What Is HMRC Targeting in 2026? Nudge Letters Explained

HMRC's tax checks in 2026 matter to landlords, online sellers, cryptoasset holders and small business owners. Information reported by third parties can help HMRC identify differences between what it knows and what appears on a tax return. A letter asking you to review those differences deserves attention, but it is not a reason to panic.

There is no single official list of everyone HMRC is targeting in 2026. This guide separates relevant reporting changes and compliance risks from claims about specific campaigns. It also explains how to respond to an HMRC nudge letter if one arrives.

What is an HMRC nudge letter?

A nudge letter is a prompt to check a particular part of your tax position. It may concern income, gains or a claim for relief, and may be informed by information HMRC has received from another organisation.

Receiving a letter does not itself prove you owe tax. Nor does every nudge letter mean a formal HMRC investigation has started. The wording of your own letter matters: check which tax years and issues it covers, what action it requests and whether it includes a deadline.

Do not ignore it, but do not rush to admit an error or sign a declaration before checking your records either.

HMRC compliance in 2026: areas worth reviewing

1. Cryptoassets: gains, income and better reporting

Selling cryptoassets is not the only transaction that can matter for tax. For individuals holding them as investments, exchanging one token for another or spending tokens can normally be a disposal for Capital Gains Tax purposes. Some receipts, including certain staking rewards, can have Income Tax consequences. Airdrops need their own circumstances checked.

Keep transaction histories across all wallets and exchanges, together with sterling values and relevant fees. A lack of cash withdrawn to your bank does not necessarily mean there is nothing to report.

Under the Cryptoasset Reporting Framework, covered UK service providers must collect reportable user and transaction information from 1 January 2026. Their first reports are due in 2027, covering 2026 activity. This is an important reporting change, not evidence that every crypto user has been sent a letter or owes tax.

Read HMRC's guidance on selling cryptoassets before assuming a transaction is outside the rules.

2. Landlords, property investors and holiday lets

Check that rental income agrees with tenancy records, letting-agent statements, booking-platform statements and your bank receipts. Review allowable expenses and how jointly owned income has been allocated.

Holiday letting does not make income automatically tax free. Moving a property into a company can also create tax and legal costs, so do not treat incorporation as a simple paperwork exercise.

If you discover undeclared residential rental income, HMRC's Let Property Campaign may provide a disclosure route for eligible individual landlords. Check its scope and deadlines before using it.

Our landlord accounting service and Cornish holiday-let tax guide explain the practical record-keeping issues, including Making Tax Digital.

3. Online sellers and side hustles

Digital platform reporting rules have applied since 1 January 2024. Where the rules apply, operators may need to collect and report information about certain sellers. That does not mean HMRC receives every transaction from every website, and it does not create a new tax on clearing out your wardrobe.

Selling unwanted personal belongings is normally different from trading. Buying or making goods to sell for profit is a different question. Valuable personal items can also have Capital Gains Tax implications even when you are not trading.

The trading allowance may be relevant, but platform reporting thresholds and tax allowances are not interchangeable. Keep records of sales, costs and what you were actually doing. Read HMRC's digital platform seller guidance and our sole trader support page if your side hustle is becoming a business.

4. High earners, directors and missing income

Check dividends, share disposals, untaxed income and any tax that PAYE has not settled. Directors should reconcile personal income with payroll records and dividend paperwork rather than assuming company filings cover their personal tax affairs.

There is no general £200,000 rule that tells you whether you must register for Self Assessment in 2026. Filing obligations depend on your circumstances and the relevant tax year. Being a director alone does not settle the question either. Use HMRC's Self Assessment checker and deal with any notice to file you have received.

5. Construction, employment status and umbrella companies

Construction businesses should check employment status, CIS treatment and labour supply arrangements. Calling someone self-employed, or paying them under CIS, does not by itself determine their correct employment tax status.

Separate PAYE rules apply to relevant labour supply chains involving umbrella companies for worker payments on or after 6 April 2026. The agency contracting with the end client is responsible for ensuring PAYE is operated correctly, or the end client where there is no agency. HMRC can recover underpaid PAYE from the responsible party.

These rules do not automatically make every participant in every supply chain liable. Review your actual contracts and arrangements against HMRC's umbrella-company PAYE guidance.

6. Research and development tax relief

An R&D claim needs to meet the relevant scheme's conditions and be supported by evidence of qualifying work and costs. A company's industry label or SIC code does not, on its own, prove that a claim qualifies or fails.

Review the technical explanation, expenditure and filing requirements with a suitably experienced adviser. Do not assume routine product improvements or ordinary business projects qualify. The official R&D relief guidance is a useful starting point.

7. VAT registration and associated companies

The VAT registration threshold is £90,000 of taxable turnover, not profit. You normally need to register if taxable turnover for the previous rolling 12 months exceeds it, or if you expect to exceed it in the next 30 days alone. Do not wait for your accounting year end to check.

For Corporation Tax, associated companies can reduce the profit limits used for the small profits rate and marginal relief. Common ownership or control needs careful consideration, alongside the detailed exceptions. The number of companies and the length of the accounting period can affect the calculation.

Read HMRC's VAT thresholds and Corporation Tax marginal relief guidance. Our limited company accounting packages cover accounts and tax support for owner-managed businesses.

8. Offshore income and foreign assets

UK tax residents may need to report overseas interest, rental income or gains, subject to their circumstances and any applicable reliefs. International information sharing makes it important to reconcile overseas records with UK returns.

The remittance basis ended on 6 April 2025. Do not rely on old non-domicile guidance for current income. Transitional rules can still matter for foreign income and gains arising before that date, while eligible new residents may need advice on the replacement foreign income and gains regime.

Cross-border tax is an area for tailored advice, not assumptions based on where a bank account is held.

9. Employers and National Minimum Wage

Uniform deductions, salary sacrifice, unpaid working time and apprentice pay can create minimum-wage problems even when the headline hourly rate looks right. Check the pay that counts and the hours that must be included, rather than just the figure on a contract.

Use the official employer minimum-wage guidance. Our payroll service can help you discuss your payroll needs.

10. Tax avoidance schemes and adviser claims

Be cautious about arrangements promising unusually high take-home pay, guaranteed tax savings or tax results that seem too good to be true. An adviser selling a scheme does not make it approved by HMRC. Obtain independent advice before relying on a claim that an arrangement cannot be challenged.

How to respond to an HMRC nudge letter

1. Check it is genuine. Verify unexpected contact through official GOV.UK channels rather than using an unverified payment link or telephone number.
2. Read the scope. Identify the income, relief, tax years and people or businesses mentioned.
3. Note the deadline. Use the date in your own letter, not a general assumption that every letter allows 30 days.
4. Gather evidence. Pull together tax returns, bank records, invoices, platform statements, dividend documents or crypto histories relevant to the question.
5. Review before replying. Ask your accountant to compare the letter with your records. Do not guess missing figures or sign something you have not checked.
6. Choose the correct next step. Depending on the facts, this could be explaining why the return is correct, amending it or making a disclosure through an appropriate route.
7. Keep a copy. Save the letter, supporting evidence and your response. If more time is needed, contact HMRC before the deadline and check whether an extension is agreed.

Can voluntary disclosure reduce HMRC penalties?

HMRC says penalties will usually be lower if you disclose before it contacts you. The outcome depends on the tax involved, the behaviour behind the error, when you disclose and how fully you cooperate. There is no blanket promise that disclosure removes a penalty, and tax and interest may still be payable.

An unprompted disclosure and a response after HMRC has contacted you can be treated differently. Ask an adviser which route fits your circumstances and read HMRC's disclosure guidance before submitting figures.

Key takeaways

• An HMRC nudge letter is a prompt to review your position, not automatic proof of wrongdoing.
• Crypto reporting, online selling, rental income, VAT and payroll are worth checking against current guidance.
• Reporting by a third party does not itself establish a tax liability.
• Use the deadline in your own letter and check the facts before replying.
• Early disclosure can improve the penalty position, but the result is not guaranteed.

Need help with an HMRC letter in Cornwall?

If a letter has arrived, or you think something may be missing from a return, start with a calm review of your records. Our family-run team in Helston can discuss your bookkeeping, tax returns and the support you need, including whether specialist advice is appropriate.

Get in touch with Kernow Accountancy to talk through your next step. You can also explore our accountancy services before your chat.

Sources and further reading

• HMRC: selling goods or services on a digital platform.
• HMRC: reporting cryptoasset user and transaction data.
• HMRC: Let Property Campaign disclosure guide.
• HMRC: remittance of pre-6 April 2025 foreign income and gains.
• HMRC: your guide to making a disclosure.

General guidance only, not personal tax or legal advice. Updated on 24 October 2026. Your reporting obligations and the right response to HMRC depend on your circumstances and the wording of any letter you receive. Check current official guidance and speak to your adviser before acting.