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What are Deliberate Tax Defaulters?

Deliberate tax defaulters are businesses that have intentionally failed to meet their tax obligations. This includes making deliberate errors in tax returns or deliberately failing to notify His Majesty's Revenue and Customs (HMRC) of a tax liability.

HMRC has the authority to publish details of these defaulters as a "naming and shaming" measure to deter non-compliance, provided certain criteria are met.

HMRC may publish a defaulter's details if all of the following conditions are met through a compliance check:

  • ·A penalty has been incurred for a deliberate (or deliberate and concealed) inaccuracy, failure to notify, or VAT/Excise wrongdoing.
  • ·The default occurred on or after April 1, 2010.
  • ·The potential lost revenue (PLR) from the default exceeds £25,000.
  • ·The taxpayer did not make a full, unprompted disclosure to HMRC at the outset of the investigation, meaning they failed to receive the maximum penalty reduction for cooperation.

The "naming and shaming" policy is a civil penalty aimed at encouraging compliance, distinct from criminal prosecutions for tax fraud. In addition to financial penalties, being listed can lead to significant reputational damage and scrutiny from business partners or professional associations.

Taxpayers can avoid being publicly named by making a complete and honest disclosure (known as a "Contractual Disclosure Facility" or COP9 in cases of suspected serious fraud) and cooperating fully with the investigation to achieve the maximum penalty reduction.

Apart from the publish date, the dates on the tax defaulters list are the dates of the actual offences, which may have gone undetected for years and cases only end up on the list if: in consequence of an investigation conducted by the Commissioners, an offence is detected. Before publishing any information, the Commissioners must inform the person/company that they are considering doing so and afford the person/company reasonable opportunity to make representations about whether it should be published.

The data can be accessed on the Company Watch Platform via Deliberate Tax Defaulters menu item under the Company Info section. Data contains the date published by HMRC, period of default, address at the time of default, line of business as listed at HMRC, total tax/duty on which the offence is based, the total amount of penalties for the office. 

In addition, all Deliberate Tax Defaulters will appear as a “Red Flag” Notification type on the Health Profile.