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HMRC have published a research report, ‘Understanding avoidance scheme users’ decision making, customer experience and future compliance intentions when settling their enquiry with HMRC’. 

The research considers why people use tax avoidance schemes, how they find the settlement process, and how it shapes their attitude towards tax avoidance.

The participants in the research gave varied reasons for taking part including benefitting others, reflection and  'closure' on a difficult process and wanting HMRC to hear their story.

Why do people use tax avoidance schemes?

The 20 people surveyed gave the following reasons for participating in avoidance schemes:

What was their experience of the settlement process?

The research categorised scheme users into three categories based on their understanding of and attitudes towards, the scheme, with each having a different experience and approach to settlement.

Why did people settle?

How did they find the process?

HMRC conclusions

HMRC aims to use the findings to improve the settlement process and reduce the number of people using tax avoidance schemes and in doing so cut down the number of lengthy tribunal cases. It would do so by:

Comment

The number of people surveyed (20) appears low compared to the number of scheme users who have settled their schemes, with over 8,000 for disguised remuneration schemes alone by late 2019. It seems a low response rate was expected and is perhaps indicative of a reluctance from some scheme users to engage with HMRC on any level.

Links to our subscriber guides

Disguised remuneration loan charge
What is disguised remuneration? What is the loan charge? When does the loan charge apply? Will the loan charge affect me?

FAQs for Disguised Remuneration Settlements
The terms of each individual scheme are different and therefore the following is intended as general guidance only.

Making a tax disclosure (Digital Disclosure Service)
A practical guide to making a tax disclosure using HMRC's online system.

When a tax inspector calls  
This section has a series of articles that look at policy on tax strategies/avoidance and tax investigation news, including serious fraud and disclosure facilities.

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Understanding avoidance scheme users’ decision making, customer experience and future compliance intentions when settling their enquiry with HMRC