HMRC’s power to publish the names of deliberate tax defaulters for up to one year is effective from 1 April 2010. It applies to deliberate acts of failure and evasion uncovered by the taxman. Although this measure may sound harsh, HMRC see it as a move towards consistency of treatment for deliberate evaders: the so-called “naming and shaming” extends to the civil code the powers already available to the tax authorities for criminally convicted fraudsters. HMRC also believe, according to their factsheet, http://www.hmrc.gov.uk/compliance/cc-fs13.pdf that public humiliation will encourage voluntary disclosure and deter evasion. This may seem perverse, but perhaps more understandable with the knowledge that HMRC would not be able to publish where a disclosure is unprompted. In addition, there will be no publication for where the potential lost revenue is less than £25,000.

Publication will be quarterly on HMRC’s website (accessible to customers, the media and family) and includes the name and address of the taxpayer or company; details of the business; the amounts of tax evaded; the penalty charged and the period over which the offence occurred. There are strict criteria and HMRC are now working on the introduction of a workable process for each case to allow them to publish, including the opportunity for the taxpayer to demonstrate they should not be publicly named.

It is important to put the new law in context: it applies to tax return periods beginning after 31 March 2010; thus, for example, it will apply to the 2010/11 personal tax return, which will not be due until 31 January 2012. As such, and allowing time for HMRC investigation, appeals and the process of publication, together with the seemingly decreasing number of investigators in HMRC, the first names are unlikely to be seen before 2013. Given this, it is worrying that we have already heard of an instance where a bullish inspector has already verbally threatened publication as a means of obtaining co-operation.

Perhaps in the dens of tax iniquity, publication will become a new badge of honour and street credibility. More positively, the timescale does give anyone seriously considering evasion or disclosure pause for thought!