Default Fines by HMRC

[Chris Ashdown]

Quote from local paper in Norfolk, but not clear who pays the penalties

"The latest tax defaulters list shows that a telecommunications company based in Great Yarmouth failed to pay more than £100,000.

Meanwhile, a Norwich construction firm, which has since gone into liquidation, owes almost £90,000.

The government publishes the details of tax defaulters across the UK every few months to “influence behaviour by discouraging non-compliance”.

Construction, whose director is xxx, defaulted on £89,090 worth of tax between March 1, 2017 to May 31, 2017.

The Government publishes the details of tax defaulters across the UK every few months to His business, which is now being wound-up by administrators, was previously registered with his accountants Norwich.

HMRC has imposed a further £57,686 penalty charge against him for the unpaid tax.

The construction firm was placed in creditors voluntary liquidation on July 18, 2017.

Administrators xxx said x Construction had no assets and owed creditors £1.4m.


Meanwhile, HMRC said Great Yarmouth-based telephone company xxx defaulted on £100,000 in tax between November 1, 2011 and April 30, 2017.

The firm, which was based at Gt Yarmouth, provided telephone systems for schools and doctors surgeries.

It was hit with a further £70,008 penalty charge by HMRC.

HMRC said those on the defaulters list have been dealt with using civil proceedings."


Who pays these penalty charges, as i have not heard of them before, does it fall on the defunct companies or are the directors fined

 

[JEREMY HAWKE]

Do your own research on Monday morning Chris as some of these modern local reporter's some how manage to cobble together utter rubbish

While we know the company is liable the press will always mislead the public and report that the directors are liable for the bill

 

[Mr D]

It appears pretty common for businesses to go under owing a lot.
I don't think I've ever seen a report in the press that said 'XXX company ceased trading owing HMRC £150'.
Owing thousands - easily it appears. Owing tens of thousands for those with more than a few staff.
Often the press don't break down the debts - like owing HMRC £96,000 of which £80,000 was owed from last year's corporation tax and debt being paid off over 12 months plus £14,000 VAT and £2,000 wage taxes. Simply reporting that HMRC were owed £96,000.

 

[Chris Ashdown]

Do your own research on Monday morning Chris as some of these modern local reporter's some how manage to cobble together utter rubbish

While we know the company is liable the press will always mislead the public and report that the directors are liable for the bill

https://www.gov.uk/government/publi...ddd/current-list-of-deliberate-tax-defaulters

 

[Jaydee]

The journalist has simply accessed HMRC's "deliberate defaulters" list, which is now in the public domain to help deter businesses from ignoring their tax responsibilities.

There are some eye-watering numbers in the list, including £745k of tax plus £626k of penalties for an Indian restaurant!

https://www.gov.uk/government/publi...ddd/current-list-of-deliberate-tax-defaulters

The biggest one in the March list is £22.9m of arrears in less than two years. The penalty for which is a further £16.4m - which seems pretty pointless to levy on a company that deep into liquidation. That particular company has not filed accounts since 2011 and appears to have been in liquidation since 2013 and so maybe the defaults were spotted by the liquidators.

 

[JEREMY HAWKE]

I don't know an Indian restaurant that turns over those numbers let alone a tax liability

 

[Graham Tyers]

I think the telecoms company must be Business Telecoms that went pop in 2011.

At least it's not a Brexit story.

 

[Mr D]

I think the telecoms company must be Business Telecoms that went pop in 2011.

At least it's not a Brexit story.

Give it time, someone will blame Brexit...

 

[Chris Ashdown]

But my question is who pays the penalty, it seems rather stupid to apply any penalty to a company in liquidation, it is not very clear or am i missing something

 

[Jaydee]

As these are "deliberate defaulters" [so they are not just companies that owe tax, they are companies that have knowingly submitted incorrect figures] then perhaps the directors are on the line (if HMRC can prove that they have acted fraudulently or in breach of directors' duties).

If you look at the liquidator's statement of affairs of the £22.9m company the directors have borrowed over £3m from the company prior to the liquidation - and so presumably that amount at least will be demanded back from them.

 

[Mr D]

But my question is who pays the penalty, it seems rather stupid to apply any penalty to a company in liquidation, it is not very clear or am i missing something

Perhaps simply so HMRC can claim to MPs that £84.6 million has been applied in penalties in 2018/19 tax year for example.
Knowing that most or all is unrecoverable but still needing to point score to keep pressure up to increase their budget.
'If you increase our annual budget by £50 million I'm sure we can double that level of penalties imposed by recruiting more investigators'. Keeping quiet about the other bit.

 

[Mr D]

As these are "deliberate defaulters" [so they are not just companies that owe tax, they are companies that have knowingly submitted incorrect figures] then perhaps the directors are on the line (if HMRC can prove that they have acted fraudulently or in breach of directors' duties).

If you look at the liquidator's statement of affairs of the £22.9m company the directors have borrowed over £3m from the company prior to the liquidation - and so presumably that amount at least will be demanded back from them.

Does not mean its recoverable.
And say a 5 year ban as a director in return for enjoying a share of £3m ….