A more stringent regime introduced as part of HMRC’s avowed intent to let the punishment fit the crime can impose a penalty of at least 35% of the tax loss (and up to 100% in extremely serious cases) where HMRC find that deliberate errors have been made.

To make matters worse since April this year anyone who deliberately evades tax is at risk of the whole affair being made public via HMRC’s power to publish on their website details of “deliberate defaulters”. To qualify for this electronic equivalent of the medieval stocks, the deliberately evaded tax must be at least £25,000 and the offender must have compounded the situation by being less than co-operative in assisting HMRC with the enquiry. HMRC say they will publish the minimum amount of information for the defaulter to be identified, including business details and the amounts of tax and penalties.

Evidently HMRC wants to make people think twice before evading tax and to inculcate in the taxpaying public’s mind a common view that deliberate tax evasion is socially unacceptable. Now HMRC officers have a means of intimidating and or winding up taxpayers. Factsheet CC/FS13.

This publication is designed to help taxpayers understand the process of naming and shaming but is being issued at the start of enquiries usually before even an innocent mistake has been demonstrated by HMRC, let alone deliberate wrongdoing. So right at the start of an enquiry the threat of exposure is suspended like the sword of Damocles above the taxpayer’s head.

This approach is clearly inappropriate but I urge those getting this factsheet (or details of it) at the start of an enquiry to keep calm and carry on. For those who have made no mistakes, or whose errors are minor or non-deliberate, there is absolutely no question of being named in this way. Instead, consider responding in a polite way to any reasonable requests by HMRC, as being the surest way to close the enquiry quickly. On the other hand, if Factsheet CC/FS13 touches a nerve, maybe it is time to consult an investigations expert.