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The Chartered Institute of Taxation has offered a cautious endorsement to the ‘naming and shaming’ of tax evaders.
The controversial new proposition included in the recently published Finance Bill will see the personal details of deliberate tax defaulters appear on the HMRC website.
The CIOT said that the measure – versions of which are already in place in other countries, including the Republic of Ireland - ‘is, in many ways, hard to argue with as a route to helping improve attitudes towards tax compliance’
The body did, however, raise a number of areas of concern concerning the use by the taxman of ‘naming and shaming’ sanctions, which will be targeted at those who have defaulted on £25,000 or more.
The points included:
- That the proposed legislation be framed in terms of tax evaders who deliberately default and conceal.
- That there be no risk of a genuine dispute with HMRC leading to the department using its new power as a threat to settle.
- That the system of judgement ensures that tax defaulting offences warrant ‘naming and shaming’.
- That the taxpayer be able to appeal to the Tax Tribunal against the online publication of his or her details.
The chairman of the CIOT’s management of taxes sub-committee, John Whiting, said: ‘A question for HMRC is what controls will there be over ensuring that someone who is affected by a Revenue mistake does not get into this sanction? If the department does make a ‘naming’ mistake, would proper compensation be paid?
‘Making a full disclosure to HMRC can avoid this sanction, but the way that rule is hedged around in the Finance Bill makes one wonder whether it is really as much of a safeguard as it should be,’ added Mr Whiting.
