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HMRC have launched a new Managing Deliberate Defaulters (MDD) programme aimed at keeping an eye on known tax evaders to ensure they are complying with their tax obligations . . .

900 tax cheats, both individuals and businesses, across the country are due to receive letters from the taxman informing them of increased levels of personal scrutiny as part of their continued fight against tax evasion.

The level and term of surveillance will depend on the seriousness of the offence but it is thought that the minimum length of time anyone will be confined to the programme for will be 2 years.

HMRC will continue to check that returns are filed on time and that any tax due is paid on time, but there will also be regular reviews of deliberate defaulters’ tax affairs to ensure that any failings or errors have been corrected.

HMRC will monitor tax affairs in a variety of ways including:-

  • Making announced or unannounced inspection visits to carry out pre-return checks of books and records
  • Asking for certain records so that they can be checked
  • Requiring additional information or documents to be submitted along with tax returns
  • Conducting in-depth compliance checks into all or any part of the person’s tax affairs.
  • Observing and recording a person’s business activities and cross-checking details in their accounts, e.g. inspecting records of suppliers or customers
  • Requiring submission of quarterly or monthly VAT returns
  • Requiring the same accounting periods for VAT and Income Tax or Corporation Tax

Taxpayers who are subjected to the extra surveillance of their tax affairs will only be released from the programme once HMRC are completely satisfied they no longer pose a risk.

However, the maximum term of surveillance is 5 years.

If HMRC feel that the taxpayer is continuing to deliberately evade tax then the result will be criminal proceedings.

The introduction of the MDD programme is a simple reminder of the lengths that HMRC and the Treasury are going to in order to boost public revenue.

It is absolutely imperative that all taxpayers keep their tax affairs in order as poor book-keeping will not be accepted as an excuse.

As there is no right of appeal against being included in the new Managing Deliberate Defaulters programme, there could be a huge detrimental effect on any taxpayers’ personal and business life by being included.

If you are worried that you are going to be included in HMRC’s MDD programme or have already received a letter informing you of your participation then get advice NOW.

KinsellaTax has a team of ex-Inspector of Taxes and ex-Customs officers ready to take your call 24 hours a day on 0800 471 4546 or click here to fill in a tax enquiry form.

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