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Tax cheats face heavy scrutiny

Tax cheats face heavy scrutiny

Category: Money

Updated: 22/02/2011
First Published: 22/02/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Tax cheats have been warned they face up to five years of heavy scrutiny from the taxman.

HM Revenue & Customs (HMRC) has said that around 900 known tax evaders can expect a letter to land on their doorsteps imminently.

The tax cheats will be informed that they are now subject to increased levels of personal scrutiny as part of a new programme.

The Managing Deliberate Defaulters (MDD) initiative will closely monitor the tax affairs of individuals and businesses who have deliberately evaded tax to ensure that they are keeping their obligations and have demonstrated a change in their behaviour.

HMRC has said that while the level and terms of monitoring will depend on the seriousness of previous offences, it does not envisage anybody escaping with less than two years of scrutiny into their finances.

Previous tax evaders' returns will be checked to ensure they are filed on time and that any tax that is due is paid on time, but there will also be regular reviews of deliberate defaulters' tax affairs to check that any errors or failings have been put right.

Under the terms of the programme, HMRC will be entitled to:

  • Make announced or unannounced inspection visits to carry out pre-return checks of their books and records.
  • Ask for certain records so that they can be checked.
  • Require that additional information or documents are sent in with the person's tax returns.
  • Conduct in-depth compliance checks into all or any part of the person's tax affairs.

"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," HMRC's Steve Hickman said.

"We have worked closely with the accountant community to develop this programme and their help has been invaluable in getting the detail right."

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