Managing deliberate defaulters
The Managing Deliberate Defaulters (MDD) programme will most certainly affect the accountancy profession when further documentation details are required for certain clients, reports the CIPP’s Diana Bruce.
Background
In February 2011 HMRC launched the new Managing Deliberate Defaulters (MDD) programme where known tax cheats will face up to five years of detailed scrutiny under increased levels of tax inspection. More than 90% of British citizens pay their taxes and this programme targets the small minority who are deliberately withholding money from the revenue.
Within the 2009 Budget, the chancellor announced that those individuals who incur a penalty for deliberate evasion in respect of tax of £5,000 or more will be required to submit returns for up to the following five years showing more detailed business accounts information and detailing the nature and value of any balancing adjustments within the accounts.
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I just wish HMRC could get the basics right ...
Like ordering enough paper so that they can send out the self assessment reminders on time and answering the phone when you try and call them. Both of which would help taxpayers pay the "right amount of tax" to use their phrase.
What a mess!
If someone from a different planet were reading this they (it?) might be wondering why the UK tax law makers were content to allow tax law to become so complicated, and the tax collection system so lax, that these sorts of steps are necessary! This whole MDD stuff seems a sorry indictment of a tax system that simply isn't "fit for purpose", as they say.
I would hope that qualified tax professionals would not have candidates for MDD in their client portfolios, so this probably isn't the best forum to be discussing them. My impression of HMRC's proposals is that they sound heavy-handed and potentially breach all sorts of common law and human rights requirements. Surely these people should just be banged up for tax fraud? If so, they are not going to have any ongoing tax affairs for anyone to monitor, end of story.
The third paragraph above just about sums it up. (Does anyone hear echoes of IR35 here?) There are perfectly good laws and procedures in place already. If HMRC used them surely they wouldn't need all this extra stuff! And where are the extra HMRC resources to run the MDD going to come from? - all we experience in practice is local tax offices closing down and a service that seems to be creaking to a halt.
Yep, the lunatics really have taken over the asylum this time!
What's good for the Goose .......
Can we name and shame HMRC employees who continue to burn tax payers money by trying to pursue futile IR35 et al cases.