HMRC compliance checks and tax evasion
A new law allowing HMRC to publish the details of taxpayers who have deliberately evaded tax of more than £25,000 took effect from 1 April 2010.
HMRC have now made available their internal training module so that accountants and tax agents can learn how HMRC will be applying the new legislation.
The ‘deliberate defaulters learning module’ explains the related law and the processes and procedures that HMRC will follow as part of their compliance check processes. Eventually HMRC staff are required to demonstrate that as a result of their compliance check:
- it has emerged that the person has incurred relevant penalties, and
- the potential lost revenue for the relevant penalties totals more than £25,000, and
- the person has not earned the full penalty reduction for quality of disclosure for allthe relevant penalties.
The law applies to both individuals and companies who are caught evading taxes. HMRC plans to publish offender’s names on its website. As the law only took effect on 1 April 2010 it is not expected that any names will be posted online before early 2011.
This type of publicity is common in many other countries but it remains to be seen how many names are eventually published here and what effect, if any, this will have on the level of tax evasion in the UK.