The tax name and shame game


Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

Tax name and shame game

In his 19th-century heyday, Phineas T Barnum was renowned as a showman, promoter, serial entrepreneur and even a politician.

Even though he died more than a century ago, his fame endures, thanks in no small part to a successful West End musical and recent Hollywood movie.

But Barnum is known for even more than his fabulous and reputedly terrible exploits.

As gifted in his use of language as his commercial opportunism, he is believed to have coined the expression that “there is no such thing as bad publicity”.

Whilst there are plenty of examples in contemporary society of individuals who regard both fame and infamy as creating the potential to generate money, there are many others who remain capable of feeling shame.

It is one element of traditional and – particularly – social media, instantly turning men and women into global figures of fun.

The authorities are well aware of this. In the US, for example, a country which was arguably the first to recognise and reward celebrity culture, they publicise those men and women accused of dodging their personal taxes.

West side is the best side…for tax name and shame

California has just published a list of what it describes as the state’s “top 500 delinquent taxpayers”.

The classification is headed by a real estate developer accused of failing to pay more than a quarter of a billion dollars in tax but also features a prominent actresses, one leading comedian, a controversial movie producer and a singer.

More than creating news copy, I suppose that the idea behind the list is that publicising the alleged misdeeds of these errant souls will perhaps shame them into coughing up whatever sums are owed.

Tax name and shame in the UK

Certain UK media have revelled in reporting on the US development but it’s worth pointing out that it’s far from novel and certainly not a practice confined to America’s West Coast.

HMRC is not shy when it comes to letting the public know the identities of individuals and organisations which it thinks are failing to fulfil their civic duty by not paying all the taxes due.

Since the 2009 Finance Act came into force, HMRC has published a list of “people who deliberately get their tax affairs wrong” on its website. In the last year alone, more than 400 personalities and companies who have failed to pay their taxes.

They range from taxi drivers to joiners, hairdressers to dancers, motor mechanics to waste companies and – atop the lot – a Chinese e-commerce business said to owe almost £700,000.

Noting the current fascination among some sections of the public and business communities for raising profile, the taxman appears intent on making as many as it can STARs of a somewhat different variety.

One of the provisions of the Serial Tax Avoidance Regime (STAR, for short) allows it to publish the names “and certain other details” of those whose use of schemes amounts avoidance.

The legislation boasts of being “part of a range of measures to clamp down on tax avoidance”. Its use of publicity as one element in that anti-avoidance arsenal is because HMRC believes “the prospect of naming will act as a deterrent because the effect of being publicly named could affect a serial avoider’s public standing”.

Similar powers exist under the rules aimed at Promoters of Tax Avoidance Schemes (PoTAS) which came into effect in 2014.

Instead of those using avoidance schemes, those regarded as marketing avoidance initiatives can be effectively tagged – needing to identify the fact that they have come in for critical scrutiny on their websites and to their clients.

Let’s not forget either that in age when we are constantly told that we are our own brands, HMRC is now able to call on the services of the body responsible for policing how commercial entities market themselves.

On three occasions in the last year, the Revenue has succeeded in having the Advertising Standards Authority (ASA) rule against “tax avoidance providers” making what were deemed to be “misleading” claims about their schemes, including the suggestion by one that HMRC had actually endorsed what it was up to.

Conclusion – tax name and shame

Of course, HMRC is only too well aware that publicity is a double-edged sword. Its senior management have had the wounds sustained to their reputations in bruising encounters with the House of Commons’ Public Accounts Committee aggravated by press coverage of their performance.

Nevertheless, over the years it has developed what various observers see as something of a thick skin when it comes to such criticism.

Like its Californian counterparts, it believes that there are others who are rather more sensitive and possibly likely to respond in the manner desired if they too are portrayed in an unflattering light.


If you or your clients are in dispute with HMRC over unpaid tax then please do not hesitate to get in touch


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