More than 90% of British citizens pay their taxes and the small minority who deliberately don't are taking money that would be spent on vital public services. HMRC deals seriously with such cases, using civil or criminal powers to penalise or prosecute evaders. From April 2010, in addition to recovering the tax due, interest and a penalty up to 100% of the tax lost, new legislation comes into force allowing HMRC to publish the details of people or companies caught deliberately evading more than £25,000. Previously, HMRC could not publish details of the evaders in civil cases, only in criminal cases. Parliament decided to set the threshold at £25,000 to ensure that only the most serious cases of tax evasion will result in publication.
That legislation is at Section 94 of Finance Act 2009 (Opens new window) and it enables HMRC to publish the names and details of individuals and companies who are penalised for deliberate tax defaults. These defaults are incorrect returns, failures to notify and certain VAT and Excise duty wrongdoings. Section 94 does not apply to late filing or late payment penalties.
The legislation was brought into effect by Treasury Order on 3 March 2010. It applies to return periods starting on or after 1 April 2010 and failures or wrongdoings occurring on or after 1 April 2010. No details of deliberate defaults committed prior to the legislation becoming effective will be published.
For more information please visit the links below:
Information for Tax Professionals
For HMRC to consider publication of a person's name and details the following conditions must apply:
However, even where the above criteria are met HMRC will not publish details where individuals make a full disclosure to HMRC, either unprompted or immediately when challenged and cooperate fully throughout the course of our enquiries, thereby receiving the maximum penalty reduction available. Our guidance on receiving the maximum reduction for the quality of disclosure is in the Compliance Handbook CH95000+
Publication will follow a strict set of rules:
HMRC will publish the details necessary to uniquely identify the person and the extent of their evasion. This may include the person's name, address, nature of business, period covered by the evasion, amount of evaded tax and the penalty for that evasion. HMRC plans to publish a list quarterly on the HMRC website with an accompanying press notice.
HMRC will publish if the criteria are met unless there are exceptional circumstances. Any representations made by the taxpayer will be taken into account in reaching this decision. Examples might include prejudice to an ongoing criminal investigation or risk to a person's security. HMRC are unlikely to decide not to publish because of a possible impact on the person's reputation, business interests or creditworthiness.
The decision to publish will be made by a senior HMRC officer.
HMRC will ensure that where evasion has taken place the person responsible is given every opportunity to avoid having their name and details published. To receive the maximum penalty reduction your client, whether unprompted or challenged should do all they can to:
In this regard you may find it useful to
HMRC tackles evasion by checking and challenging where it deems necessary information you provide in your Returns and documents. HMRC has a wide range of powers to allow us to do this. Where Returns and documents are found to be incorrect we will recover the additional tax due and charge you interest. We will also charge you a penalty.
In addition, legislation is now in force which will allow HMRC to publish your name and details where the following conditions apply: -
We call these the publication conditions.
We can only apply the publication conditions to your errors which occur on or after 1 April 2010. However, we will still recover any additional tax due prior to this date. We will also charge you interest and penalties on tax due prior to this date.
Even if you have made deliberate errors which meet the publication conditions you can still avoid having your details published. You must however:
You will also benefit if you do so by reducing the amount of the penalties we charge you.
If you have deliberately understated the amount of tax you owe how should you put things right?
There is more detail in the section Information for Tax Professionals.
If you are represented, in the first instance you may want to approach your representative for guidance. Your representative will be able to:
If you are not represented and you choose to deal with matters yourself we will do all we can to help.
If we have already started our enquiries please contact your case officer who will be able to answer your questions.
If we have not yet started our enquiries and you wish to make a disclosure please contact your local compliance office via this link.
HM Revenue & Customs: Tax office locator
In any case, even where the publication conditions are met, remember you can avoid having your details published by fully disclosing the detail and extent of your errors and helping us bring our enquiries to a swift and satisfactory conclusion.
