years

  • Apply penalties of up to 100% (or more for offshore issues)

  • Consider criminal prosecution in deliberate cases


Early, accurate engagement protects your position and often results in lower penalties.


How Tax Dispute Experts Can Help

We’ve helped hundreds of clients respond to HMRC’s untaxed income letters — quickly, discreetly, and effectively.


We offer:


  • A full review of your tax position

  • Guidance on whether a disclosure is necessary

  • Strategic advice on the best route to disclose (Let Property Campaign, Digital Disclosure Service, Contractual Disclosure Facility, etc.)

  • Drafting of your HMRC response

  • Negotiation with HMRC on your behalf

  • Penalty reduction based on cooperation and quality of disclosure


Whether you need to correct an oversight or defend your tax return, we can help you do it right the first time — and avoid turning a letter into an investigation.


Received This Letter? Take Action Today

HMRC’s data is getting better every year — and letters like this are only the beginning. If you’ve received one, don’t leave it to chance.




 
 
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