The tax office has announced it will extend its close monitoring of individuals and businesses who have deliberately evaded paying tax. Those suspected of tax evasion will have up to their last five years of tax affairs scrutinised.
HMRC’s new scheme is known as Managing Serious Defaulters (MSD) and was launched at the start of this month with the aim of ensuring regular tax defaulters comply with their tax obligations.
MSD has been brought in to replace a previous scheme known as Managing Deliberate Defaulters (MDD), which was launched in 2011. In a similar way to the new scheme, MDD was designed to target individuals and companies through close monitoring. Early indications have suggested that those monitored through the MDD scheme are reforming their ways, with many now disclosing concealed income and amending previous tax returns. The new scheme, MSD, expands on the older one by including tax evaders who have previously received a civil evasion penalty for dishonestly evading VAT, those who are required to give a security deposit for VAT, Environmental Taxes, PAYE or NICs and those who became deliberately insolvent as a way of dodging their business taxation obligations. The MSD scheme will also allow for more in depth scrutinising which could include; unannounced visits by HMRC, demanding records so that they can be checked, in-depth compliance checks into a person’s tax affairs and observing and recording business activities and cross-checking details in accounts.
Director of General Enforcement and Compliance at HMRC, Jennie Granger, said: “HMRC monitoring has proved effective in making tax cheats comply with their tax obligations. MSD will keep the pressure up on even more defaulters.”
