An advice firm has been order to pull the plug on their adverts, which claimed they could slash stamp duty bills by 60 per cent.
An advert produced by CDP Tax and Wealth Ltd, trading as Fiducia Wealth & Tax, in August 2017 was headed "Calculate stamp duty land tax. We will save you a minimum of 60 per cent."
But the Advertising Standards Authority upheld a complaint and demanded the advert be pulled based on HM Revenue & Customs's definition of tax avoidance as bending the rules to gain an advantage that Parliament never intended.
HMRC and another complainant, a tax lawyer, had argued the claims stamp duty bills could be slashed by 60 per cent were misleading.
Both argued the arrangement being promoted met the definitions of tax avoidance and made the payment of stamp duty appear optional, contrary to government guidance.
HMRC also argued the advert misleadingly implied the adviser's arrangements did no more than use statutory reliefs from stamp duty for the purpose for which they were designed, which the tax office did not believe was the case.
In its ruling, the ASA said: "Although we acknowledged that Fiducia said they assessed individuals’ circumstances and maintained that, following counsel, they did not advise all clients to enter the advertised scheme, we did not consider that we had seen sufficient evidence to show that Fiducia’s arrangement was not a scheme of avoidance and would not be subject to a challenge from HMRC.
"We therefore concluded that the claims were misleading."
The ASA also ruled that Fiducia had not provided sufficient information or documentation to explain the nature of their arrangement and how they ensured the arrangement only used statutory reliefs and would not leave users at risk of a challenge from HMRC.
HMRC claimed the scheme artificially changed the nature of the land transaction so as to turn an eligible for the purposes of stamp duty property purchase into an exempt transfer.
Text in the advert stated: "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."
Text accessed via the link "Stamp Duty Land Tax" stated "At Fiducia, we tailor our stamp duty land tax (SDLT) strategies to each individual property purchase and client, making sure that every regulation is fully catered for along the way."
Under the sub-heading 'Our plans' text stated "Don’t require any input from your vendor, don't require you to notify HMRC and reduce delays in the conveyancing process overall".
Claims on the adviser's FAQ page stated "Can I be confident that there won’t be issues later on?"
A dropdown response stated: "The implementation of your tax planning will be carried by a number of SRA-regulated (Solicitors Regulation Authority) firms, and one of the cornerstones of their regulation is that the firms must act in your best interests at all times."
The ASA said this reference to the SRA would lead some people to understand the scheme had been specifically considered and approved by it, and was therefore endorsed by that body, particularly as their logo appeared on Fiducia’s website.
But the ASA said it had not seen any documentation to show such consideration, approval or endorsement had been given by the SRA.
Fiducia bosses argued their clients' circumstances were individually assessed by tax counsel, and then appropriate recommendations were made.
They gave examples where counsel might conclude that no actions were appropriate, or might make a series of actions which were intended to manage a client's potential tax liabilities, regardless of whether the tax was classified as, for example, stamp duty, capital gains tax, corporation tax and so on.
Fiducia said they did not control or guide counsel and argued the advert did not imply the payment of stamp duty was optional but just suggested a saving might be available.
They considered the adverts were an invitation for prospective clients to discuss their services and argued only a small number of potential customers went on to retain their services, as their services were not always appropriate.
They did not accept that there was a legal, statutory or binding definition of tax avoidance.
Fiducia also argued their claim about the SRA did not imply endorsement.
emma.hughes@ft.com
