Tax avoiders blocked from honours list, secret government memo reveals

Celebrities who have 'behaved in ways likely to bring the system into disrepute' shunned

In 2014, MPs called for Gary Barlow to be stripped of his OBE (Getty)

Tax avoiders are to be blocked from receiving knighthoods and other honours as authorities clamp down on rewarding “poor” financial behaviour.

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

A government statement said the vetting process sees HMRC assign a low, medium, or high risk rating to prospective nominees “to minimise the risk that prospective candidates have behaved in ways likely to bring the system into disrepute”.

The newspaper said medium risk includes 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 have abandoned avoidance schemes.

Individuals can be nominated despite the “use of personal service companies” or if their affairs amount to “acceptable tax planning”, it is reported.

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.”

In 2014, MPs called for Gary Barlow to be stripped of his OBE after the Take That singer reportedly invested millions into what a judge described as a tax avoidance scheme. But David Cameron, prime minister at the time, rejected the proposal, saying Barlow has “done a huge amount for the country”.