HMRC keeps up the pressure on tax cheats

TAX cheats who become insolvent to dodge their companies' tax obligations face up to 5 years' scrutiny from HM Revenue and Customs (HMRC).

Under Managing Serious Defaulters (MSD), launched today, HMRC will closely monitor the tax affairs of more individuals and businesses who have deliberately evaded tax for up to 5 years. From 1 April 2013, HMRC is extending the close monitoring of the tax affairs of those who deliberately choose not to pay what they owe. MSD will ensure that they comply with their tax obligations and permanently change their behaviour.

MSD replaces and expands the Managing Deliberate Defaulters (MDD) scheme, which was launched in 2011 and aims to keep tax cheats on the straight and narrow through close monitoring. Early indications suggest that those monitored are changing their behaviour. This has led them to disclose concealed income and amend previous tax returns.

MSD will include evaders who:-

► Have received a civil evasion penalty for dishonestly evading VAT.

► Are required to give a security deposit for VAT, Environmental Taxes, PAYE or NICs.

► Become deliberately insolvent as a way of dodging their business taxation obligations.

David Gauke, Exchequer Secretary to the Treasury, said:- "Increasingly, evaders are using contrived insolvency to evade tax, either through liquidation of a business or bankruptcy of an individual. It is only fair that someone who has deliberately tried to evade tax should face extra scrutiny from HMRC. This measure, along with those announced in the Budget, demonstrates that we will crack down on people who don't pay what they owe."

Jennie Granger, Director General Enforcement and Compliance at HMRC, 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."

Extra scrutiny under MSD can include:-

► Unannounced visits by HMRC.

► Asking for records so they can be checked.

► Carrying out in-depth compliance checks into persons tax affairs.

► Observing and recording business activities and cross-checking details in accounts.

► Defaulters who fail to keep their tax affairs in order may face criminal proceedings.

More information can be found online.

'Go local' - Mayor message to European Commissioner Hahn

LIVERPOOL'S Mayor has called on European Commissier Hahn to support efforts to ensure that decisions on EU funding are made by City Regions rather than national government. His intervention follows an announcement on Tuesday that 784 million Euros of European Commission funding is being diverted away from England to Scotland, Wales, and Northern Ireland. Commissioner Hahn is responsible for Regional Policy and has leading role for the European Commission in developing the new round of EU Structural Funds for 2014 to 2020. "The best people to decide how money should be spent are the people who live there. We understand the challenges, the problems and the solutions. We will make the money go further and ensure that every penny creates jobs, services and wealth for our regions." said Mayor Joe Anderson. Liverpool and partners in Liverpool City Region believe that decisions on which projects and initiatives should receive EU funding must be made locally (as had been the case under Objective 1).   "There is a risk that too many decisions on EU funding will be decided at the national level. Looking at the next seven years we need to ensure that funding decisions are genuinely made at the local level. The bigger the gap between funding and decision making, the more chance that cash will simply miss the mark. Delegation is vital. The new programme must be delegated. Liverpool people understand Liverpool needs. No 1 should presume that London'-based civil servants know our priorities better than we do" said Mayor Joe Anderson.