HM Revenue and Customs
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Tax cheat check-up launched
Tax cheats will face up to five years’ detailed scrutiny from the taxman, it was announced today.
Letters will start to land on the doorsteps of 900 tax cheats, telling known evaders that they are now under increased levels of personal scrutiny as part of the new Managing Deliberate Defaulters (MDD) programme.
MDD will closely monitor the tax affairs of individuals and businesses who have deliberately evaded tax to ensure that they are complying with their tax obligations and have demonstrated a permanent change in their behaviour.
David Gauke, Exchequer Secretary to the Treasury,
said:
“Managing Deliberate Defaulters will deter people from
evading tax in the future and reassure honest taxpayers that tax
evaders will be dealt with. This government has made it clear that
we will not tolerate people who refuse to pay their fair share and
HM Revenue & Customs (HMRC) will pursue those who bend or
break the rules.”
HMRC’s Steve Hickman, said:
“Tax cheat check-ups will involve
continued and close scrutiny - it is a real deterrent. If you are
thinking about breaking the rules just remember, you could end up
with HMRC on your back for five years.
“We have worked closely with the accountant community to develop this programme and their help has been invaluable in getting the detail right.”
The level and term of monitoring will depend on the seriousness of the offence, but it is not envisaged that anyone will be released from the programme within two years. HMRC will continue to check that returns are filed on time and that any tax that is due is paid on time, but there will also be regular reviews of deliberate defaulters’ tax affairs to check that any errors or failings have been put right. There are a variety of ways HMRC can monitor a deliberate defaulter’s tax affairs. These include:
* Making announced or unannounced inspection visits to carry out
pre-return checks of their books and records.
* Asking for
certain records so that they can be checked.
* Requiring that
additional information or documents are sent in with the person’s
tax returns.
* Conducting 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. For example, we may make
test purchases or inspect the records of one or more of their
suppliers or customers.
* For our VAT customers we may:
- Require submission of quarterly or monthly VAT
returns.
- Require the same accounting periods for VAT and
Income Tax or Corporation Tax.
- We may withdraw the use of
certain schemes (for example, cash accounting, annual accounting,
flat-rate scheme, retail schemes) if we think it is necessary for
the protection of the revenue.
Evaders who fail to keep their tax affairs in order will face increasingly intrusive interventions from HMRC and if deliberate evasion continues, HMRC may also start criminal proceedings.
Safeguards are also being put in place to ensure that deliberate defaulters do not escape scrutiny by simply starting up a new business under a different name or identity. In these instances HMRC may continue to monitor the new business.
More information about managing deliberate defaulters can be
found at www.hmrc.gov.uk/about/tax-defaulters.htm
Notes to editors 1. Generally speaking, deliberate
default will be identified where a penalty under Schedule 24 FA07
or Schedule 41 FA08 for Deliberate Understatement (DU) or
Deliberate Understatement With Concealment (DUWC) has been charged
and is final. However, other instances of deliberate evasion may
be identified through specific disclosure campaigns run by HMRC,
Civil Investigations of Fraud and where a person has been
convicted of a criminal offence involving tax evasion.
2. Cases within these categories settled since 6 April 2009 will be included in the MDD programme.
3. Follow HMRC on Twitter at: @HMRCgovuk.
NAT 11/11 Issued by HM Revenue & Customs Press Office Press enquiries only please contact:
Contacts:
HMRC Out of Hours
Phone: 07860 359544
NDS.HMRC@coi.gsi.gov.uk
Jonathan Hall
Phone: 020 7147 0052
jonathan.hall@hmrc.gsi.gov.uk