Thousands of private hire drivers working for app-based platforms like Uber and Bolt are currently receiving letters from HM Revenue & Customs (HMRC). If you've received one, it's essential you understand what it means and what to do next.
The letter typically contains worrying phrases, stating that HMRC has intelligence showing you’ve ‘earned money from driving customers who booked using online applications’.
It goes on to state: “We also have information that shows that you have not told us about some or all of this income. This means you may owe tax.”
This is not a random scam or a phishing attempt; it is a targeted campaign based on data HMRC has acquired.
Crucially, if you have received this letter, do not ignore it. Ignoring it will not make the problem go away. It could result in HMRC making an assessment based on the (potentially inflated) information they have, which will likely be followed by significant penalties and interest charges on top of the tax owed.
Where Does HMRC Get Its Data From?
You might be wondering how HMRC knows about your driving income. In short, their data-gathering capabilities are vast and growing more sophisticated every year.
HMRC is receiving data directly from the platforms you work for, including:
- Uber
- Bolt
- Deliveroo
- Amazon (for delivery drivers)
- And other gig economy apps
This is part of HMRC's wider strategy to connect all available data sources. They use a powerful, multi-billion-pound data-matching system called 'Connect'. This system cross-references information from many different places to build a detailed financial profile of taxpayers.
Sources feeding into the 'Connect' system include:
- Third-party platforms: Like Uber and Bolt, who are now required to share information on their drivers' earnings.
- Bank Accounts: HMRC can and does access bank account information to look for patterns of payments that don't match a declared tax return.
- Social Media: They even look at social media accounts where you might be advertising your driving or delivery services.
- Other Government Departments: Information from the DVLA, local licensing authorities, and DWP can all be used.
HMRC's strategy is clear: to link all these digital footprints together. This letter is proof that their system is working.
What to Do Now? (If You Have Undeclared Income)
If you have received this letter and you do have undeclared income (even if it was an honest mistake), HMRC expects you to make a full disclosure. This means proactively telling them about the income you haven't paid tax on.
This is where we can help. Navigating an HMRC disclosure can be complex and stressful, but getting it right is critical.
The Cost of Getting It Wrong
Trying to handle this yourself or, worse, continuing to ignore it can be costly. HMRC has a range of penalties it can apply, which are a percentage of the tax owed. If they believe you deliberately withheld information, these penalties can be severe. You will also be charged interest on any tax paid late.
By ignoring the letter, you lose the opportunity to control the situation. HMRC will simply issue a tax bill (an 'assessment') based on their own figures, and the burden of proof will be on you to prove it's wrong—all while penalties and interest mount up.
How We Can Help With Your Disclosure
Our team of tax experts handles HMRC disclosures regularly. We can manage the entire process for you, ensuring it's done correctly and efficiently.
Our process involves:
- Full Review: We confidentially review your HMRC letter, your bank statements, and your platform earnings to understand the full picture.
- Calculate the Tax: We accurately calculate the exact amount of income, expenses, and tax owed for the relevant years.
- Manage HMRC: We act as your agent, meaning all correspondence from HMRC comes to us. You don't have to speak to them directly.
- Submit the Disclosure: We prepare and submit a formal, professional disclosure to HMRC on your behalf, presenting your case in the best possible light.
- Minimise Penalties: By making a full, prompted disclosure (even after a 'nudge letter'), we can often negotiate the lowest possible penalties, saving you a significant amount of money.
What If You Did Not Have Income to Declare?
Of course, HMRC can get information incorrect. Their data-matching is powerful, but not infallible.
If you are absolutely certain that you did not receive any undeclared income from driving or any other platform work during the period they are asking about, you should not ignore the letter.
In this case, you can contact HMRC using the email address or phone number provided on the letter and inform them of the situation.
A crucial word of warning: Before you take this step, you must check your records thoroughly. Go back through your bank accounts and any app profiles. If you mistakenly tell HMRC you have no income to declare, and they later find evidence that you did, this could be seen as deliberately misleading and may result in more severe consequences.
Don't Face HMRC Alone - Get Expert Advice
Receiving a letter from HMRC is stressful, but there is a clear path forward. Whether you need to make a full disclosure or believe the letter was sent in error, getting professional advice is your safest bet.
If you would like to discuss a disclosure in detail or have received one of these letters and are unsure what to do, our team is here to help.
Book a free, no-obligation consultation with us today to discuss your situation in complete confidence.
