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The government has seen a dramatic rise in the number of taxpayers facing scrutiny through a special initiative dedicated to combatting tax evasion.
A total of 6,051 individuals and businesses were referred to HMRC’s managing serious defaulters (MSD) programme in 2014/15, up 31% on the previous year’s 4,624, according to official figures released following a freedom of information request by accountancy group Baker Tilly.
The numbers show growth of 423% between 2013/14 and 2012/13 (1,094).
The government has seen a dramatic rise in the number of taxpayers facing scrutiny through a special initiative dedicated to combatting tax evasion.
A total of 6,051 individuals and businesses were referred to HMRC’s managing serious defaulters (MSD) programme in 2014/15, up 31% on the previous year’s 4,624, according to official figures released following a freedom of information request by accountancy group Baker Tilly.
The numbers show growth of 423% between 2013/14 and 2012/13 (1,094).
The Revenue uses MSD to make sure taxpayers file returns and make payments on time. Inspectors visit business premises to check records or assets, and carry out compliance checks into defaulters’ tax affairs.
Those subject to the programme are often taxpayers who have been fined for deliberately under-declaring income in their returns. The number of such penalties almost trebled in 2013/14 to 14,401 from 5,162 a year earlier.
There is no right of appeal against inclusion in MSD and no time limit; defaulters are kept under scrutiny until the tax department is satisfied they are meeting all obligations and have changed their behaviour.
Mike Down, head of tax investigations at Baker Tilly, predicted a further rise in numbers for MSD.
“As we enter a new parliament, there will be immense pressure on HMRC to clamp down on defaulters in attempt to reduce the tax gap, so it is likely that we will see more people referred into the programme in this financial year,” he said.
