Take note: HMRC 'nudge' tactics now include sticking handwritten Post-Its on correspondence

Another controversial step by HMRC to pressure taxpayers into settlement
HMRC does not record these additional communications with taxpayers

HMRC's latest nudge tactic is to stick handwritten Post-Its on correspondence with taxpayers in an attempt to unnerve and pressurise them into paying disputed sums, says City-headquartered law firm RPC.

RPC have seen at least 200 such notes attached to letters issued to taxpayers – which suggests that it is likely that the practice has become widespread.

The content of the Post-Its typically consist of a personal note written and signed by an HMRC officer urging the recipient taxpayer to call them directly to discuss settlement of the case.

RPC says that these Post-Its are the latest ‘nudge tactic’ devised by behavioural psychologists and that there is no justification for HMRC adopting such a practice.

Adam Craggs, Partner and Head of Tax Disputes at RPC, says: “This is yet another controversial step by HMRC to pressurise innocent taxpayers to abandon their legitimate dispute with HMRC and pay additional tax demanded by HMRC – and there are serious governance concerns in relation to this latest strategy.”

“HMRC has confirmed that it does not record the content of these Post-Its and is therefore failing in its duty to keep a full and accurate record of all its communication with taxpayers.

“Encouraging staff to send unrecorded manuscript communications to taxpayers is not a practice which should be condoned by senior management within HMRC.”

“As a consequence of failing to keep a record of these notes, a dispute may arise in later litigation as to what precisely HMRC has said to a taxpayer. It is good practice for any government department to keep a full and accurate record of all communications it has with the public.”

“Another concern, especially at a time when HMRC is reducing numbers, is the inefficient use of scare resources by HMRC. Writing hundreds – and in all likelihood thousands – of Post-Its is a waste of time and public money.”

“If HMRC is confident in its technical position it should be prepared to engage in meaningful dialogue with taxpayers and their advisers and not resort to tactics designed by behavioural psychologists which are intended to 'nudge' citizens to conform and accept HMRC's position.”

HMRC ‘nudge unit’ is developing new tactics

The ‘nudge’ unit, or Behavioural Insights Team, was originally set up as a central Whitehall function by the Coalition Government in 2010 in order to alter the way people act.

RPC says that the increasing trend of sending ‘nudge’ letters directly to taxpayers who are in dispute with HMRC with the aim of persuading taxpayers to accept HMRC's interpretation of the law and thereby avoid the normal dispute resolution process, is of concern to many professional advisers.