Publishing the details of deliberate defaulters

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 Serious Defaulters programme is a further deterrent. More information on the penalty regime can be found in the Penalty rates and structure for inaccuracies in returns guidance note and the Managing Serious Defaulters programme is discussed in the Managing serious defaulters guidance note.

When HMRC undertakes a criminal investigation and successfully prosecutes the individual or business entity concerned, it makes 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. From 1 April 2017, HMRC are also able to publish details of deliberate defaulters, where the relevant penalties relate to offshore matters.

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.

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

The questions are: