From HMRC to MBE: how tax compliance shapes who gets honoured

Each year, the King’s Birthday Honours List celebrates individuals who have made exceptional contributions to public life, whether through charitable work, public service, the arts, business, or sport. What many people don’t realise is that before anyone is formally appointed as an MBE, OBE, CBE, or even receives a knighthood, they must pass a rigorous series of checks, one of which focuses squarely on tax compliance.

So, what does the honours system have to do with tax?

A matter of probity

Before an honour is confirmed, candidates undergo a detailed vetting process carried out by HM Government. This includes background checks by various departments and agencies (such as the Cabinet Office, the Home Office, HMRC, and in some cases, the security services). These checks are designed to ensure that anyone receiving a public honour upholds standards of integrity, legality, and good character.

As part of this process, HMRC is asked to review the tax affairs of shortlisted individuals. This is known as a “tax probity check.” The goal is simple: to ensure that honours are not awarded to those who have engaged in tax avoidance, evasion, or other conduct that could bring the system into disrepute.

What does HMRC look for?

Even where there is no criminal wrongdoing, a pattern of aggressive tax behaviour may be enough to cause concern. The honours system aims to reward not only achievement but also integrity. A question mark over someone’s tax affairs may suggest poor judgment or conduct inconsistent with the values the honours represent.

While HMRC does not publicly disclose its precise methodology, the available data suggests that the following issues may raise red flags:

• Undeclared income or offshore interests that have not been properly disclosed or regularised.
• Aggressive tax avoidance schemes.
• Ongoing tax disputes, especially if the individual’s position appears weak or non-compliant.
• Late or non-submission of returns, or patterns of poor compliance.
• Known connections to disqualified directors, tax scheme promoters, or individuals under criminal investigation.

Do past mistakes always count against you?

Not necessarily. There’s no set time limit after which tax behaviour is “wiped clean,” but in practice, the seriousness and resolution of the issue will be taken into consideration.

For example, if a nominee participated in a tax avoidance scheme over a decade ago but has since disclosed the issue, settled with HMRC, and shown strong compliance in the years following, it’s possible that this won’t prevent an honour. HMRC and the Cabinet Office are thought to take a more lenient view where behaviour reflects the norms of the time and where a proactive, remedial approach has been taken.

However, more recent issues such as unresolved enquiries, late returns within the past few years, or participation in a discredited scheme are more likely to present a problem. Even if the person has not acted unlawfully, the perception of poor tax conduct can be enough to undermine the nomination.

There’s also a meaningful distinction between honest mistakes and deliberate or reckless conduct. Inadvertent non-compliance that is swiftly corrected is treated differently from deliberate concealment or knowingly entering into dubious arrangements.

The key question is whether the individual’s tax history could undermine the integrity of the honours system. If the answer is yes, the nomination may quietly stall.

Discretion and disappointment

Most candidates never know they’ve been vetoed for tax reasons. The honours system operates confidentially. If HMRC raises a concern during probity checks, the nomination may simply not progress. A candidate may never be told why they were overlooked.

In some cases, individuals may even withdraw themselves from consideration once they become aware that their tax affairs might be scrutinised. HMRC’s involvement in the honours process sends a clear signal: tax conduct is not just a matter for your accountant—it’s a matter of reputation.

The importance of tax compliance

For professionals and high-net-worth individuals who aspire to public roles, whether through an honour, a board appointment, or charity trusteeship, the message is clear: your tax affairs must be beyond reproach. That means not only compliance in form (e.g. filing on time and paying what’s due) but also substance – choosing structures and advice that you would be proud to defend publicly.

A clean record and evidence of any past issues being responsibly addressed, will go a long way. And where tax planning has become aggressive or outdated, it may be worth taking corrective action now, well before a nomination is even considered.

How we help

At Edwin Coe, we advise clients who are concerned about legacy tax issues, past planning, or current compliance. Whether it’s resolving historic risks, reviewing complex structures, or dealing with HMRC enquiries, we work with individuals and their advisors to ensure that tax affairs are orderly, robust and honour ready.

If you would like to discuss your tax compliance history, please contact Morag Ofili or another member of the Tax team.