HomeHMRCDeliberate Tax Defaulters. It’s not just about the miscreants

Deliberate Tax Defaulters. It’s not just about the miscreants

Every three months HMRC push out their “Current list of deliberate tax defaulters” which details the name of the miscreant defaulter albeit an individual or a company their published address, the period of the default, the amount of tax and or duty on which penalties are based and the total amount of penalties charged as well as various disclaimers relating to businesses with similar names and or operating from the address quoted.

Whenever these lists are published we read stories of XYZ who was charged thousands of pounds of penalties based on thousands of pounds of outstanding debt. What the list fails to tell us is actually how much of the total debt due for tax or duty was recovered nor how much of the penalty charged was actually collected nor how was the debt due actually calculated.

A case in point is a security company shown in the latest round of defaulters as having a debt of £104,000 upon which £63,000 of penalties have been charged. Looking at companies house and the company is in liquidation and the Liquidators latest Summary of Receipts and Payments shows that £6,500 was raised from the bank and that after paying £6,300 of which £5,100 went on the cost of preparing the Statement of Affairs there is only in total £156.33 left.

What therefore is the likelihood of any of the £104,000 tax debt, let alone the £63,000 penalties actually being collected? Somewhere between Bob Hope and No Hope is the obvious answer.
It seems that only 1 set of accounts was actually filed and that was micro accounts for the year to March 2016. So one has to ask how was the £104,000 calculated? Was it masses of estimates? Was it based on paye records? And further how could penalties get to £63,000 on a debt of £104,000?

Let’s be honest we are not likely to get this information are we but as a practitioner whose clients are chased at length and rapidly for often insignificant amounts and equally often incorrect amounts and amounts that have been paid I question how were these miscreants allowed so much lassitude? This case apparently related to debts accumulating from 6 Apr 2015 to 5 Apr 2017 that’s TWO years not two months TWO years compare that with your own client base are they allowed to go two years? But two years doesn’t seems to be a long time at all when the list is reviewed as there are cases showing debts accruing over FOUR or FIVE years.

This list is supposed to be used to name and shame those that don’t pay the debts that are due and to maybe defer would be defaulters from not paying but to me it actually shames HMRC because it shows that they are allowing huge debts to develop over a significant timescale and whilst they trumpet about the penalties they have charged nothing is mentioned about how much they actually collected which could well be nothing at all.

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