HMRC and the Advertising Standards Authority (ASA) have launched a joint initiative to control the use of misleading advertising which may tempt individuals into using a tax avoidance scheme. Keep reading to find out more.
What is the joint enforcement notice?
The joint enforcement notice aims to eliminate the misleading advertising presented to individuals by promoters of tax avoidance schemes. The enforcement notice requires promoters to clearly state the risks involved for anyone considering engaging with a tax avoidance scheme such as the financial penalties and an HMRC investigation. The notice applies to online advertisements and websites promoting tax avoidance and are likely to be challenged by HMRC – if they haven’t already.
Jesse Norman MP, the Financial Secretary to the Treasury, said:
“The government has made clear its determination to clamp down 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.”
Promoters who fail to heed the new guidance will have all paid advertisement promoting avoidance schemes removed from search engines. They will also be subject to a follow-up compliance action, resulting in a referral to a Trading Standards officer.
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 are 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.”
Marketed tax avoidance schemes
The joint enforcement notice is part of various new measures HMRC is taking to tackle tax avoidance in the UK. Other recent efforts also focus on imposing tighter restrictions on marketing materials used by promoters of tax avoidance schemes by working closely with industry bodies, disrupt the market by reducing the demand for the schemes and educate contractors about the implications of engaging with them.
For more information about the current state of the avoidance market and the stops HMRC are taking to crack down on tax avoidance, please refer to HMRC’s recent report.
HMRC launches a new tax avoidance awareness campaign
As part of the measures introduced to crack down on the tax avoidance market, HMRC has launched its “Tax avoidance: don’t get caught out” awareness campaign. The new campaign aims to educate contractors about the tell-tale signs of a tax avoidance scheme to distinguish the illegitimate from the legitimate providers and only use compliant and trustworthy companies. The campaign also highlights the devastating effects using a tax avoidance scheme can have on an individual. The campaign features real-life stories from Tanya and Duncan, whose lives have been turned upside down from engaging with a tax avoidance scheme.
The campaign urges people to look out for the warning signs and follow these three points:
Stop and take your time
Do not sign anything you don’t understand. Make sure you know exactly how it works and don’t be afraid to ask questions.
Challenge what you are being told
Always check for the warning signs of a tax avoidance scheme. If you are unsure, seek an independent, professional’s advice.
Protect yourself and others
If you think you are being offered a tax avoidance scheme, report it to HMRC immediately. If you think you may be using one and need help getting out, contact them, and they will provide further guidance.
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.
That’s why we’re starting a big push to encourage taxpayers to steer clear of tax avoidance schemes. This is part of HMRC’s wider work to make it much harder for promoters to operate.”
Always look for the FCSA accreditation to ensure you pay is processed correctly
An easy way to ensure you are only using a reputable and compliant umbrella company is to look for the FCSA accreditation. The FCSA conduct thorough due diligence on every company accredited by them and ensure that the umbrella company is adhering to UK tax law and HMRC legislation, as well as the FCSA’s strict code of compliance.
Umbrella Company UK is proud to be accredited by FCSA, and we have a range of umbrella PAYE services to support you throughout your time as a contractor. If you are interested in finding out more about our services, please give our expert team a call on 01707 669023 or request a callback for a time that suits you. Alternatively, if you’re interested in requesting a free, tailored take home pay calculation, please click here.