For some years now HMRC has been “naming and shaming” people and companies caught deliberately evading tax of more than £25k. The lists make interesting (or should that be alarming) reading. The list for the June quarter shows that 138 “taxpayers” were caught evading £33m of tax and charged £25m of penalties on top of the tax. The amounts of tax involved range from £25,500 to a staggering £13million.
The objective of publishing the list is to discourage would be tax avoiders and HMRC has just published the results of some research to find out how effective a deterrent it is – the answer is not very! Apparently less than a third of us are aware that the lists exist, this is hardly surprising as they are only published on the gov.uk website (search “deliberate tax defaulters”). It has been suggested that there might be more impact if the lists were published in local papers (and presumably on their websites print readership is steadily declining). Unfortunately, only one in eight of us would stop socialising with someone we saw “named & shamed”
So, what does work? Well, 70% of us are aware of tax penalties and most of the defaulters interviewed by the researchers felt that the penalties had far more impact (some of them didn’t even know they had been named) so it is a pretty good bet that penalties are here to stay!