Commentary

A6.652 Managing serious defaulters (MSD)

Administration and compliance

A6.652 Managing serious defaulters (MSD)

A6.652 Managing serious defaulters (MSD)

Managing Serious Defaulters is an enhanced monitoring programme for certain individuals and businesses who have been found to have deliberately evaded the tax system and who HMRC therefore considers are 'high risk'. It looks closely at a defaulter's tax affairs to ensure that they are complying with all their tax obligations and tackles ongoing risk through early compliance activity. HMRC's aim is to deter people from defaulting in the future and to reassure honest taxpayers that serious defaulters will be penalised and their tax affairs closely supervised.

Initially termed Managing Deliberate Defaulters (MDD), the programme was launched in February 20111 and extended and renamed Managing Serious Defaulters (MSD) with effect from 1 April 20132. MSD applies equally to businesses, large and small, and to individuals. HMRC says that the original programme was extended because it found that some high risk cases were being excluded because the original criteria were tightly defined. HMRC has commented, however, that it considers that monitoring has proved effective in 'making tax cheats comply with their obligations'.

Defaulters fulfilling certain criteria (see below) are notified in writing when they are entered on to the programme and told what

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