(accountancy Daily) -- People in the public eye and other prominent figures who are believed to be participants in tax avoidance schemes are being blocked from receiving public honours if they are named on a list maintained by HMRC, according to reports
As a result of a freedom of information request, the Times has uncovered a traffic light system used by HMRC to codify an individual’s suitably for an honour and determine the level of risk in their tax arrangements.
The paper says green indicates a low risk, with amber for medium risk individuals whose tax affairs would be ‘likely to cause adverse comment’ and red for high risk.
It says it has seen a document which stated that ‘poor tax behaviour is not consistent with the award of an honour’, and that trust would be lost ‘if an honour was awarded to someone with negative tax behaviours and those behaviours became linked to the positive recognition that accompanies the award of an honour.’
It claims the list is used by the Cabinet Office honours committee when considering candidates for the twice-yearly honours lists, published for New Years and the Queen’s birthday. Anyone can nominate an individual for consideration.
A government spokeswoman said: ‘As a matter of longstanding policy, in order to protect the integrity of the system, government departments which may have an interest in a particular nomination - including HMRC - are invited to contribute their views during this process.’
Discussing the so-called ‘blacklist’ in a BBC interview, Liberal Democrat leader Sir Vince Cable described it as ‘perfectly reasonable’.
‘The principle is right, I think the public is fed up with abusive tax avoidance by individuals and companies,’ Cable said.