HM Revenue and Customs (HMRC) and the Advertising Standards Authority (ASA) have launched action to cut out misleading marketing by promoters of tax avoidance schemes.
The joint enforcement notice aims to disrupt the activity of promoters and protect people from being presented with misleading adverts which may tempt them into tax avoidance.
It requires promoters to be clear about the potential consequences of tax avoidance in any online adverts.
Immediate sanctions include having their paid advertising removed from search engines and follow-up compliance action, which can include referral to Trading Standards.
The ‘Tax avoidance: don’t get caught out’ campaign will warn and educate contractors about how to identify if they are being offered a tax avoidance scheme, and the pitfalls of using these schemes.
Jesse Norman MP, the financial secretary to the Treasury, said: “The government has made clear its determination to clampdown on the promoters of tax avoidance schemes.
“Today HMRC and the ASA are taking an important further step in this direction by action against misleading advertisements by promoters. As always, we would encourage people to pay close attention to HMRC’s warnings not to enter tax avoidance schemes. If it looks too good to be true, it almost certainly is.”
Jim Harra, chief executive and first permanent secretary of HMRC, said: “We’re doing our part to close down these schemes and make it difficult for promoters, but we need the public to play their part too.
“You really don’t need to be a tax expert to spot an avoidance scheme – anything that sounds too good to be true almost certainly is, and anything which claims you can take home, say, 90% of your pay, or asks you to sign up to loans from an offshore trust just so you can be paid, is something to steer clear of.”
Miles Lockwood, director of complaints and investigations at ASA, said: “This notice serves as a clear warning to promoters of tax avoidance schemes – get your houses in order and ensure your ads comply with the law and our advertising rules, or face enforcement action.
“There can be a real consumer detriment for those who unwittingly following bogus tax avoidance advice – you could find yourself facing a significant tax bill. Working with bodies such as HMRC is helping us to better protect consumers from misleading and unfair advertising that can leave them out of pocket.”
The ‘Tax avoidance: don’t get caught out’ campaign is asking the public to:
• stop – don’t sign anything that you are uncomfortable with or don’t understand;
• challenge – check for warning signs. If you’re unsure, seek independent professional advice;
• protect – if you think you have been offered a tax avoidance scheme, report it to HMRC.
The campaign launch comes as HMRC publishes its Use of marketed tax avoidance schemes in the UK report.
In 2019 and 2020, HMRC issued 11 spotlight warnings on different tax avoidance schemes being offered to people.
Around 20 promoters have moved out of promoting altogether in the last six years because of HMRC’s crackdown.