As part of a crackdown on fraud, HMRC has sent letters to 900 people who it claims to be ‘tax cheats’. These letters warn potential UK tax evaders they may face five years of detailed investigation as part of the Managing Deliberate Defaulters (MDD) programme.
“Managing Deliberate Defaulters will deter people from evading tax in the future and reassure honest taxpayers that tax evaders will be dealt with.
“This government has made it clear that we will not tolerate people who refuse to pay their fair share and HMRC will pursue those who bend or break the rules,” said David Gauke, Exchequer Secretary to the Treasury.
MDD is applicable to an individual or business found to have deliberately understated their tax or VAT bill resulting in a tax loss of £5,000 or more.
“Tax cheat check-ups will involve continued and close scrutiny – it is a real deterrent. If you are thinking about breaking the rules just remember, you could end up with HMRC on your back for five years,” said HMRC head of compliance strategy, Steve Hickman.
The Revenue hopes to raise an extra £7 billion in tax through the MDD programme.
Personally, I do worry about how a ‘tax cheat’ will be defined. Will someone making an innocent error fall within these provisions? We all make mistakes. I understand the Revenue needs to ‘police’ the tax system, but who is there to police the policeman?