This week's opinion: 3 December 2020

The linking up of HMRC and the Advertising Standards Association (ASA) to produce a joint enforcement notice is a significant development. See also the news item ‘New campaign warns about avoidance schemes’.

We have, of course, seen the ASA publish decisions in respect of individual tax schemes before but this is the first time we have seen a concerted attempt to control the way that tax schemes are marketed. The controversy over the loan charge has shown us that, whereas tax avoidance schemes were once only for the rich and well advised, their main impact now is on those we might call, without intending any discrepancy, ordinary taxpayers. Indeed the statistics published by HMRC at the same time as this joint notice (tinyurl.com/hmrcanavms) show much of the avoidance activity is now concentrated on low and middle income earners. 

Whether any of this will have any effect remains to be seen. One might have thought that all of the publicity over avoidance in recent years would have put people off, but I think there is a feeling among a small but not insignificant part of the population that ‘if the big boys can get away with it why shouldn’t I have a go.’ The difference is, though, that the ‘big boys’ – by and large – know what they are getting themselves into, whereas this lower-income group probably does not.

So, perhaps making it more difficult for promoters to sell what must now be seen as incredibly risky schemes, is the right approach. Time will tell.