You Are Feeling Guilty

HMRC using psychological warfare against taxpayers

Chief Secretary to the Treasury, Danny Alexander, has told the Liberal Democrat party conference that HMRC have now turned to psychologists and behavioural economists in an attempt to heap guilt upon those who do not pay their taxes on time.

The wording in hundreds of thousands of letters sent out to taxpayers has been subtly tweaked in the hope that it will provoke people to pay their taxes. A similar approach is being used to target potential tax evaders.

So far, the new wording has reaped an estimated £210 million of additional tax each year.

To help HMRC understand which words and concepts were most effective in inducing guilty feelings amongst people, the department conducted a trail involving 100,000 taxpayers. It was discovered that comparing the behaviour of tardy taxpayers to the degree to which the ‘social norm’ are paying their taxes, made it more likely that they would co-operate and stump up the cash. As a result, the letters now state that, “9 out of 10 people in the UK pay their tax on time”, or “most people with a debt like yours have now paid it.” Furthermore, the use of local comparisons was employed to further encourage swift payment.

In other cases, it was brought to the attention of taxpayers that they were making an “active choice” if they ignored a tax payment reminder. This had the desired effect of tax revenues doubling in a month.

Making the direct comparison and importance of taxes to the funding of public services appeared to ring a bell with those who have large debts. Taxpayers owing £3,000 were found to be 20% more likely to respond to letters that highlighted public services than those which didn’t.

Pop up on to the couch Mr Taxpayer, stare at the watch and repeat after me. “I want to pay my taxes”!