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Number of individuals on HMRC’s tax evasion watch list jumps 30% in a year

Publications featured in include: FT Adviser

Individuals suspected of avoiding or evading tax can be placed on HMRC’s ‘Managing Serious Defaulters’ programme. The programme aims to stop serious tax evaders and avoiders by invasively monitoring their tax affairs for up to five years.

When a taxpayer is placed on the scheme, HMRC can make unannounced inspections of their home or business or carry out rigorous compliance checks on any part of their tax affairs without any warning. Some individuals are also required to submit additional documentation alongside future tax returns to ensure they are now complying with the law.

If HMRC includes a taxpayer in the programme and they again fail to pay the tax HMRC believes they owe, the tax authority can levy significant penalties. HMRC can also ‘name and shame’ repeat offenders on a public list of tax defaulters. If the offence is serious tax fraud then HMRC will look to prioritise the prosecution of that individual.

Sean Glancy, VAT partner in our London office, says: “Being placed on the deliberate defaulters’ programme is a very unpleasant experience. HMRC can watch your every move for years on end.

The prospect of being ‘‘named and shamed’ online as part of the punishment only adds to the pain for people on HMRC’s watchlist. No-one wants to see their name published alongside the UK’s worst tax cheats and fraudsters.

HMRC has become much better in recent years at identifying individuals it believes have cheated the tax system. The authority is now using big data and new technologies to watch people more closely than ever before, allowing them to focus on repeat offenders.”

HMRC targets the following taxpayers for inclusion in the programme:

  • People charged with penalties for ‘deliberate’ non-payment of tax
  • People who are deemed to be high fraud risks
  • People who have made a business insolvent to avoid paying tax
  • People who have been successfully prosecuted over a tax matter
  • Partners, directors or officers of a business that has evaded tax
*Source: HMRC

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