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HMRC starts to ‘name and shame’ tax avoiders

February 25, 2013

In a move that has been criticised by some, HMRC have decided to ‘name and shame’ people who have received penalties for making deliberate tax return errors, where the total penalties total more than £25,000.

As part of the tax authorities’ efforts to clamp down on tax evasion (and more importantly, to be seen to do so), HMRC has published a list of taxpayers who have been investigated for deliberate defaulting on their tax obligations, and failing to fully disclose their activities when questioned.

The initial list (PDF), published as part of this new initiative, will be updated each quarter with the names of individuals and businesses who are deemed to be ‘tax cheats’.

To qualify for a mention on HMRC’s new list, and be labelled as a ‘deliberate defaulter’, the person in question must be liable for a tax penalty, have been responsible for evading at least £25,000 of tax, and have failed to make a full disclosure to HMRC when first investigated.

The controversial ability to make these details public was facilitated by new legislation contained in the Finance Act 2009.

This latest measure is one in a series of anti-tax avoidance initiatives being undertaken by HMRC, having been granted over £900m in extra funding by the current Government. HMRC aims to collect £2bn in extra revenues each year by 2014-15 from its tax evasion division, and £22bn each year from all divisions.

Gary Ashford, Chairman of the CIOT’s Management of Taxes Sub-Committee, said that it was right that HMRC are tacking tax evasion in an uncompromising way, but care needs to be taken to ensure that any penalties are fair: “…it is crucial that HMRC get decisions right on whether errors are deliberate or simply the result of carelessness and that penalties and other sanctions are proportionate.”