Deliberate defaulters to be monitored by HMRC

HMRC has announced that it will take a hard line to what they call “deliberate defaulters” – these being businesses and individuals that have been found to have made deliberate errors in the tax affairs resulting in tax losses or more than £5,000.

Under its new Managing Deliberate Defaulters (MDD) programme HMRC will impose additional checks and information requirements on any business or individual that has been to have made deliberate errors for a period of five years.

Any individual caught under the programme will also have any company or partnerships they are involved in scrutinised by the scheme as well. Anyone caught under the scheme will be notified by HMRC by letter that will require them to submit additional information.

The checks can take a variety of forms, including:

• making announced or unannounced inspection visits to carry out pre-return checks of their books and records
• in-depth compliance checks into all or any part of the defaulter’s tax affairs
• observing and recording the defaulter’s business activities and cross-checking details in their accounts. This could include test purchases and inspections of their suppliers’ and customers’ records.

About the Author

Mark Higham

Is the Managing Partner at Numero Accountancy LLP and an ACCA qualified accountant. Having spent time working in large Plc's and Private Limited Companies in Senior Finance roles Mark start his own practice in 2005. In this time Mark has been a finalist in Doncaster Chambers Entrepreneur Year and Numero have been finalists in the Rotherham Chamber New Business Start-Up and Most Innovative Use of Technology Awards.

Posted on 18th April, 2011