During May and June, HMRC published details of deliberate tax defaulters and businesses not complying with money laundering regulations in 2018-19.
In their introduction to the deliberate tax defaulters list, HMRC said:
Each entry on this list is specific to the default dates to which it refers. The address is the one associated with the published person at the time of the default. For example:
- the published person may have changed their behaviour
- the published person may no longer be at the published address
- the business currently at the published address may have no connection with published business
- the business currently at the published address may have the same name as the published business but could be under completely new management
A similar introduction is published with the list of businesses not complying with the money laundering regulations.
In other words, HMRC are covering their backs, just in case the published details are not quite correct or have changed.
Firstly, are HMRC subject to the same data protection regulations as the rest of us? And secondly, how effective is this naming and shaming process in deterring the default activity?
At the coal face, or more commonly the local pub, achieving notoriety for evading tax is likely to be seen as a badge of honour; defaulters achieving a sort of Robin Hood status. To really make this strategy bite surely HMRC should be making a case for being compliant?
Certainly, we would be pilloried by our customers if we started publishing names of companies that are late paying our invoices, and this breach of privacy would surely attract the attention of the Information Commissioners Office?
HMRC’s tactics do smack of punishments handed out in the Middle Ages, at the local stocks for example, where local ne’re-do-wells would be secured and pelted with rotten fruit.
As a tactic to improve tax compliance the notion of naming and shaming does seem to be counterproductive. Perhaps convincing the majority of us that there is a community value in paying taxes would achieve more demonstrable results?
What are your thoughts?