Contractors' Questions: Can HMRC 'name and shame' me?

Contractor's Question: I am concerned about being 'named and shamed' by HM Revenue & Customs on its new list of tax offenders , following a disputed tax payment with the Revenue dating back many years ago. Does the passage of time, or the fact that the liability was for only a few hundred pounds, preclude me from being blacklisted?

Expert's Answer: HM Revenue & Customs does now have the power to 'name and shame' tax evaders.

The power to publish the names and details of those who evade tax ('deliberate defaulters') is contained in Section 94 of the Finance Act 2009. It was brought into effect by statutory instrument from 1 April 2010.

However, positively for you, the new HMRC rules for publishing a taxpayer's name and details are not triggered by a taxpayer having outstanding debts. They apply when tax has been evaded and the taxpayer has been charged a penalty on the tax arrears. HMRC has no powers to publish details of people just because they happen to owe tax.

That said, debtors' details can become public if things go so far that HMRC gets a court judgment or starts bankruptcy proceedings. If you are still disputing the debt, you can find good independent advice on the TaxAid website.

Meanwhile, and according to the new rules, there are various criteria which must be met before HMRC can publish defaulters' names, of which the key ones are:

• It applies to those who have been charged a penalty under Sch 24, FA 2007 (inaccuracy in a return or document) or Sch 41, FA 2008 (failure to notify chargeability), where their behaviour falls into the 'deliberate' categories.
• The tax evaded must be at least £25,000.
• No details will be published if the taxpayer cooperates and gets the maximum penalty reduction.
• HMRC will only publish details if the deliberate failure or wrongdoing occurs on or after 1 April 2010 or relates to a tax period beginning on or after that date. HMRC will not publish details where the relevant penalty is for an inaccuracy in a return or other document and the tax period begins before 1 April 2010.
• HMRC must tell the taxpayer that their details will be published and the taxpayer can make representations.

Further information about how HMRC will use the new power is available in the department's in-house training manual, which it has published on its website.

The expert was Jane Moore, technical manager at the Tax Faculty of the Institute of Chartered Accountants of England and Wales.