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Out-Law News 1 min. read

HMRC 'names and shames' more deliberate tax defaulters

Details of fines included on a second public list of tax defaulters shows that HM Revenue and Customs (HMRC) is "cracking down harder than ever before" on businesses and individuals that deliberately underpay tax, an expert has said.

New entries on the list (6-page / 68KB PDF) include a Birmingham-based labour provider, which was fined £1.1 million against underpaid tax of almost £2m; and a petrol wholesaler, which received cumulative fines of nearly £720,000 for over £1m in underpaid tax.

"The scale of some of these fines shows that HMRC is quite prepared to put an uncooperative company or individual out of business," said tax expert Phil Berwick of Pinsent Masons, the law firm behind Out-Law.com.

"HMRC is sending a message that if a business or individual fails to co-operate with them, not only will they be named and shamed, they could be hit with a huge fine," he said.

HMRC began publishing the details of deliberate tax defaulters on its website in February this year. The 2009 Finance Act allows it to so where the underpaid tax amounts to at least £25,000, and where it has carried out an investigation and charged the taxpayer one or more penalties for deliberate defaults.

HMRC defines a default as either a deliberate error on a tax return, or where a taxpayer deliberately does not comply with its tax obligations. Taxpayers will not be named where penalties are reduced by the maximum available because the individual or company fully disclosed the details of the defaults to the tax authorities, and information must be removed after 12 months.

Berwick said that businesses and individuals with historical tax irregularities should "take advantage of any opportunity HMRC gives them to cooperate" or risk "very significant penalties".

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