HMRC Policy to “Name and Shame” Deliberate Tax Defaulters (Including Individuals)
November 19 2013
As part of the government’s crackdown on tax evasion, the names and details of deliberate tax defaulters are now being published by HM Revenue and Customs (“HMRC”). The purpose of this is to act as a deterrent to those who have received penalties for either making deliberate errors in their tax returns or deliberately failing to comply with their tax obligations. HMRC may publish this information under Section 94 Finance Act 2009, which came into force on 1 April 2010. Although these powers were granted in 2010, HMRC are only now beginning to use them in earnest.
Section 94 Finance Act 2009
Under section 94(1) of the Finance Act 2009, HMRC may publish information about any person if a) in consequence of an investigation conducted by the Commissioners, one or more relevant tax penalties is found to have been incurred by the individual, and b) the potential lost revenue in relation to the penalty (or the aggregate of the potential lost revenue in relation to each of the penalties) exceeds £25,000.
A relevant tax penalty includes a deliberate inaccuracy in a tax return or document for a tax period beginning on or after 1 April 2010, a failure to comply with certain obligations (such as the obligation to notify HMRC of a VAT liability) or excise wrongdoing that occurred on or after 1 April 2010.
What Information Can Be Published?
Under section 94(1) of the Finance Act 2009 information published by HMRC may contain the following:
- the person’s name (including any trading name)
- the person’s address (or registered office)
- the nature of any business carried on by the person
- the amount of the penalty or penalties and the potential lost revenue in relation to the penalty (or the aggregate of the potential lost revenue in relation to each of the penalties)
- the periods or times to which the inaccuracy, failure or action giving rise to the penalty (or any of the penalties) relates
- any such other information as the Commissioners consider it appropriate to publish in order to make clear the person’s identity.
HMRC’s Crackdown on Tax Evasion: “Name and Shame” Campaign
Whilst the notion of publishing personal information about the small minority who try to evade their tax responsibilities may act as a deterrence, there is a real danger that the scheme “names and shames” individuals and businesses.
However, Jennie Granger, HMRC’s Director General for Enforcement and Compliance has stated:
“Publishing taxpayers’ names is not something we do lightly. Publishing their names lets the community know we are tackling this and encourages others to get back on track.”
Section 94 (6) Finance Act 2009: Safeguards for Individuals
Under section 94 (6) of the Finance Act 2009, individuals can prevent HMRC from publishing this personal information. Before publishing any information, HMRC must inform the person that they are considering doing so, and provide that person with a reasonable opportunity to make representations about whether such information should be published.
Details are published only once all appeal routes are exhausted and details must be published within 12 months of the tax penalty becoming final. HMRC are under a legal obligation to ensure that the information is not published for longer than 12 months.
The current list of deliberate tax defaulters can be found on the HMRC webpage.
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