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Managing serious defaulters

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 taxes 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 shaming 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 of former tax inspectors have 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.