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HMRC 'names and shames' deliberate tax defaulters

HMRC has begun publishing the names of small businesses who they say are deliberately defaulting paying tax. 

They say it'll encourage the non-compliant to make full disclosures at the outset of investigations, but do you think it's ethically right for HMRC to 'name and shame' like this - how can they be sure these companies are deliberately defaulting on tax?

And if so, do you think it will encourage companies to be more compliant with investigation and make disclosures? 

I personally take no side, but I'm looking forward to hearing yours.

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By Locutus
22nd Feb 2013 10:55

Gimmick
I think this is just a gimmick that will have little effect.

I suspect many of the small businesses on the list were struggling with their finances. The reality in that situation is that rent, wages, key suppliers, etc. get paid in priority to the Taxman. Maybe it's wrong, but that's just the way it is.

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22nd Feb 2013 11:02

Not sure about it

I wouldn't want to do business with someone who owed so much money, so it may hasten closure of the business, in which case the debt would never be repaid.

Also, if they are publishing names of defaulters they should name ALL tax defaulters, and not just one section of taxpayers.

I don't think it will make much difference to compliance. There will be some who want to be compliant, but have money problems, and publishing their names won't affect their outlook. The one's that don't care won't care anyway, as they will just carry on as normal.

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.

I think its a good idea myself, so long as they do it well.

People who maybe quite happy to take a risk and pay up if their lose wont want to end up in their local paper with a headline as it might harm their image and trading etc. 

Peer pressure is very important for the human species, and gossip is a powerful tool!

Imagine the person who finds out [via the local paper] their spouse has been fiddling their taxes and now all the neighbours know?  Its going to be worse than them having an affair!

If they do it well it could collect a lot of £££.

 

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22nd Feb 2013 11:49

Should we bring back the pillory too?

We only have HMRC's opinion on who is deliberately defaulting. Why is no other action being taken? Presumably they cannot make their case that the people invloved are acting illegally so this is the next best thing.

 

 

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By taxguru
22nd Feb 2013 11:56

Between them the 9 small

Between them the 9 small defaulters owe just £1.50mn, a fraction of what the biggies of the likes of Google etc etc would have been owing. So good way to release some frustration!!!!!!!

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By Davy
22nd Feb 2013 11:57

Defamation?

Wait until they "name" someone who subsequently proves they don't owe the tax. I can see a massive claim for defamation and we, the taxpayers, will pick up the tab, not HMRC.

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22nd Feb 2013 12:47

A shared concern.

Davy wrote:

Wait until they "name" someone who subsequently proves they don't owe the tax. I can see a massive claim for defamation and we, the taxpayers, will pick up the tab, not HMRC.

The effect of HMRC's policy of that they are 'judge and jury,' by publicising the details of alleged defaulters. The damage has been done; even if the taxpayer is able to demonstrate that, for example, there was no error, then he has been 'named and shamed.' Even though HMRC have provided guidelines about the way checks will be made before publication, that process is presumably an internal process, and therefore subject to error (just as their other internal processes are!).

If HMRC managed the tax better, and pursued defaulters more effectively, then that would be a better use of taxpayer money.

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By BKD
23rd Feb 2013 12:02

Finality

Davy wrote:

Wait until they "name" someone who subsequently proves they don't owe the tax. I can see a massive claim for defamation and we, the taxpayers, will pick up the tab, not HMRC.

But that will be difficult (not impossible) if the cases are already 'final' (as defined)

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I don't much care for Richard Murphy

But he has made one good point on this. Why is it only small businesses?

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By Locutus
22nd Feb 2013 12:01

Why only small businesses?

George Attazder wrote:

But he has made one good point on this. Why is it only small businesses?

Perhaps because small businesses don't have the financial resources to sue HMRC for defamation!

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By pawncob
22nd Feb 2013 12:47

Closing down notice

Isn't this a closing down notice by HMRC?

Would you deal with a business that's been named and shamed?

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The criteria for publishing the names...

... is HERE.

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22nd Feb 2013 13:00

perhaps......

AccountingWeb can have a feature where contributors publish the names of HMRC staff who raise assessments that would have involved taxpayers paying more than £25,000 in tax, which ultimately proved to be incorrect.

 

 

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By markfd
24th Feb 2013 07:40

Yes to this...

stephenkendrew wrote:

AccountingWeb can have a feature where contributors publish the names of HMRC staff who raise assessments that would have involved taxpayers paying more than £25,000 in tax, which ultimately proved to be incorrect.

 

 

...and those who exceed their powers during the course of investigation, make threats, make statements claims and allegations unsupported by facts, distort facts, fail to properly consider the information they've been provided with, apply double standards in demanding information on short notice and taking forever to reply...

 

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What about the big boys

It is well known that certain companies just don't pay tax or pay very little, such as Virgin, News International, Amazon, Microsoft, and of course, the most blatant of all, HMRC's landlord Mapeley. 

I say publish their names too and their advisors or maybe a separate immoral list.  The list produced by HMRC is very small beer indeed in the whole scheme of things, when you look at how much large businesses are avoiding.  Very odd...

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By ACDWebb
22nd Feb 2013 17:06

And there's your difference

The VAT Doctor wrote:

It is well known that certain companies just don't pay tax or pay very little, such as Virgin, News International, Amazon, Microsoft, and of course, the most blatant of all, HMRC's landlord Mapeley. 

I say publish their names too and their advisors or maybe a separate immoral list.  The list produced by HMRC is very small beer indeed in the whole scheme of things, when you look at how much large businesses are avoiding.  Very odd...

The ones on the list were caught evading >£25k
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By Glennzy
22nd Feb 2013 14:25

They did this for big offenders a while back

they published the 10 most wanted tax fiddlers in the country, I seem to remember that non of the 10 were actually english, and all of them had comments like "last seen in Nigeria" after them. Some of them owed in excess of £100m from VAT carousel style schemes.

For me it was more of an embarrasment the fact that they allow these people to rip off all this money take it off shore and allow them to follow with it without been caught.

So if they are going to publish your local chip shop for fiddling a few quid it will probably make them some sort of Robin Hood style charactor and improve his business.

I also felt sorry for Jimmy Carr who took the full brunt of the fallout over his tax schemes when many other (Tory Party contributors & Gary Barlow OBE) were also involved but not included in the naming and shaming.

 

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22nd Feb 2013 17:16

Mapeley is the most Ironic

Why have they not undone that deal?

 

It is even worse then subsidising banks through rail fares (think train leasing)

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State Sponsored tax avoidance

Martine McCutcheon, Kerry Katona, footballer players who use Luxembourg media rights scam, most pre-packs...the list goes on of the types of activities that are perfectly legal, but arguably immoral.  And this is the point.  We shouldn't have state sponsored tax avoidance and the law needs tightening up so that people pay their fair share.  A long time ago there were lots of issues with so called Phoenix companies, who could close down overnight and reappear in a slightly different form the next day, cleansed of their debts.

Can anyone tell me how pre-packs are that different from this?

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23rd Feb 2013 00:42

pre packs are the pits
I agree with u doctor on this. It leaves a sour taste in the mouth. Involved in one case where we received administrators notice on the Thursday, on the Monday the Directors bought the business for £15,000 It had gone bust owing over £2m.

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23rd Feb 2013 13:02

Local news!

One of those businesses is in my local area and I watched them being hounded by a reporter last night on the bit after the 10 o'clock news. The business owner did the usual "no comment" thing and scurried back up his drive with the reporter hanging over his gates shouting "are you going to pay your taxes" at his back.

The reporter then announced that the company owed HMRC nearly £100k going back over 3 years and was now to be struck off!

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By BKD
23rd Feb 2013 13:16

Struck off?

I'd be taking the case to the House of Lords before letting that happen ;)

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23rd Feb 2013 15:28

Sorry BKD!

....to be honest, I think the closing news statement was along the lines of "Companies House have told us that the Company plans to be dissolved" or something like that (it was a Friday night i.e. wine and curry night)!!!

It was all quite disappointing really, nowehere near as exciting as watching a dodgy builder getting chased down the road by the Rogue Traders crew after being secretly filmed trying to rip off a fake helpless old lady!!

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By peaky99
23rd Feb 2013 17:16

We have a court system which gives people a fair hearing.

 

They should join forces and take their case to strasbourg re:breach of human rights.

 

make more civil servants redundant

 

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23rd Feb 2013 17:26

I've changed my mind

Looking at the link that George provided, these people are tax evaders.

They are lucky not to be in jail!

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By peaky99
23rd Feb 2013 20:14

Nearly all the names are in the North of England.

 

Are there no defaulting taxpayers in London.

 

Another case of Northern jobsworth public sector workers.

 

Most of total due is penalty which we know is draconian.

 

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24th Feb 2013 04:10

Company directors and v.a.t.

If a director is buying goods through a limited company to avoid payment of v.a.t., is it the company (which is a farming company)that is liable or the director for the fraud and subsequent payment for the tax.. The director is the only active one of three and signs the annual accounts.Depending on the answer to the question, will the director have his name published?

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By peaky99
24th Feb 2013 08:15

If you know the private addresses of tax office staff publish them here

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By BKD
24th Feb 2013 11:04

Private details

If you know the private addresses of tax office staff publish them here

And watch AWeb remove the details and ban the member immediately.

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24th Feb 2013 11:54

Immoral HMRC

If taxpayers are found to have not paid their taxes or deliberately evaded tax, then of course let HMRC chase them by any reasonable means necessary. In my opinion however this is simply another example where HMRC simply don't operative under normal commercial terms that we in the private sector have to abide by every day of the year to stay in business.

How reasonable would it be to put in your terms of contract with a customer/client that if they're found to provide incorrect information to their accountant and fail to us within the specified terms then we will publish their names on a national wesbite, in newspapers, to local reporters etc etc.It's simply not the way business works.

If a company owes tax, then let HMRC pursue the debt, put the company into liquidation or send in a bailiff, if the directors have acted outside of their duties or fraudlently/negligently/wrecklessly then let the liquidator/BIS take the necessary course of action against them. If it's a sole trader owing the tax, then chase the debt under bankruptcy procedures or pursue a criminal COP9 investigation.

If HMRC can't follow the proper course of action as above then they're simply not doing their job properly and publishing names simply highlights that fact, after all these taxpayers aren't Amazon or Google with substantial funds or legal representatives, these are UK individuals and should be easy pickings to recover the taxes (and penalties) owed.

As an extra point, these people have presumably deliberately evaded tax, their liability has now been established and some of them have had 100% penalties applied, They may well pay this in full, does that give HMRC the right to effectively ruin their name and reputation as well as receive the 100% penalty? Have the full circumstances of the cases been reported in the same way? I assume that anyone who has knowingly invested in a sham film partnership or an IT contractor that utilises a sham overseas loan will also receive equal treatment?

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By Locutus
24th Feb 2013 19:02

Agree with Sheepy

I just see this whole naming and shaming of a few alleged small-time tax evaders as a bit of a gimmick, which is a poor substitute for HMRC going through the proper channels to try and collect the tax.

There are plenty of real things that Sheepy mentions could be done and often aren't done.  I wonder if the tax evasion is so serious that a 100% penalty is applied, then why is there not a criminal prosecution that a jury can decide upon?  A criminal prosecution is the sort of sanction that a tax evader really fears - not naming and shaming, as a lot of these people have very little shame to lose in the first place.

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By peaky99
24th Feb 2013 19:55

new website required-taxofficestaffjobsworths.com

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By ACDWebb
25th Feb 2013 00:17

Why?

peaky99 wrote:

new website required-taxofficestaffjobsworths.com

in particular
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By pawncob
26th Feb 2013 12:28

Name and Shame

peaky99 wrote:

new website required-taxofficestaffjobsworths.com

I thought they already had one.

http://hmrcisshite.blogspot.co.uk/ 

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By peaky99
25th Feb 2013 08:52

the anwer is implied in the question !  uh!

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By Old Greying Accountant
25th Feb 2013 09:06

Why not ...

... bring back the stocks, it would also be a good use for the tons of uneaten fruit and veg that gets binned every year!

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25th Feb 2013 11:20

Tax office should look at itself.

The tax office should name and shame itself for taking  months to pay VAT refunds to law abiding tax payers who require the money for their business cash-flow purposes.

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25th Feb 2013 12:21

Commercial

I've edited this quote from Sheepy down a bit, but the meaning is the same:

"If taxpayers are found to have ...deliberately evaded tax, then ...HMRC simply don't operative under normal commercial terms"

Try shopping in your local supermarket, then deliberately evading the checkout.  I think you'll find that normal commercial terms are fairly similar to what's happening here.  And if your local paper has a photo they'll publish that as well.

 

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By trecar
25th Feb 2013 13:01

Naming & shaming

Who is checking that HMRC have got it right? It makes me feel very nervous, I have seen HMRC get it wrong on far too many occasions and I have seen far too many cases of HMRC staff making errors of judgement to have any confidence that the named and shamed are as guilty as portrayed. It also does somewhat smack of state bullying and there are countless examples of what has happened to individuals who are picked on by the public as a result of targeting by the media. And, lets face it this is what is intended. Will HMRC only be happy when someone is hospitalised by some vigilante idiot(s) or worse hounded to commit suicide. I think it says more about the inadequacies of HMRC than it does about deliberate intent to evade taxes. Plus who on earth thought up the ploy of including it in legislation? They would have done far better to draft adequate legislation than indulge in medieval blood letting.

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By TOC
25th Feb 2013 14:06

Surely a taxpayer has a right to expect that his affairs will be dealt with confientially.

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By BKD
25th Feb 2013 14:28

Confidentiality

TOC wrote:

Surely a taxpayer has a right to expect that his affairs will be dealt with confientially.

Although they're civil, not criminal, penalties my view is that - on the presumption that the penalties are correct - in deliberately evading tax the taxpayer has thrown away that right. But then, I've never seen eye-to-eye with Human Rights do-gooders (I'm not saying that you're one of those, TOC   :¬)

 

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25th Feb 2013 14:30

Doesn't it benefit the country?

I have some concerns about the ethics of exposing these people, but I do get sick & tired of criminals, evaders, etc. using the law to their own advantage, when they so blatantly flout it themselves. It often seems that their 'rights' are greater than the honest citizens of this country.

If these are deliberate tax evaders, then how can they sue for defamation? I would hope that HMRC would only publish their names where there is no doubt whatsoever. If they did publish names without these assurances then HMRC would hopefully suffer the consequences.

If HMRC cannot get them to pay (crooks often put all their assets in someone else's name) then they have a rather large advantage over the honest business people who do pay tax. This punishes the honest, and lets the dishonest off scot free.

I don't want to pay extra tax because of people who deliberately, and dishonestly, evade tax. Do you?

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No, Shirley, I don't ...
... but two wrongs don't make a right. Taxpayers' confidentiality should not be overridden in this way.

It will get interesting when someone sues HMRC for libel. HMRC will then have to prove the tax fraud, to a higher standard than they had to achieve to get the tax and penalty in the first place. If the taxpayer has signed a certificate of full disclosure, HMRC might have a watertight case. But if not, they could be in bother.

Then there's the risk of mistaken identity, despite the caveats at the head of the HMRC list.

But after a few lists, hardly anyone will bother to read them, and they will have little effect anyway.

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By peaky99
28th Feb 2013 09:29

i saw that site some months ago ! lol

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By markfd
03rd Mar 2013 02:15

Not so long ago...

...there was a documentary on businesses that had been wrongly closed down for non-payment of VAT.  If HMRC can make an error this serious (and not care about it all if the reaction of 'Dave' Harnett in the program was representative), then there's no doubt they can wrongly label others.

Most of us will have heard stories of HMRC bailiffs turning up and demanding money when none is in fact due.

This whole trial by Twitter is becoming more and more concerning.  The 'ends justifies the means' type of arguments (above) are plain wrong.

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