In February 2011, HMRC instigated the Managing Deliberate Defaulters programme as part of their broader work to tackle tax evasion.
On 1 April 2013, HMRC introduced a new monitoring programme targeting serious tax defaulters.
Entry into the programme
An individual will be entered into the programme when they have:
- To pay a penalty due to a deliberate understatement of tax for years after 6 April 2009
- Been the subject of a Code of Practice 9 (COP9) investigation irrespective of whether the individual has to pay a penalty due to a deliberate understatement of tax
The new scheme extends the criteria of defaulters who may be subject to enhanced monitoring of their tax affairs to those who have been:
- Charged a penalty for a deliberate offence under specific tax legislation
- Identified during a civil fraud investigation as presenting a continuing high-risk
- Successfully prosecuted for a tax matter
- Charged a civil evasion penalty for dishonesty
- Required to give, and has given, security as a guarantee against future default
- The subject of successful recovery action by an insolvency practitioner
Continued monitoring
HMRC will continue to monitor your tax affairs until they are satisfied that there is no longer a high risk of deliberate or dishonest attempts to get tax affairs wrong. For most people, monitoring will last for between 2 and five years.
HMRC may decide to launch a criminal investigation if a defaulter continues to evade tax whilst in the programme.
Name and shame serious defaulters
The details that may be published include:
- Name of the individual/company
- Address
- Nature of the business
- Amount of tax evaded
- The penalty charged for the tax evasion
Disclosure is the best policy
HMRC may not publish details of any tax evaded if you make a full disclosure, either unprompted or immediately on challenge, and cooperate fully with HMRC throughout their investigation.
Why you should contact us
Our experienced team has a significant amount of experience in negotiating with HMRC and we will ensure that any obligations placed on you as part of the Managing Deliberate Defaulters programme are kept to a minimum.
For more information or help from one of our tax investigation specialists, please contact us using our enquiry form.
