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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Publishing details of deliberate defaulter (PDDD): informing people about PDDD

Follow the guidance below according to the circumstances that apply to your compliance check.

At the start of every compliance check
Cases where an evidence based reason to believe that there is a deliberate inaccuracy, failure or wrongdoing with a PLR of over £25,000 has been identified before the start of the compliance check
Checks into the correctness of an unprompted disclosure of a deliberate inaccuracy, failure or wrongdoing
Where a person makes a prompted disclosure of a deliberate inaccuracy, failure or wrongdoing at the start of a compliance check
Where a person makes a prompted disclosure during the course of a compliance check
At the end of a compliance check that results in a relevant penalty

At the start of every compliance check

The appropriate general information factsheet CC/FS1 (a, b, c or d) (GOV.UK) includes a paragraph about PDDD.

The factsheet is issued at the start of every compliance check. It gives every person to whom PDDD could apply a clear opportunity to disclose any deliberate defaults at that time and so avoid publication of their details. You must ask the person to read the factsheet and check that they have read and understood it.

If you are asked for further information about PDDD at any stage during a compliance check, give the person factsheet CC/FS13 (GOV.UK) Publishing details of deliberate defaulters.

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Cases where an evidence based reason to believe that there is a deliberate inaccuracy, failure or wrongdoing with a PLR of over £25,000 has been identified before the start of the compliance check

In cases where an evidence based reason to believe that there is a deliberate inaccuracy, failure to wrongdoing with a PLR of over £25,000 in periods to which PDDD applies, see CH190200, has been identified before the start of a compliance check, you must give the person factsheet CC/FS13 (GOV.UK) Publishing details of deliberate defaulters at the start of the compliance check, along with factsheet CC/FS9 (GOV.UK) The Human Rights Act and penalties, see CH300000, and the relevant factsheet about penalties, see CH202000.

Explain to them that if they incur relevant penalties exceeding £25,000 PLR, their details are likely to be published unless they immediately tell you everything about what is wrong, give you access to their records and actively help you to establish the amount of unpaid tax.

If they fail to make a full disclosure at that time, they will not be eligible for a full reduction for disclosure and may have their details published.

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Checks into the correctness of an unprompted disclosure of a deliberate inaccuracy, failure or wrongdoing

If you are checking an unprompted disclosure that does, or could, exceed £25,000 PLR in periods to which PDDD applies, see CH190200, you must give the person factsheet CC/FS13 (GOV.UK) Publishing details of deliberate defaulters along with factsheet CC/FS9 (GOV.UK) The Human Rights Act and penalties and the relevant factsheet about penalties, see CH202000, at the start of the check.

Explain to them that in order to avoid publication of their details in relation to any relevant penalties, they must tell you everything about what is wrong, give you access to their records and actively help you to check the amount of unpaid tax. Ask them if they wish to consider if their disclosure is a full disclosure before you take your check any further.

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Where a person makes a prompted disclosure of a deliberate inaccuracy, failure or wrongdoing at the start of a compliance check

If a person makes a disclosure that does, or could, exceed £25,000 PLR in periods to which PDDD applies; see CH190200 at the start of a compliance check you should

  • consider whether the case needs to be referred to the Evasion Referral Team, see CH402150 and, if it does, do not enter into a discussion about penalties or PDDD, or
  • when you are sure that the case is to be treated civilly, give them factsheet CC/FS13 (GOV.UK) Publishing details of deliberate defaulters, along with factsheet CC/FS9 (GOV.UK) The Human Rights Act and penalties and the relevant factsheet about penalties, see CH202000.

Explain to them that in order to avoid publication of their details in relation to any relevant penalties, they must tell you everything about what is wrong, give you access to their records and actively help you to establish the amount of unpaid tax. Ask them if they wish to consider if their disclosure is a full disclosure before you take your check further.

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Where a person makes a prompted disclosure during the course of a compliance check

If a person makes a prompted disclosure of a deliberate inaccuracy, failure or wrongdoing during the course of a compliance check and asks about getting a penalty reduction and/or avoiding publication of their details, you should

  • consider whether the case needs to be referred to the Evasion Referral Team see CH402150, and, if it does, do not enter into a discussion about penalties or PDDD, or
  • when you are sure that the case is to be treated civilly, give them factsheet CC/FS13 (GOV.UK) and explain that they have left it too late to earn a full reduction for disclosure. Remind them that they were given this information at the start of the check when they were given the general information factsheet CC/FS1 (a, b c or d) (GOV.UK).

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At the end of a compliance check that results in a relevant penalty

Where you have established that a relevant penalty is payable and had it authorised, see CH407000, and the answer to all the publication questions is ‘yes’, see CH190600, you should explain the following:

  • How you have arrived at the PLR and the type and amount of the penalty for each default. As part of this process you will discuss the evidence that has led you to the conclusion that they have incurred penalties for deliberate default.
  • If the person does not agree with your conclusions they may appeal to the independent tax tribunal against the tax and/or penalty decisions.
  • Whilst there is a right of appeal against the amount of tax and the type and amount of penalty, there is no right of appeal against a decision to publish their details. If HMRC decides to publish (see Managing Serious Defaulters Programme (MSD) actions at CH500700), the person’s only recourse is judicial review, see ARTG12000.
  • What happens next

    • You will settle your compliance check in the normal way. For most taxes and duties this will be by assessment, whether or not the person agrees with your conclusions. For some taxes this may be by contract settlement if the person agrees with your conclusions about the tax and penalties or by assessment if they do not.
    • Once the penalties are final you will refer the case to the Managing Serious Defaulters Programme (MSD). A specialist team in MSD is responsible for the publication process. This safeguard is outside the compliance process and not part of your remit.
    • MSD will write to the person, inviting them to explain why we should not publish their details. An officer of Grade SCS1 or above is responsible for deciding whether or not we publish. That officer will consider carefully any reasons the person gives before making their decision. MSD will then inform the person about the final decision.