Advertising tax arrangement schemes

All ads must comply with the law and not incite anyone to break it.  With this is mind, illegal tax avoidance schemes cannot be advertised.  Tax arrangement schemes that comply with the law can be advertised, provided those ads comply with the CAP Code.

Following a number of Advertising Standards Authority (ASA) rulings, the Committee of Advertising Practice (CAP) Compliance team, in collaboration with HMRC, is issuing an Enforcement Notice to companies irresponsibly advertising tax arrangement schemes in a bid to clamp down on those breaking the rules.

Our previous article was designed to provide insight into those rulings and some of the issues raised. Here are the key points and rules from the Enforcement Notice and previous rulings.

Only advertise products or services which comply with the law

Under CAP Code rule 1.1, advertisers are required to ensure that their marketing communications are legal, comply with the law and do not incite anyone to break it.  As such, ads for any arrangements or schemes which are illegal will break the ad rules as well as the law.

Don’t imply a scheme is officially endorsed or approved unless it is

Claims or images which state or imply a scheme is either endorsed or approved by HMRC, or other official organisation, will break the rules unless supported by evidence demonstrating that this is the case (rule 3.50).

The use of official logos, or similar, are also likely to imply official endorsement, so marketers are strongly advised against using any logos or other imagery likely to imply that a scheme or marketer is affiliated with, or endorsed by, the relevant organisation, unless this is the case (CDP Tax and Wealth Ltd, 21 March 2018).  See our guidance on official endorsements for more information.

Don’t mislead by omitting material information

As with all ads, those for tax arrangement schemes must not mislead by omitting material information about the product or service being advertised (rule 3.3).

Ads for an Income Trust scheme were ruled misleading by the ASA because they omitted information about the implications or risks of entering into the scheme.  This included information about the arrangement being a disguised remuneration scheme, there being a potential loan charge and potential charge or penalty in relation to the General Anti Abuse rule (Knight Wolffe Ltd, 13 September 2017). 

Hold evidence and don’t mislead about the nature of the arrangement

As always, marketers should ensure they hold supporting evidence before making any objective claims, to ensure their claims don’t mislead (rule 3.7).

Don’t mislead about what is required of users of such arrangements

As well as ensuring ads don’t omit information likely to mislead, marketers should ensure their ads don’t include any claims likely to mislead, including in relation to the obligations on arrangement users as well as the scheme itself.

Advertising a similar scheme and need some advice?  Our Copy Advice team are available to provide free, bespoke advice on your non-broadcast ads.

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