TaxPersonal TaxHMRC turns to psychologists to inspire guilt in taxpayers

HMRC turns to psychologists to inspire guilt in taxpayers

Psychologists help HMRC draft letters to taxpayers in arrears to drive up yield

HMRC turns to psychologists to inspire guilt in taxpayers

THE WORDING of thousands of letters from HM Revenue & Customs to tardy taxpayers has been “subtly altered” with the aid of psychologists to inspire guilt, according to chief secretary to the Treasury Danny Alexander.

The letters include statements highlighting how the “great majority” of people pay their taxes on time while also setting out the importance of taxes in funding public services, the Telegraph reports Alexander revealed at the Liberal Democrats’ part conference.

A similar “nudge” method is being used to encourage potential tax evaders to clarify their tax position and pay up any outstanding liabilities. Those who fail to respond will be the subject of a full-scale inquiry.

Following a trial with more than 100,000 people, HMRC said it had “pinpointed the exact words and concepts” which trigger people to pay, leading to an estimated £210m of additional income to the public purse each year.

Phrases such as “nine out of ten people in the UK pay their tax on time”, or “most people with a debt like yours have now paid it” have been added to the letters. Often, local comparisons were used to encourage people to pay up.

Mentioning public services in letters also increased payments, especially for those with large debts. People with debts of £3,000 were found to be 20% more likely to respond to letters which mentioned public services than those which did not.

Speaking at the Liberal Democrat party conference, Alexander said: “We are using psychologists and behavioural economists in HMRC to get the money quickly.

“Tax dodgers beware – we know where you live, we know how much you owe, and now we know how you think. Your behaviour is unacceptable, and we are coming for our money.”

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