‘Persuasive promoters’ lure Britons into tax avoidance schemes, says HMRC

A recent report unveiled by HMRC has revealed that British taxpayers are being introduced to avoidance arrangements via ‘persuasive promoters’ – typically in the form of friends, family and ‘unusual’ scheme sellers.

The study questioned 20 former tax avoiders, exploring 15 different tax avoidance schemes documented in Britain between 2003 and 2013.

HMRC probed the reasons why people decided to enter and exit these schemes, discovering that, in most cases, Britons were fully aware that schemes they were coaxed into were ‘at the edge of tax law’ and highly ‘unusual’.

In most cases, it was revealed that participants were persuaded into the schemes by the persuasive language of so-called ‘introducers’, whom were found to fall into four categories – friends, family and ‘unusual’ promoters whose services appeared to be ‘at the edge of tax law”.

Introducers would firstly present a logical argument to the individual to make the scheme appear tax efficient, beneficial and a legal form of avoiding tax.

Some promoters would then go as far as using credible sales approaches like formal presentations and focus groups to make these schemes seem more legitimate.

The successes of previous schemes would be highlighted to make them seem more appealing to taxpayers.

Taxpayers argued that this “helped them to justify their decisions to invest in a tax avoidance scheme, which was viewed as a legitimate option compared to tax evasion”.

Many were completely unaware that they were breaking the law, but HMRC insist they will soon be implementing “stronger consequences” for users of tax avoidance schemes, and cracking down on so-called promoters.