Publishing the Details of Deliberate Defaulters (PDDD)

By Tolley in association with Guy Smith of inTAX Ltd
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The following Corporation Tax guidance note by Tolley in association with Guy Smith of inTAX Ltd provides comprehensive and up to date tax information covering:

  • Publishing the Details of Deliberate Defaulters (PDDD)
  • Introduction
  • What are the five questions?
  • Who considers the answers to the 5 questions?
  • What details can HMRC publish?
  • When can HMRC publish the details?
  • How long can HMRC keep the details published?
  • What steps can be taken to avoid publication?
  • Practical considerations for the agent

Introduction

A more aggressive stance is being adopted by HMRC towards those individuals and businesses (sole traders, partnerships and companies) that deliberately get their direct or indirect tax wrong. This is driven by HMRC’s desire to deter people from evading tax and to show the compliant taxpaying majority that it is serious about tackling non-compliance.

The new penalty regime heavily penalises the worst ‘deliberate defaulters’, as HMRC calls them, through higher tax geared penalties, and entry into the Managing Deliberate Defaulters programme is a further deterrent. The Managing Deliberate Defaulters programme is discussed in the Managing Deliberate Defaulters (MDD) guidance note.

When HMRC undertakes a criminal investigation and successfully prosecutes, the individual or business entity concerned has their details published as a matter of record.

HMRC also has the power to publish the details of deliberate defaulters where the potential lost revenue (PLR) exceeds £25,000. The legislation at FA 2004, s 94 allows HMRC to publish the details of those deliberate defaulters who incur a civil penalty for deliberate, or deliberate and concealed, behaviour. The first list  of deliberate defaulters was published on 21 February 2013.

FA 2009, s 94

Before any details are released, HMRC considers what it calls the five publication questions.

What are the five questions?

The answer to all of these questions has to be ‘yes’ for HMRC to fulfil the requirements laid down by FA 2009, s 94.

CH190620

The questions are:

  • 1)Has a relevant penalty been charged? A relevant penalty is a penalty levied for deliberate or deliberate and concealed behaviour, in respect of a direct or indirect tax. (FA 2007 Sch 24 Paras 1, 1A; FA 2008 Sch 41 Paras 1-4) (CH190644)

More on HMRC programmes for deliberate defaulters: