HMRC have recently published a number of pieces of research into taxpayer attitudes and opinions. Among these are two pieces on tax avoidance – ‘Exploring public attitudes to tax avoidance’, which examines public opinion on the prevalence and acceptability of tax avoidance and what HMRC is doing in response; and ‘Understanding individuals’ decisions to enter and exit marketed tax avoidance schemes’ which included interviews with several people who had engaged in tax avoidance to understand why they had done so.
The research asked members of the public their thoughts on tax avoidance, with most responding that they thought that tax avoidance was common, but unacceptable. They also had varying views as to whether they thought HMRC was doing enough against tax avoidance. Interestingly, some of the survey respondents suggested that those engaged in tax avoidance could face prison sentences or criminal records, which would suggest that public awareness of the difference between tax avoidance and tax evasion is limited.
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The research examines why people enter into, remain in, and exit tax avoidance schemes, and includes interviews with a number of previous users of such schemes. It concludes that these users fell into three categories – those who were unaware they were engaging in avoidance, those who were aware that the schemes they were using were ‘on the edge of law’, and those who were aware they were engaging in avoidance and believed it to be acceptable. It also highlights that users were often reassured by their trust in the promoters of such schemes, the language the promoters used to describe the schemes, and the social acceptance of tax avoidance at the time they entered into the schemes (from 2003 to 2013). For those who knew the schemes were ‘risky’, they perceived that the consequences of an HMRC challenge did not outweigh the benefits.
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