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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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How to do a compliance check: Returned Letter Service (RLS) - action on receipt of an RLS correspondence

Where correspondence is returned to us, the address it was sent to can be referred to as:

  • a ‘Returned Letter Service’ (RLS) address, which is how it is shown on the majority of our IT systems, or
  • a ‘Dead Letter Office’ (DLO) address, which is how it is shown on the National Insurance and PAYE systems.

On this page we use ‘RLS’ to refer to both of these.

A notice or form may be returned RLS for different reasons. For example, the person may have genuinely forgotten to tell us that they have changed address, or they may have returned the letter marked ‘gone away’, hoping that we will abandon our compliance check.

A ‘notice or form’ includes letters, returns, enquiry notices, information notices, closure notices and decision notices, including assessments and determinations.

If your compliance check involves an RLS case, you will need to check what the correct address is. If you cannot find out the correct address, you should proceed anyway with your check, as long as you are satisfied that any notices are correctly served.

Checking the address

In all cases, before taking any further action you should try to contact the person by telephone to check whether their details are up to date and correctly recorded on our systems.

If you are not able to contact the person you will still need to proceed with your compliance check.

If you suspect the person is still at the address you may be able to confirm this by:

  • making an unannounced visit, see CH254000 
  • sending correspondence in a plain envelope by tracked Recorded Delivery, checking who has signed for the letter on the Royal Mail website
  • carrying out directed surveillance, see SIOG2250, when evasion is suspected and the case has been referred to the evasion referral team, see CH402150.

If these options are not appropriate, or all addresses are RLS and you are still not able to confirm the person’s address, the only way to proceed with your check is by issuing formal notices, when they can be legally served.

Making sure notices are legally served

In general, even if the person is no longer living or trading at an address from which a notice or form has been returned RLS, the notice or form will have been served if it is delivered to the person’s last address registered with HMRC. The precise rules that determine whether or not a notice has been legally served depend on whether or not the notice relates to direct tax, see below.

Direct tax and information notices for all taxes

Under S115 TMA 1970, any notice or other document to be served under the Taxes Acts is legally served on, or sent or delivered to, the person by HMRC if it is addressed to that person

  • at their usual or last known place of residence, or
  • at their place of business or employment, or
  • in the case of a company, at any other prescribed place, or
  • in the case of a liquidator of a company, at the liquidator’s address for the purposes of the liquidation or any other prescribed place.

This means that any notice that is sent or delivered to a person at any of the above addresses is legally served, irrespective of whether they receive it or not, see EM3853.

These rules also apply to all information notices, irrespective of the tax, issued under Schedule 36 FA08, see CH23440.

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VAT and other notices

A VAT notice may be legally served under S98 VATA 1994 by sending it by post in a letter addressed to the person or their VAT representative, at the last or usual residence or place of business of that person or representative. In practice, this is the trader’s registered address.

Where there is no tax specific legislation that determines under what circumstances a notice is legally served, the definition in Section 7 Interpretation Act 1978 will apply. This says that where an Act authorises or requires any document to be served by post then, the service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.

The courts assume that second class post takes 4 working days to be delivered and first class post takes 2 working days. Working days do not include Saturdays, Sundays or bank holidays.

This means that any document that is posted to a person is deemed to be effectively served at the time it is delivered if it is correctly addressed to the registered address, unless there is proof that it has not been delivered. The fact that a letter has been returned RLS is not in itself proof that the notice has not been delivered. The only notices that are considered not to be served are any that are returned clearly stating that the letter was not delivered, for example, if the letter box was sealed or the premises or postal address did not exist.

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DMB Tracing Unit

If a letter has been returned RLS and there are outstanding debts DMB will not be able to pursue these debts until they have confirmed the person’s correct address. You should, however, still serve a notice at the person’s last known address, provided we have met the appropriate legal requirements, irrespective of whether there are outstanding debts or not. In all VAT missing traders cases, DMB Tracing Group Cumbernauld will attempt to trace the person’s address, seeDMBM875510+.