Can my tax affairs be made public?

Well, if you’re on the Inland revenue naughty list they certainly can!

In another interesting development HM Revenue and Customs (HMRC) have for the first time published a list of ‘deliberate defaulters’ who have been found to have underpaid at least £25,000 of tax during enquiries into their 2010 tax affairs.

The list features nine names with fines ranging from a few thousand pounds to £291,830, and is designed to “encourage defaulters to make a full and prompt disclosure and cooperate with HMRC to avoid being named”

This is just one part of a new initiative by HMRC  called the Managing Deliberate Defaulters (MDD) scheme, and anyone who evades tax will also have their financial affairs watched closely for up to five years to make sure they do not re-offend and HMRC have already sent out over 900 letters to previous defaulters.

Other measures of the scheme include:

making announced or surprise inspections of books and records
asking for additional information or documents to be sent in with the person’s tax returns
carrying out in-depth compliance checks into all or any part of the person’s tax affairs
observing and recording the person’s business activities and cross-checking details in their accounts
requiring more frequent VAT returns or cancelling certain favorable VAT schemes for miscreants.

Ordinarily, tax offenders can be fined up to 100% of the tax they have not paid, but Offenders who have been trying to evade tax in some offshore jurisdictions now face fines of up to 200% of the unpaid tax.

Tax evasion has always been illegal and been punished to the full extent of the law, but the new ‘social scorn’ that HMRC are trying to add could prove an even more effective deterrent than the previously anonymous penalty regime.

All taxes rightly due should be paid, but there is absolutely nothing wrong in mitigating tax bills using legal and ethical taxation planning. If you have any questions or concerns about your taxation affairs please contact us on 0845 177 5500 or through your usual Burgis & Bullock channels or online.

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