TikTok and other social media sites littered with tax misinformation

26 March 2024

A few weeks ago, we reported on how TikTok was being used by unscrupulous ‘tax advisers’ to promote seemingly ‘too good to be true’ tax avoidance schemes. This week, we are covering some of the (very concerning) misleading content and sometimes blatant misinformation in relation to tax, which appears to be prevalent on unregulated social media platforms.

RSM has seen numerous videos on social media sites from various influencers and podcasts, sharing dangerously misleading information to hundreds of thousands of unsuspecting members of the public. This includes a misinformation campaign on various social media platforms (one TikTok video we found had well over 200,000 views, and there are numerous similar posts and videos) advising taxpayers that it is ‘completely legal’ to refuse to pay taxes on the grounds that taxation receipts are being used ‘to fund illegal wars’. This is not possible, anyone trying to withhold tax payments from HMRC could be hit with interest, penalties and potentially criminal proceedings. 

We have also seen a video with over 600,000 views shared on the TikTok profile of a popular podcast, advising viewers to form limited companies for the running of their business, and consider recategorizing and deducting a raft of expenditure, such as holidays and meals, from their taxable profit as ‘business expenses’. This could be misinterpreted as a suggestion that many expenses can simply be re-badged as business expenses in order to be tax deductible when they are incurred by a limited company. The reality is that HMRC is well aware that some may seek to put what are truly personal expenses through a company’s books and police this issue accordingly. Those seeking to take illegitimate tax deductions could well be hit with severe penalties and interest charges for underpaid tax down the line. Indeed, deliberately claiming tax relief or repayments you are not entitled to could be seen as tax fraud and potentially lead to criminal proceedings. The high number of views and level of engagement with this content is concerning. Members of the public are clearly listening to this dangerous advice, and some may be acting upon it.

HMRC last week announced that it planned to shut down its self-assessment telephone line for six months a year, and only reversed this decision following intervention from the Chancellor. Low on resource and struggling, HMRC may therefore be attempting to push taxpayers towards obtaining their own advice, rather than approaching HMRC for assistance. In addition, HMRC is now moving to try to regulate the market for tax advisors and raise the standards of the profession. Many taxpayers, who cannot afford to pay for advice from an appropriately qualified individual or professional services firm, may therefore be tempted to take advice from these unregulated, unmoderated sources on social media. And they could inadvertently end up breaking the law as a result.

Aysha Marley
AUTHOR
Aysha Marley
AUTHOR