You have 30 days to appeal — in writing, with evidence. Miss that deadline and HMRC's version of your tax bill becomes legally binding. Here's exactly what to do the moment the letter arrives.

The HMRC Notice of Assessment: What to Do When HMRC Disagrees With Your Numbers

HMRC Disputes · 2026

The HMRC Notice of Assessment: What to Do When HMRC Disagrees With Your Numbers

You have 30 days to appeal. Miss that deadline and HMRC's version of your tax bill becomes legally binding — regardless of whether they are right. Here's what the letter means, why most subcontractors make it worse by ignoring it, and exactly what to do.

📅 May 2026 · ⏱ 5 min read · 🏗 CIS Subcontractors

A Notice of Assessment is not an invitation to negotiate. It is HMRC's formal statement that they believe you owe more tax than you declared — and a legal clock starts from the moment it is dated. The most common response is to put the letter in a drawer and hope it goes away. It does not. The problem grows, the penalty increases, and the window to fight it closes.

30 Days from the date on the letter to submit a formal written appeal

30% Penalty added to unpaid tax for deliberate or careless non-response

£2,400+ Final bill faced by a carpenter who ignored a £760 tax query

What a Notice of Assessment Actually Means

HMRC issues a Notice of Assessment when their records suggest your Self Assessment return is incorrect. This is not a routine communication — it means someone at HMRC has specifically reviewed your return and reached a different conclusion from the one you submitted.

The notice sets out HMRC's version of your tax liability. It replaces your own Self Assessment figures for the relevant year unless you formally challenge it within the deadline. Once the appeal window closes without a response, HMRC's figures stand — and the debt, plus any penalties and interest that have accrued, becomes immediately collectible.

Silence is not neutrality. When you receive a Notice of Assessment and do nothing, you are legally accepting HMRC's calculation — whether it is right or wrong.

CIS Tax Insights, 2026

Why HMRC Issues a Notice of Assessment

For CIS subcontractors specifically, these notices most commonly arise from four situations — all of which are avoidable with better record-keeping.

⚠

Income Mismatch Your declared CIS income does not match the figures your contractors reported on their monthly CIS returns. HMRC's automated system flags any discrepancy — even small ones — for review.

⚠

Unusually High Expense Claims Your expense-to-income ratio sits outside the norm for your trade. HMRC benchmarks claims by sector — a mileage claim or tool cost that appears disproportionate triggers automated scrutiny.

⚠

Missing or Incomplete Information HMRC expected to see something on your return — CIS deductions, a capital allowances claim, VAT figures — and it was absent. Missing data is treated as a potential error rather than a legitimate omission.

⚠

Late or Amended Returns Filing late, amending a return, or making a significant change to a previously filed return can all trigger closer scrutiny. Any unusual change in your declared figures relative to prior years invites review.

The 30-Day Rule: Your Most Important Deadline

⏱ The Hard Deadline

You Have 30 Days From the Date on the Letter — Not the Date You Open It

The clock starts from the date printed on the Notice — not the day it arrives, and not the day you read it. If the letter sat on your doormat for a week before you opened it, you have already used seven of your thirty days. A phone call to HMRC does not count as an appeal. You must respond in writing, with evidence, within that window. Late appeals can sometimes be accepted in exceptional circumstances — but this is not guaranteed and should not be relied upon.

⚠ You can request payment postponement

While an appeal is in progress, you can formally request that HMRC postpone collection of the disputed amount. This means you do not have to pay the additional tax while the appeal is being considered. The request must be made in writing alongside or shortly after your appeal. Without this request, HMRC can pursue collection even while the dispute is unresolved.

The Real Cost of Ignoring the Letter

📐 Real-World Example Carpenter — £3,800 in Disallowed Expenses — Two Very Different Outcomes

Original expense claims (tools + mileage)	£6,000
Amount HMRC disallowed (insufficient evidence)	−£3,800
Additional tax on disallowed expenses (20%)	£760
If he ignored the Notice
30% penalty on unpaid tax	+£228
Interest on overdue tax (HMRC rate)	+£190
Debt collection costs (estimate)	+£420
Total bill — ignored Notice	£2,400+
If he appealed with evidence
Mileage logs and tool receipts submitted — appeal successful	£0 owed

what to do

Exactly What to Do When the Letter Arrives

Open It and Note the Date — Today The most damaging thing you can do is leave the envelope unopened. The date on the letter determines your deadline, regardless of when you read it. Open it immediately, write the appeal deadline (issue date + 30 days) in your calendar, and treat it as a fixed, non-negotiable deadline. Do this today

Compare HMRC's Figures Against Your Records Pull your CIS Payment and Deduction Statements, bank statements, and the Self Assessment return you filed. Line up the numbers. Where does HMRC's version differ from yours? Which specific claims have they disallowed or adjusted? Understanding exactly where the disagreement lies is essential before you can build a response.

Gather Every Piece of Supporting Evidence For each item HMRC has queried or disallowed, locate the evidence: receipts, mileage logs, tool purchase invoices, contractor correspondence, bank statements matching payments. If the evidence no longer exists — lost receipts, missing statements — consider whether alternative evidence (bank records, supplier statements, digital photos of tools) could substitute. Quality of evidence determines the outcome

Submit a Formal Written Appeal Write to HMRC clearly stating: your full name and UTR, the date and reference number on the Notice, which specific figures you dispute and why, and what the correct figures should be. Attach copies of all supporting evidence. Keep a copy of everything you send. Send it by recorded post or submit through your Government Gateway account with a timestamp.

Request Postponement of the Disputed Amount Include in your appeal letter — or in a separate letter sent at the same time — a formal request to postpone payment of the disputed amount while the appeal is considered. This prevents HMRC pursuing collection while your case is unresolved. It does not cancel the debt — it pauses it pending the outcome of your appeal.

What Your Appeal Letter Must Include

✉ Your Appeal Letter — Required Elements

Include Every One of These — Missing Items Weaken Your Case

Your full legal name and UTR number

The date and reference number from the Notice

The tax year the Notice relates to

A clear statement that you are appealing

Specific figures you dispute (not just "everything")

Your explanation of why each figure is wrong

What the correct figure should be and why

Copies of all supporting evidence attached

Request for postponement of disputed payment

Your signature and the date

Should You Appeal or Accept?

✓ Appeal — if any apply

Fight the Assessment

You have receipts, mileage logs, or bank records that support your original claim
Your income figures are correct and CIS statements prove it
HMRC has applied the wrong tax rate or misunderstood the nature of an expense
The disputed amount is significant — even a partial success is worth the effort
You have an accountant who can handle the correspondence

→ Accept and pay — if this is you

Resolve It Quickly

You made a genuine error and HMRC's figures are correct
The receipts no longer exist and the claim cannot be evidenced
The disputed amount is small and the cost of fighting exceeds the saving
Paying promptly stops interest accumulating and may reduce penalties
You want to avoid escalation to a full enquiry

The Worst Thing You Can Do Is Nothing

A Notice of Assessment is not the end. Most are successfully challenged when the subcontractor responds promptly with proper evidence. HMRC issues these notices in volume — many are triggered by automated systems flagging statistical anomalies, not by a deliberate decision that you have done something wrong.

The subcontractors who end up with £2,400 bills from £760 queries are not the ones who had the weakest cases. They are the ones who did not open the letter in time. They are the ones who called HMRC on the phone instead of responding in writing. They are the ones who assumed it would sort itself out.

If a Notice is sitting somewhere in your paperwork right now — open it. Check the date. Calculate the deadline. Then call your accountant or start gathering your evidence. The window is closing from the moment the letter was printed.

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Clean Records Are Your Best Defence.

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This article is for informational purposes only and does not constitute professional tax or legal advice. If you have received a Notice of Assessment, consult a qualified accountant or tax adviser immediately. Deadlines and procedures are based on 2026 HMRC guidance.