Naming and Shaming begins

Names of so-called “deliberate tax defaulters” have been published this week on the HM Revenue and Customs website, as the naming and shaming legislation is used for the first time ever.

The first 9 were named today, and HMRC will update the list of those published on its website each quarter. The 9 put in the stocks today are:
1.    Southport Leisure PLC, Licensed Bar and Club, Southport.
2.    Joseph Tyrrell, Hairdresser, Liverpool.
3.    The Trade Beverage Company Ltd, Buying and Selling Wine, Mobberley, Cheshire.
4.    Mr Rafique Maroof Raja, Licensed Grocer, Thornton, Kirkcaldy.
5.    Mr S Stewart, Pipework Specialist, Woolton, Liverpool.
6.    Mr David Alan Jay, Property Maintenance, Cranham, Essex.
7.    Gatemain Contractors Ltd, General Building, Wainscot, Rochester.
8.    Menemis Ltd, trading as Unlimited Knits, Knitware Manufacturer, Nottingham.
9.    Mr Brian Clifford Tattersall, Coach Operator, Bolton.

With all the press coverage at the moment about multinational companies allegedly avoiding billions of pounds of tax, most of the press have castigated HMRC’s Stalinistic approach – which seems to have focused on small businesses, operated by working-class businessman; many of whom may not have been properly advised.

The Exchequer Secretary said: “HMRC is dedicated to clamping down on people who break the law, and finding and taking action against tax cheats who try to evade their responsibilities. There are consequences for those who refuse to tell HMRC about their full liability. It encourages defaulters to make a full and prompt disclosure and cooperate with HMRC to avoid being named.”

A deliberate defaulter is a person who incurs a penalty for:

  • an inaccuracy in a return or document for a tax period beginning on or after 1 April 20
  • a failure to comply with certain obligations, such as the obligation to notify HMRC of a liability to tax;
  • A VAT or excise wrongdoing that occurred on or after 1 April 2010.

Deliberate defaulters can be named where, during a tax investigation into a period starting on or after 1 April 2010:

  • it is established that the taxpayer is liable to a penalty for a deliberate default; and
  • as a result of the deliberate default, more than £25,000 of additional tax would have been lost without HMRC’s intervention; and
  • the taxpayer has failed to make a full disclosure to HMRC at the outset, so failing to receive the maximum possible reduction in penalties for full and early disclosure and assistance.

However, their information will not be published if the person earns the maximum reduction of the penalties by fully disclosing during the tax enquiry. Details are published only once all appeal routes against the related tax and penalties are exhausted, and are published within 12 months of the penalty becoming final.

What does this mean for me?
Anyone who is undergoing a tax investigation or compliance check, or has any tax problems to disclose, is potentially at risk of being named and shamed.  However, where people are properly represented then it should be extremely exceptional to end up on this list.  A good quality tax investigations specialist will advise their clients in a way that will usually preclude them from being named and shamed in this way.

How can Lynam Tax Investigation Specialists Help Me?

If you are undergoing a tax enquiry, or have any tax irregularities to disclose, then you should consult a specialist.  Lynam Tax Enquiry Experts have a huge amount of experience in dealing with disclosures and tax investigations. We will be able to assist you in obtaining the optimum outcome, including avoiding being named and shamed.

*For a free, private, no obligation consultation, call Paul Lynam today on 0845 643 9997
or Andrew Nutbrown on 07718 778710