Tax professionals in the UK are calling for appropriate safeguards and clear guidelines to make sure corporates that pay the correct amount of tax do not end up on the government's black list of tax dodgers.
The "name and shame" tactic, which was announced in this year's budget, is expected to appear in the Finance Act, due in the next few weeks. Under the new law HM Revenue & Customs will name taxpayers that incur a penalty because they have deliberately understated more than £25,000 ($36,000) of tax.
Commentators are worried that the number of taxes businesses are liable to pay will leave more room for disputes with the tax authorities and a greater chance of companies appearing on the blacklist.
"This could creep up on tax directors," said John Whiting from the CIOT. "It's probably not on the front of their minds but it is something that will go ahead and they need to be aware of it."
Wynne Thomas from London law firm Dawsons said the new legislation could affect major corporates as well as small business owners and individuals. "Corporates have much larger tax bills and the chances of getting figures fully in order are very limited for them," Thomas said. "The Revenue might think companies are deliberately evading tax even if they're not."
Capital allowances are one area of concern. If an organisation buys a new building and has claimed capital allowances but is in dispute with HMRC over the amount due, tax professionals fear companies could end up being blacklisted.
"Guidelines need to be very clear," said Whiting. "They need to focus on deliberate tax evaders."
One tax director hopes Revenue authorities will implement the new regime "cautiously" for large companies. "There is a reputational risk for HMRC if they get this wrong," says Paul Morton, head of tax at Reed Elsevier, a publishing company.
But he is concerned the new measure is another way for the Revenue to embarrass companies particularly following the run of articles on tax avoidance in the Guardian, a British national newspaper, earlier this year. The investigation probed the tax strategies of more than 20 major British companies. "Corporate and social responsibility and company reputation is higher up the agenda now," said Morton.
