Tax avoiders are being shunned for knighthoods and other honours as authorities clamp down on rewarding people with “poor tax behaviour”, it has been revealed.

HM Revenue and Customs has been alerting the Cabinet Office to individuals involved in controversial tax planning schemes, with a memorandum of understanding obtained by the Times saying “poor tax behaviour is not consistent with the award of an honour”.

A document published on the Gov.uk website said HMRC used a traffic light system for the vetting process, assigning a low, medium or high risk rating to prospective nominees in order “to minimise the risk that prospective candidates have behaved in ways likely to bring the system into disrepute”.

Although no celebrities blocked by HMRC from receiving an honour have been named, the document will cause speculation over high-profile figures who have been overlooked.

In June 2017, more than 1,000 people, including celebrities such as Gary Lineker, David Beckham and Wayne Rooney, lost a court battle against a £700m tax bill from HMRC for investing in the Ingenious financing schemes, which funded films such as Avatar and Life of Pi. HMRC successfully argued such schemes were not legitimate investments opportunities but a means of avoiding tax.

Earlier the same year, emails between David Beckham and his spokesman Simon Oliveira about “a red flag” HM Revenue and Customs had put on his nomination for a knighthood due to his involvement in an alleged tax avoidance scheme were leaked. In the messages, Beckham reportedly criticised the honours committee after he was overlooked.

The Liberal Democrat leader, Sir Vince Cable, has thrown his support behind the policy but said some celebrities might be unaware they were involved in “aggressive tax avoidance schemes”. He said: “It seems perfectly reasonable to me that the Inland Revenue should be taking a tough line on abusive tax avoidance.

“I think the public are fed up with abusive tax avoidance by companies and individuals and they want to see something done.”

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The report said medium risk included those whose tax affairs would be “likely to cause adverse comment”, such as “participating in one or more avoidance schemes”.



Red warnings are assigned to those on the HMRC’s Managing Serious Defaulters programme, along with those involved in “offshore evasion”, the report claimed.

The memo is reported to have said: “Trust would likely 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.”

A time limit of three years is said to be in place, meaning candidates can be cleared to receive an honour if they abandon avoidance schemes. Individuals can reportedly be nominated despite the “use of personal service companies” or if their affairs amount to “acceptable tax planning”.

A government spokeswoman said: “Honours are given to reward outstanding service in a given field or area and each nomination is rigorously assessed. 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.”