Tag Archives: Behavioural Insights

For HM Government, are well all like Pavlov’s dogs?

War is peace

Last month, a horridly biased propaganda piece published in the Economist  made many alarm bells go off for those familiar with mental manipulation techniques – to the point that some readers questioned whether the infamous “nudge unit” could have helped pen the piece.
Would we put it past HMRC to now plant articles in reputable publications? Certainly we wouldn’t.

One commenter well versed in Behavioural Psychology offered interesting insights into the methods used and the aims behind them.

 “Some of the presuppositions in the language lead me to wonder if it could actually have been written, in full or in part, by a former department of the Treasury known as the Behavioural Insight Team.

To let you understand, the Behavioural Insights Team used to be a department of the Treasury but have now been hived off as a private company part owned by individuals and part by the Government. They use Behavioural Psychology to influence your decisions. One of their stated objectives is enabling people to “make better choices for themselves”. Oh really! Rather Orwellian I feel, but then behavioural psychologists do believe that we are just animals that can be manipulated, remember Pavlov’s dogs? Interestingly it would seem that Behavioural Psychologists must presumably believe that everyone just operates on animal instinct…except them. You can check out their website or indeed find them on Twitter. Their aim is to influence your behaviour and it would appear to be highly lucrative for them. Indeed in their first year of trading they managed to amass a Turnover of £4.8million and made a profit of £1.8 million. Their customers primarily being you and me, the taxpayer, in the guise of other government departments. I don’t know who will benefit from that profit but I do know that they are part owned by an EBT (Employee Benefit Trust). You really couldn’t make this up!

I digress. Back to the article.

It starts with the heading which pre-sets the expectations by referring to ‘dodgy’ tax structures.
The opening sentence states a bare faced lie (that tax avoidance isn’t legal) and makes no apologies or no attempt to water it down, so if you accept the source as being knowledgeable or authoritative, then there is a chance that you accept the opening, shamefully false, statement and if you read on without questioning that….then the scene has been set.

The first paragraph explains who is going to be the target of the article/attack and even gives them a derogatory name in quotes so that we can be relieved that it is not us who is the target, we can sneer at the “pinstriped mafia” who are the target and we are effectively given permission to dislike them and see them as the enemy, and of course putting this in quotes actually gives it authority as in “experts say”…, but then because it is in quotes, you can’t pin it on me because I didn’t say it.

The third paragraph implies that those who design, market or facilitate the use of tax avoidance arrangements could be fined a sum equal to 100% of the tax, but as Dr Bartolo has already very eloquently pointed out in the comments section, tax avoidance is perfectly legal (and any attempt at quantifying it is purely a wish list of HMRC). Surely you can’t fine someone for acting within the law. Quite so, but the paragraph reads as if it will be the case that anyone in the vicinity of the tax structure will be fined, legal or not.

This is an attempt by the Government to influence behaviour rather than run the risk of challenging these tax avoidance promotions in court and face the possibility of losing.

In this case they are trying to frighten the Accountants and similar professionals away from this area of tax avoidance. It’s all about collecting more cash. What I object to is the fact that they are trying to do it covertly by using NLP type language structures designed to influence behaviour and it’s hidden within their publications. The Behavioural Insights team are proud to call themselves the ‘nudge’ unit. They are trying to nudge you in the direction of the behaviour they want to see you take, even if that means you pay more tax than is legally due. They think they are smarter than you. It is no coincidence that HMRC recently changed its stated aims from collecting the right amount of tax, to ‘maximising revenues’”.

Other comments all also worth a read (notably those of Dr. Bartolo)


Reflections on “contractors schemes” and HMRC as “Judge, Jury, Executioner”


From gordo at  AccountingWeb (part of this discussion thread)

Understandably there is emotion on both sides.

We can’t blame the Accountants on here for standing their grounds. Many have very clearly said on a number of occasions that they would never have recommended such schemes and that they view them as highly abusive.

So if we don’t want the Accountants to label all Contractors the same then let’s not label all Accountants the same.

By the same token it is clear that some Contractors probably did get involved in order to minimise their tax liability. However others were potentially misguided, or mislead, but often they took advice from what they believed was a reliable source and they fully disclosed the matter on their Tax Returns (under advice from Accountant to prevent Discovery). So full Disclosure to HMRC who already had the schemes registered some years before and who got an Employers Annual Return every year with a list of employees.

We can’t blame all QC’s either. We don’t know what their remit was and besides it appears to me that what was advised did work as the law stood at that time. Let’s not forget that. Can’t sue somebody because HMRC introduce legislation that retrospectively impacts upon the planning done (assuming such caveats were given and if it’s a QC then you can bet they were).

What about the Promoters? Were they all a bunch of rogues? Well I can’t be sure of all and there are certainly some that I have researched on the internet that appear to be able to decide in 5 minutes whether it was the right strategy for your circumstance and who offer 90% return or more, so some may be rogues. However I can categorically say in my own experience that the ones I spoke to were definitely not rogues. Indeed, they were very specific on the warnings on risk and their analysis was impressive. The risk warnings came before the analysis and they also included all the risks of the alternatives, such as IR35.

Again, we cannot be certain which providers were careful with their warnings and which were not. So we can’t label all providers together. Neither can we be certain who understood the warnings, who ignored the warnings and who didn’t receive any warning. Certainly, I fully understood the warnings because as an Accountant myself, I understood (most of) the tax issues.

So the only thing I can think to do: legislate from this day forward to stop any new loans and litigate those historical schemes that HMRC see as abusive. (This is not what HMRC have done. Why?)

The case I posted overnight, which came from accountingweb, on company car tax, demonstrates that HMRC will use substance over form when it suits their purposes then ignore it and argue for a strict interpretation of the law when that suits their purposes. It also demonstrates HMRC will pursue tax in cases where there is patently no income and no benefit. HMRC didn’t just try it on, they actually took it all the way to the Court of Appeal. Who sanctioned that use of taxpayers money!

Behavioural Psychologists. Behavioural psychology has its roots in conditioning. Remember Pavlov’s dogs? The Behavioural Insights team’s strap line on Twitter
is ” ..to encourage people to make better choices for themselves….Known as worlds first nudge unit. “, how insidious, better for whom and are the people aware of how they are being “encouraged” and for what purpose? Are we being conditioned, like Pavlov’s dogs, to accept Big Brother?
Can anybody tell me the definition of nudge?

There may well be a wide variation in the motives and the experiences of Contractors. I cannot be certain. I am pretty sure of what HMRC are up to, but again I cannot be absolutely 100% certain. I am broadly aware of HMRC resiling from agreements reached years ago, it would appear to be so that they can delay the day in Court (perhaps forever) and issue APN’s (Accelerated Payment Notice) demanding an Advance Payment that the Government then record as Income.

So I conclude that HMRC cannot be trusted to be judge, jury and executioner. Let’s us see this in Court and let the learned Judge(s) decide”