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HMRC internal manual

Compliance Handbook

The managing serious defaulters (MSD) programme: who will be considered for inclusion in MSD?

Who will be considered for inclusion in MSD?

All qualifying cases are referred to the Serious Defaulters Management Unit (SDMU) and Serious Defaulters Database. SDMU make the decision on whether the case is suitable for Managing Serious Defaulters (MSD), not the caseworker or manager.

Qualifying cases suitable for inclusion within MSD

All suitable cases settled after 6 April 2009

  • All deliberate penalties (concealed or not) charged under Schedule 24 FA07 (inaccuracy), Schedule 41 FA08 (failure to notify or VAT and Excise wrongdoing) or Schedule 55 FA09 (failure to file on time).
  • All settled Civil Investigation of Fraud (CIF) cases in which penalties (pre or post FA07) have been charged. There is more guidance about Managing Serious Defaulters in Specialist Investigations (SI) at CH481350.
  • Certain Criminal Investigation (CI) cases settled after 6 April 2009.

Local Compliance SME taxes for suitable cases settled after 6 April 2009

  • VAT
  • CT
  • Income Tax/PAYE
  • SA

From 1 April 2012

  • I&PB
  • L&C
  • LB

From 1 October 2012

  • Stamp Duty Land Tax and Stamp Duty Reserve Tax compliance checks.

From 1 April 2013

  • Specialist Personal Tax who incur a penalty for deliberate inaccuracy (Schedule 24 FA07), failure or wrongdoing (Schedule 41 FA08) or failure to file on time (Schedule 55 FA09) or otherwise meet the entry criteria as detailed in this guidance.
  • Those charged a Civil Evasion Penalty under S60 or S61 VATA1994 where a person’s conduct in connection with the evasion of VAT involves dishonesty.
  • Those who seek to hide behind insolvency and where an Insolvency Practitioner pursues a claim on behalf of HMRC for recovery of money or assets against the director.
  • Where the potential risk to the Exchequer is addressed through the requirements to provide a financial Security for VAT, environmental taxes, PAYE or NIC.

There is no appeal against inclusion in the MSD programme. This does not affect the customer’s usual rights of appeal against tax and penalty assessments.