Serious Defaulters

More than 90 percent of British citizens pay their taxes and the small minority who deliberately do not are taking money that would be spent on vital public services. HM Revenue and Customs (HMRC) take these cases seriously, using civil or criminal powers to penalise or prosecute evaders.

The Managing Serious Defaulters programme supports the Government’s statement to tackle tax evasion.

What is the Managing Serious Defaulters Programme’s purpose?

HMRC launched the Managing Serious Defaulters programme (formerly known as Managing Deliberate Defaulters programme) in February 2011 to:

  • deter known defaulters from returning to non-compliant behaviour
  • effect a permanent shift to compliant behaviour
  • deter potential deliberate defaulters
  • reassure people who do pay their tax that HMRC does take action against deliberate defaulters

Who is included in the programme?

The original MDD programme brought in people:

  • charged a penalty for a deliberate offence under specific taxes legislation or otherwise identified, during a Civil Investigation of Fraud, as presenting a continuing high risk to HMRC
  • successfully prosecuted by the Director of Revenue & Customs Prosecutions or another prosecuting authority for a tax matter.

From 1 April 2013, the Managing Serious Defaulters programme will also include people:

  • charged a civil evasion penalty for dishonesty
  • who have given security in respect of VAT, Environmental Taxes, PAYE or NICs
  • who try to get out of paying what they owe by becoming insolvent. Only those where Insolvency Practitioners pursue claims for recovery of money or assets on behalf of HMRC will be brought within the programme

What does the Managing Serious Defaulters programme involve?

HMRC will notify serious defaulters when they are entered on to the MSD programme and tell them what their obligations are. Serious defaulters who fall within the 2009 Budget measure for ‘Close monitoring of serious tax defaulters’ will be told what additional information they must give to HMRC with their Self Assessment tax returns. This additional burden can last for up to five years.

While they are in the programme HMRC will closely monitor defaulters to ensure they are meeting all their tax obligations. If the defaulter fails to meet and maintain those obligations or they present a high risk to HMRC, HMRC will undertake compliance activity under their inspection and information powers.

If the defaulter continues to fail to meet all tax obligations and continues to deliberate default HMRC may impose penalties and can ultimately take criminal proceedings against the defaulter.

What can Cooper Bradshaw do to help?

We can ensure you meet your filing and payment obligations on time and ensure that any material submitted to HMRC is robust and of enough quality to ensure that you are not subject to any further extensive enquiries. This is done by:

  • Keeping enhanced details of records
  • Independant interrogation and verification of facts
  • Constant; and consistent independant monitoring
  • Arming you with practical advice and solutions to ensure there is no room for ambiguity over your tax affairs

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