Advertising watchdogs have banned financial advisers from marketing a scheme that claims to save stamp duty of up to 60% when buying a home.
HM Revenue & Customs complained about the claims on the web site of CDP Tax and Wealth Ltd trading as Fiducia Wealth & Tax.
The web site said: “Calculate Stamp Duty Land Tax We Will Save You A Minimum Of 60%’ followed by the explanation: “We do not promote nor advocate stamp duty avoidance schemes. Instead we seek to efficiently plan our clients’ property tax affairs by only utilising government approved statutory tax rules that are contained within the tax legislation, so that our clients only pay the tax intended by Parliament.”
Tax man’s challenge
HMRC challenged the advert as misleading on several grounds:
- The web site did not explain stamp duty was not optional and the scheme was a suspected tax avoidance vehicle
- The scheme did more than apply existing rules by artificially changing the nature of the transaction to qualify for an exemption
- The scheme required HMRC notification under disclosure of tax avoidance rules contrary to statements on the web site
- The web site wrongly inferred lawyers endorsed the scheme
- The firm omitted to explain clients may face costs and penalties from HMRC if their home purchase was proved to have been part of a tax avoidance scheme
Fiducia disagreed with HMRC’s claims, explained the Advertising Standards Authority ruling.
“They acknowledged that HMRC might take the view that their use of the statutory exemption was artificial but considered that until such a time as it was established by way of tax tribunal, their view did not constitute a legal, statutory or binding definition, and remained their view only,” said the ASA.
“We noted that HMRC’s view was that the scheme had been conceived to manipulate stamp duty rules for a tax advantage that was contrary to the express intention of Parliament; Fiducia’s portrayal of it as utilising ‘government approved statutory tax rules’ was misleading.”
The ASA upheld the HMRC complaint and ordered Fiducia not to advertise misleading claims about their service as the firm could not prove their claims did not promote tax avoidance.