The Government’s proposal to publish the names of deliberate tax defaulters has met with concern from professional tax bodies, as the defamation of individuals by the HMRC could potentially harm the innocent if used inappropriately.

The proposition (BN63 in the Budget) entails the ‘naming and shaming’ of individuals who purposely avoid paying their taxes, and was part of a number of schemes outlined by the Chancellor in an effort to prevent tax evasion in the UK. The method has been used before, notably in Ireland, and is, on face value, morally difficult to oppose. However, The Chartered Institute of Taxation (CIOT) has warned that the proposition must be applied with caution and only in appropriate circumstances.

John Whiting, Chairman of the CIOT’s Management of Taxes Sub-Committee, stated: “A question for HMRC is what controls will there be over ensuring that someone who is affected by an HMRC mistake does not get into this sanction? And if HMRC do make a ‘naming’ mistake, would proper compensation be paid?”

The CIOT proposes several methods of ensuring that only the deserving parties are ultimately named and shamed, including instating a proper system of judgment which determines what offences would warrant a sanction; the limitation of the method to include only tax evaders who deliberately default and conceal; ensuring that HMRC will not use this power as a threat towards settling unrelated tax disputes; and the ability for the tax payer to appeal against publication.

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