HMRC – Nudge Letters to ‘Persons with Significant Control’ (PSCs)

By Ann Coleman

Trust and Estate Tax Accountant

If you are a director of a limited company or someone who earns more than £100,000 per annum, you or your agent may have received some correspondence (‘nudge letter’) from HMRC.  We can help!

Towards the end of October 2022, HMRC started to send out nudge letters to people who were considered ‘Persons with Significant Control’ in companies. They were able to obtain these details from the Confirmation Statements at Companies House and compare these to people who have submitted self-assessment tax returns to HMRC for the year to 5 April 2021.

HMRC have been reviewing and comparing the list of PSCs from the Confirmation Statement information stored at Companies House and they have compared this to people who have submitted tax returns and who, (a) have either not submitted a tax return at all, or (b) have not declared more than £100,000 per annum in earnings.

There may be circumstances where people are directors of companies, for instance managing blocks of flats or, in certain circumstances, charities which are limited companies for which they are not remunerated, and it is generally considered that there is no need to register for self-assessment as the companies for which they act as directors are non-profit making.

These nudge letters give one the opportunity to remedy one’s tax affairs if there is a need to do this. 

A ‘Person of Significant Control’ is defined as falling into one or more of the following categories:

  • Someone who owns more than 25% of the share capital in a company
  • Someone who owns more than 25% of the voting power in a company
  • Someone who has the right to appoint or remove the majority of the directors
  • Someone who can exercise significant influence over a company

If you would like advice on ‘nudge letters’ or to see whether you need to prepare personal tax returns, please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.