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Lee Sharpe considers HM Revenue & Customs' current strategy for campaigns.

Introduction

HM Revenue & Customs picked a bad week to launch their new VAT Amnesty - sorry - Campaign. Given the stories in the general press this week, (what remains of it), people might be forgiven for not noticing that there is a new Initiative to encourage businesses to register for VAT, where applicable.

HMRC has plumped for (what would usually be) attention-grabbing headlines, such as 'A Crackdown on VAT Cheats', which arguably belies the tone of the Campaign itself. The guidance is more polite, and seems to acknowledge that people may simply have been unaware that they were trading at levels where VAT was in point.

We have gone into more detail on the latest Campaign in HMRC Targeted Campaigns Move On to VAT

More to Come

But there are three more Campaigns on the horizon, and we understand there will be more to come.

Some Campaigns, such as the Plumbers' Tax Safe Plan, were narrowly focused whilst others, such as the one planned later this year for those with a second income through private tuition or coaching, could affect a much broader cross-section of taxpayers. And next year there's a Campaign for people who buy and sell on eBay and similar 'e-marketplaces'. There will be cases of 'overlap' because some Campaigns target specific trades, whilst others target broader types of 'activity'.

Problems Ahead?

As more Campaigns are launched, two problems will become more significant:

1. More taxpayers are going to fall foul of the current rule that says if they could have made a disclosure under a previous Campaign, they won't benefit from the favourable terms of a current Campaign.
2. People are going to lose interest in these tax Campaigns - they will get 'Campaign Fatigue'. Colourful headlines may only serve to accelerate that downward trend. Once it becomes hard to keep track of these campaigns, then taxpayers - and some agents! - may lose interest.

For the first point, in those cases where a taxpayer genuinely didn't know about a previous Campaign that applied to them, then we really do hope that they won't be penalised if they want to make a disclosure in a later Campaign.

HMRC has perhaps 'cottoned on' to the potential difficulty in keeping track of the various Campaigns and has set up an HMRC Website to Monitor Tax Campaigns.

Destination

So, when/where will they end? Well, the obvious answer is when they are no longer cost-effective: when the tax yield from a proposed new Campaign is too small to justify. It may just be that the above two problems bring about that tipping point sooner rather than later - either because people become wary of being punished because they could have used an earlier Campaign, or because they just become disinterested, and new Campaigns come and go un-noticed.

It's important to stress that TaxationWeb supports these Campaigns - we put no little effort into bringing them to the attention of the taxpaying public and their agents. We are continually engaging with HMRC as well - for instance, we are trying to get HMRC to clarify the position for people who don't want to wait for the 'official launch' of a Campaign but want to engage now.

But we do think HMRC could help themselves and taxpayers: e.g., HMRC has know for years that buying and selling items on eBay, etc., could "catch people out" - in fact, they set up a specific section on their website called A Guide for People who Sell Items Online, Through Classified Advertisements and at Car Boot Sales

Given that they're publicising a future Campaign in this area, can they find the time to update the figures, thresholds, etc., in that section from 2006/07..? Blow the dust off it, so to speak? (Why wasn't it kept up to date in the first place?) Perhaps this part of their website will get some TLC before the Campaign is launched next year...