The Times has reported that HMRC’s Wealthy Team has written to several hundred high-net-worth individuals in recent weeks, inviting them to a meeting to discuss not just their income but what they own: property, trusts, companies and other holdings. The letter comes with a “suggested agenda”, including a question about any tax advice obtained in the past year, and a gentle observation that talking now may avoid compliance checks later.

The commentary has focused, understandably, on privacy, on whether this signals an exit tax, and on whether HMRC will widen the net to the roughly 850,000 people it classes as wealthy. Those are important questions. But for anyone who has received one of these letters, there is a more immediate one: what happens in the room?

Before moving to private practice, I spent 22 years on the other side of the table, as a government lawyer with the Crown Prosecution Service, the Inland Revenue Solicitor’s Office and the Revenue & Customs Prosecutions Office. My view is simple. A friendly letter from HMRC is still a letter from HMRC, and an informal meeting is still evidence-gathering.

A request, not a requirement

As reported, these letters are invitations. They do not appear to be formal information notices under Schedule 36 to the Finance Act 2008, nor the opening of an enquiry into a return. That distinction matters. HMRC’s formal powers come with statutory limits: information must be reasonably required to check a tax position, and in most cases a taxpayer notice can be appealed. A voluntary meeting carries none of those safeguards. Whatever is volunteered, HMRC can keep and use.

That does not mean the right answer is to ignore the letter. Silence can itself prompt HMRC to move to a formal footing, and a considered, proportionate response is often the best way to keep a relationship with HMRC constructive. But the response should be a decision, taken with advice, not a reflex.

Why an informal meeting can carry real risk

From the inside, the value of these conversations to HMRC is obvious. Asset data is the missing piece. HMRC already receives a great deal: overseas account information under the Common Reporting Standard, the Trust Registration Service, the Register of Overseas Entities, Land Registry data, all of it cross-matched by its Connect system. What it often lacks is the taxpayer’s own account of how the pieces fit together. A meeting supplies it.

Most people who receive these letters will have nothing to worry about. But wealthy individuals tend to have complicated affairs: offshore structures set up decades ago, inherited trusts, family companies, property abroad, historic remittances. An inconsistent or loosely phrased answer about any of these can harden into a documented risk. In the more serious cases, material gathered informally may later sit in a file reviewed by the Fraud Investigation Service, where the choice between a civil route (such as Code of Practice 9) and a criminal investigation is made.

That is not scaremongering. It is how risk assessment works, and it is why I would never advise a client to walk into such a meeting unprepared.

The tax advice question

The agenda question about advice obtained in the last 12 months deserves particular care. Legal advice privilege protects communications with lawyers; following the Supreme Court’s decision in R (Prudential plc) v Special Commissioner of Income Tax [2013] UKSC 1 it does not extend to tax advice given by accountants or other non-legal advisers. A taxpayer asked about “advice obtained” may not appreciate which of their communications are protected, which are not, and what answering could open up. It is a question to be answered, if at all, with a lawyer alongside.

If you, or your client, have received a letter

▪ Do not ignore it, and do not reply off the cuff. Note the date and take advice promptly.

▪ Establish exactly what HMRC is asking for and on what basis. Is it voluntary or a statutory notice? The answer shapes everything that follows.

▪ Review your position before HMRC does. A confidential health check of structures, returns and historic positions identifies any issue while you still control how it is presented.

▪ If something needs correcting, correct it on your terms. A voluntary disclosure made before HMRC raises the point is treated very differently, in penalties and in reputational terms, from one extracted under questioning.

▪ If a meeting does go ahead, prepare for it, agree its scope in writing, and attend with your advisers. Keep a careful note of what is said.

▪ Mind privilege. Route sensitive analysis through lawyers where appropriate, and think before disclosing advice.

The bigger picture

HMRC has said it will publish a new strategy for wealthy taxpayers before the end of the year, and the Budget on 28 October may add to the pressure for receipts. Whether or not an exit tax follows, the direction of travel is clear: HMRC is building a picture of what the wealthy own, not just what they earn. Those who understand how HMRC uses that picture, and plan for it, will be best placed.

How I can help

I advise individuals, families, family offices and their professional advisers on HMRC interventions at every stage, from the first informal letter through Schedule 36 notices, COP9 and contractual disclosure, to criminal investigation and prosecution. I am ranked by Chambers & Partners in Tax: Contentious: Fraud and work closely with Child & Child’s private client, tax and regulatory teams, so clients receive joined-up advice from day one.

If you or a client has received one of these letters, or expect to, I would be glad to have an early, confidential conversation.

Tessa Lorimer | Consultant Barrister, Child & Child

TessaLorimer@childandchild.co.uk

This article is for general information only and does not constitute legal advice. Specific advice should be taken on individual circumstances.