HM Revenue & Customs (HMRC) has recently issued One to Many (OTM) letters to private equity businesses and estate agents.
These letters can be sent to any business and usually highlight HMRC’s focus on compliance, urging you to review your practices.
What are One to Many letters?
OTM letters are not threatening and do not target one specific business.
They are sent to multiple businesses simultaneously regarding a specific topic, urging recipients to review their compliance and act where necessary.
These letters typically outline what HMRC expects, the steps to rectify potential issues, and the consequences of non-compliance.
While OTM letters are not formal investigations, they should not be ignored.
They are an opportunity for you to identify and address potential compliance issues before HMRC takes further action.
Failing to respond adequately could lead to penalties, inquiries, or, in serious cases, criminal investigations.
How should you respond to an HMRC One to Many letter?
If you receive one of these letters, here are some key steps to follow:
- Remain calm – The letter often serves as a precautionary prompt for action
- Read carefully and understand the content of the letter
- Review your business’s records and procedures
If the letter highlights a potential issue, act promptly to correct it.
This may involve updating your procedures, registering for relevant schemes, or making a voluntary disclosure to HMRC.
Ignoring an OTM letter can lead to investigations, penalties, or legal action.
Even if you have not received an OTM letter, it is a good idea to regularly review your compliance with tax and regulatory obligations.
Need support with HMRC correspondence?
If you have received an OTM letter or need help reviewing your compliance, our team of experts is here to assist.
Received a OTM letter? Speak with us today for advice on how to deal with it.
