There is no doubt that there are many great things about social media. Equally, there is no doubt there are many not so great things. And one of them is its ability to offer a platform for charlatans and chancers. A recent article in our trade press brought this into sharp focus…
A Tik-Tok post showed a smartly dressed man in front of a flipchart. The chart has various diagrams that look somewhat complex. The man tells you that these hieroglyphics offer a clever way to avoid paying inheritance tax. More diagrams and arrows follow and you might be forgiven for thinking this is an intelligent man who really knows his subject. Yet in reality it’s a potentially dubious tax avoidance scheme. HMRC does not like dubious tax avoidance schemes and neither do we at M&S Accountancy and Taxation.
HMRC has spent many years trying to combat artificial tax avoidance schemes. Governments have moved to close the loopholes in the law that are exploited by unscrupulous advisers, who charge large sums while exploiting naivety and people’s (understandable) wish to reduce their tax bill
There is what is known as the ‘tax gap’, which is the difference between what should actually be paid in tax and what HMRC actually gathers in. This is currently estimated at c. £35.8bn in total. Yes, that is £Billion! The good news, is that the element of this tax gap due to avoidance of income tax, NI contributions and CGT has decreased over time and is now, at £0.5bn, less than 1.5% of the total tax gap. But that’s still money that could and should be spent on public services…
It must be stressed that the vast majority of tax advisers do not engage in providing artificial tax avoidance schemes. As members of professional bodies such as the Chartered Institute of Taxation, M&S Accountancy and Taxation is bound by a code of conduct which specifically prohibits the promotion of highly artificial or contrived arrangements.
That said, you might be surprised to find that there is no formal regulation of providing tax advice. In fact, anyone can present themselves as a tax adviser. This is an open door for snake-oil salesmen, of whom, sadly, there are still a few, and many of them have discovered a willing audience on social media. Some of these schemes will claim to have the backing of a barrister. If you see something like this, treat it as a red light: stop, and consult a genuine tax specialist. It may be genuine, but then again, it quite possibly is not…
If you are unsure about any scheme that claims to save you tax and seems too good to be true, do check it out. We are happy to have an initial free consultation with anyone, to understand how we as advisers could help.
Ashley Marshall, Tax Senior, M&S Accountancy and Taxation
