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            Managing serious defaulters

            In February 2011, HMRC instigated the Managing Deliberate Defaulters programme as part of their broader work to tackle tax evasion.

            On 1 April 2013, HMRC introduced a new monitoring programme targeting serious tax defaulters.

            Entry into the programme

            An individual will be entered into the programme when they have:

            • to pay a penalty due to a deliberate understatement of tax for years after 6 April 2009
            • been the subject of a Code of Practice 9 (COP9) investigation irrespective of whether the individual has to pay a penalty due to a deliberate understatement of tax

            The new scheme extends the criteria of defaulters who may be subject to enhanced monitoring of their tax affairs to those who have been:

            • charged a penalty for a deliberate offence under specific taxes legislation
            • identified during a civil fraud investigation as presenting a continuing high risk
            • successfully prosecuted for a tax matter
            • charged a civil evasion penalty for dishonesty
            • required to give, and has given, security as a guarantee against future default
            • the subject of successful recovery action by an insolvency practitioner

            Geraint Jones

            Partner, Private Client Tax

            T +44 (0)20 8922 9354
            E geraint.jones@bkl.co.uk

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              Continued monitoring

              HMRC will continue to monitor your tax affairs until they are satisfied that there is no longer a high risk of deliberate or dishonest attempts to get tax affairs wrong. For most people, monitoring will last for between 2 and five years.

              HMRC may decide to launch a criminal investigation if a defaulter continues to evade tax whilst in the programme.

              Name and shaming serious defaulters

              The details that may be published include:

              • name of the individual / company
              • address
              • nature of the business
              • amount of tax evaded
              • the penalty charged for the tax evasion

              Disclosure is the best policy

              HMRC may not publish details of any tax evaded if you make a full disclosure, either unprompted or immediately on challenge, and cooperate fully with HMRC throughout their investigation.

              Why you should contact us

              Our experienced team has a significant amount of experience in negotiating with HMRC and we will ensure that any obligations placed on you as part of the Managing Deliberate Defaulters programme are kept to a minimum.

              For more information or help from one of our tax investigation specialists, please contact us using our enquiry form.

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