The settlements reached with several offshore evaders on a list given to HMRC by French authorities illustrates that its naming and shaming scheme should work
THE TAXMAN’S quest to stop tax dodgers will take another step forward when it begins implement its ‘name and shame tax dodgers‘ power on those who have deliberately defaulted to the tune of £25,000 or more.
It is not difficult to see the deterrent effect such a measure could conceivably have; one would be hard-pressed to find anyone who would happily be named publicly as a tax dodger.
And yet, there are ways that fate can be averted, excellently illustrated by the recent news the taxman reached settlements with evaders on the list of 6,000 HSBC Swiss account-holders given to HMRC by the French authorities.
Instead of the taxman circulating the names of those offshore evaders to the press, it offered immunity in exchange for full disclosure, settling their tax bills and the payment of a penalty of as much as 200% of the tax owed.
Perhaps a ‘naming and shaming’ policy of sorts is already proving to be an effective system, in that a court appearance would be – by definition – in the public eye. Many evaders have kept their anonymity, while the taxman has clawed back hundreds of millions to the public purse. Some might question whether a clawback, although costly, is sufficient recompense for their activities.
Only one of those 6,000 names has found its way into the press after property millionaire Michael Shanly was convicted and ordered to pay back £430,000 in tax and fined an extra £400,000 after he passed up two opportunities to declare his offshore account.
Whether the scheme will be applied lower down the chain is yet to be seen, but whatever the issues about tax-evading offshore account holders avoiding a court appearance – the mechanics of the initiative appear well oiled.
Calum Fuller is the tax correspondent for Accountancy Age and Financial Director.