The PDDD enables HMRC to publish the names of taxpayers penalised under civil procedures for deliberately defaulting on certain tax obligations (with a value of £25,000 and over). It has been publishing names on a quarterly basis since 2013. In a survey by Quadrangle Research, eight in-depth interviews were conducted with individuals and businesses who have been named under the PDDD programme, 10 mini focus groups were conducted with individuals and businesses that have the potential to have their details published if they deliberately default and a face-to-face survey of 1,913 members of the general public was undertaken.

Overall, the research found no strong evidence that PDDD is an effective deterrent to defaulting on tax obligations, either for businesses and individuals that submit their own tax returns and therefore have the potential to deliberately default, or for those that have actually defaulted in the recent past.
In comparison to interventions and potential fines, it was felt to have considerably less tangible impact.
Among the general public, awareness of PDDD was relatively low, with only just over a quarter (28%) aware of the policy.
For those who had been named, the greatest impact on their lives and businesses was reported to be the process of the intervention and the subsequent financial penalties. Some of the defaulters were not actually aware that their details had been published.
Of those that were aware of publication, some were angry or felt residual shame about having had their details published. But overall, defaulters found it very difficult to disentangle the effect of publication from the intervention itself and other consequences (mainly financial penalties).

Due to a very limited awareness of publication, PDDD was not seen as an effective deterrent against defaulting on tax obligations. The researchers pointed out that this must also be seen in the context that nobody appeared to be expecting to default at any point in the future, and therefore did not see it as relevant to them.
In terms of perceived impact, it was not expected to have any adverse effect on individuals. Some felt it may affect the willingness of people to deal with businesses whose details have been published, if the list and its purpose was more widely publicised.
Amongst those polled from the general public, publication was the least well-known consequence of an intervention that HMRC has in tackling tax evasion, with fewer than one in three (28%) aware of it, compared to 70% being aware of fines/penalties.

While 59% of members of the public felt that publication could be either moderately or very effective at preventing people from defaulting, and 57% felt it could be moderately or very effective at preventing those that have already done so from doing so again, less than half (43%) claimed they may avoid using businesses that have had their details published, and only 13% said they would stop socialising with somebody that had had their details published.
There were concerns arising from the defaulter audience where some felt strongly that they had not ‘purposefully’ or ‘deliberately’ defaulted. Some feel that as they had not actively intended to default, they should not be included in the list of ‘deliberate’ defaulters. In these cases, defaulters had a difference of opinion to HMRC with regards to how the inaccuracy, failure, omission or wrongdoing arose and whether it was deliberate.

When it came to improving the performance of PDDD, respondents suggested that giving the PDDD list greater publicity and giving it some form of tangible utility could help it to be a more powerful deterrent. One example given was to develop it as a way to check the suitability of clients and suppliers as organisations to do business with (in the manner of a credit check). Other suggestions included making the list more visible by publishing details in, for example, local newspapers or trade publications.
 

Evaluating the effectiveness of publishing details of deliberate defaulters is here

Reported by Pat Sweet