Publishing the details of deliberate defaulters

Produced by Tolley in association with Guy Smith of inTAX Ltd
Publishing the details of deliberate defaulters

The following Owner-Managed Businesses guidance note Produced 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
  • Introduction
  • What are the five questions?
  • Who considers the answers to the five questions?
  • What details can HMRC publish?
  • When can HMRC publish the details?
  • How long can HMRC keep the details published?
  • A worked example
  • 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) thatdeliberately 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 thatit is serious about tackling non-compliance.

The penalty regime for inaccuracies in returns 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 Penalties for inaccuracies in returns ― overview 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 current list of deliberate defaulters can be found on the HMRC website.

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.

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

  2. does the relevant penalty relate to a PDDD period? The relevant penalty relates to a PDDD period if the penalty is for a deliberate inaccuracy in a return or other document for a tax period beginning on or after

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