The Government has decided to roll out plans to name and shame serial users of tax avoidance schemes despite concerns the power is unfair and disproportionate.
In a consultation paper published in July, the Government set out a raft of proposals aimed at tackling those who “persist in engaging in tax avoidance”.
One of the measures suggested was to publish the names of the most persistent users of tax avoidance schemes where HM Revenue & Customs has challenged the use of the scheme and won.
The Government said serial avoiders would be defined as those who had entered into three or more tax avoidance schemes during a five-year “warning period”, which are later defeated by HMRC.
In a response document published today, the Government says “only a minority of respondents believed that public naming of the most persistent users of tax avoidance schemes that HMRC defeats would be a fair and effective deterrent.”
Respondents raised concerns that naming those who used tax avoidance schemes suggested they had carried out illicit behaviour, even if they believed they had acted within the law.
Others suggested there should be some form of tribunal approval before names are published, or that there should be a right of appeal against a decision to name and shame.
But the Government has rejected both these submissions.
In the response paper, the Government says: “The Government notes these views. It believes the potential naming of serial avoiders will be a useful tool to counter serial avoidance.
“The Government believes neither a right of appeal against a decision to name nor a requirement for a tribunal to approve naming would be appropriate.
“However, HMRC should advise any taxpayer if they are considering publishing that person’s details and give a suitable time for the taxpayer to make any representations as to why their details should not be published. Once a person’s details are published by HMRC, they will be removed from publication after 12 months.”