HMRC’s tax evasion watch list expands by 30%

New research from UHY Hacker Young has revealed a jump in the number of people the tax authority suspects of avoiding or evading tax. 

According to the accounting firm's latest data, the HMRC's watch list has increased by 1,100 in 12 months, hitting 4,800 last year. 

HMRC’s ‘Managing Serious Defaulters’ programme aims to stop serious tax evaders and avoiders by invasively monitoring their tax affairs for up to five years. 

When a taxpayer is placed on the scheme, HMRC can make unannounced inspections of their home or business or carry out rigorous compliance checks on any part of their tax affairs without any warning. Some individuals are also required to submit additional documentation alongside future tax returns to ensure they are now complying with the law.

If HMRC includes a taxpayer in the programme and they again fail to pay the tax HMRC believes they owe, the tax authority can levy significant penalties. HMRC can also ‘name and shame’ repeat offenders on a public list of tax defaulters. 

Sean Glancy, VAT partner in UHY's London office, said, “Being placed on the deliberate defaulters’ programme is a very unpleasant experience. HMRC can watch your every move for years on end.

"The prospect of being 'named and shamed’ online as part of the punishment only adds to the pain for people on HMRC’s watchlist. No one wants to see their name published alongside the UK’s worst tax cheats and fraudsters," Mr Glancy noted.

"HMRC has become much better in recent years at identifying individuals it believes have cheated the tax system. The authority is now using big data and new technologies to watch people more closely than ever before, allowing them to focus on repeat offenders."

According to the accounting firm, HMRC targets the following taxpayers for inclusion in the programme:

• People charged with penalties for ‘deliberate’ non-payment of tax;
• People who are deemed to be high fraud risks;
• People who have made a business insolvent to avoid paying tax;
• People who have been successfully prosecuted over a tax matter; and
• Partners, directors or officers of a business that has evaded tax.