Using HMRC educational messaging on third party platforms

About the study

HM Revenue & Customs (HMRC) are seeking to deliver educational messaging via third party intermediary platforms to expand their reach while ensuring that a focused customer population is targeted. The aim of the messages is to support customers to pay the right tax, at the right time.  

HMRC commissioned the National Centre for Social Research (NatCen) and Walnut to carry out qualitative research to gain an in-depth understanding of whether messaging was effective when delivered to HMRC customers via third party platforms, including online banking, compared to messaging from HMRC directly.

The research involved two populations of interest, which are addressed separately within the report:

• HMRC customers who use online platforms to sell goods, let property or for banking;
• conveyancing solicitors who use online platforms to complete Stamp Duty Land Tax (SDLT) forms on behalf of their clients who are HMRC customers.

Findings

For HMRC customers, the purpose of the messages was to encourage customers to consider the need to register with HMRC and correctly report taxable income for tax purposes. Customers interviewed generally wanted to understand their tax obligations from an early point but only when applicable and relevant. The research found that there were 5 main factors which determined the impact of messages:

• whether the message was understood as legitimate
• whether the message was received at the right time in the customer journey
• whether the customer understood the message as relevant to their circumstances
• whether the message was seen as intended to help the customer
• whether the message was perceived as important and urgent

Overall, those who used online platforms to sell goods or let property felt HMRC branded messages on third party platforms were the most likely to generate the intended customer response compared to non-branded messages on third party platforms and direct emails from HMRC. For participants who were shown messaging on a hypothetical bank account page, the non-branded message on the banking platform was felt to be most effective. However, customers felt messages of all types should be supportive in tone and link to a page that both explains why a customer has received the message and contains clear and simple guidance about when tax obligations apply.

For conveyancing solicitors, the purpose of the messages was to encourage conveyancing solicitors to pass on information about tax obligations and reliefs to their clients. Participants felt messaging about tax would be most useful when they are first instructed by their clients to begin the conveyancing process. Messaging within the SDLT form was still welcomed as a final safeguard against error. Conveyancing solicitors generally reported that they would pass HMRC messaging on to their clients. However, a number of factors had to be considered for them to do this:

• receiving the messages at a sufficiently early point to influence the transaction
• the time constraints which mean conveyancing solicitors often complete SDLT forms at speed or delegate the task
• the formatting of the SDLT form itself, which already contains other warning messages
• whether the conveyancing solicitor considers the tax relief to be relevant to the transaction

The findings indicate that messages should present information on tax obligations and reliefs in a way which can be easily shared with the client (for example in PDF format) and be formatted in a way which stands out from the existing form (in red font with a tick box to confirm it has been read). Private sector platforms should link to guidance on HMRC webpages, as this is considered an accurate and trusted source. Messages should also remind conveyancing solicitors that it is the purchaser’s choice what to declare and claim and emphasise the possible financial implications for the transaction.

Methodology

The research involved 65 in-depth interviews across two groups of interest to HMRC:

• HMRC customers who use online platforms to sell goods, let property or for banking
• conveyancing solicitors who use online platforms to complete SDLT forms

The interviews used hypothetical scenarios and interview stimuli to present participants with different types of messages. While this report presents the views of those interviewed, these are expected to reflect the range and diversity of views within the populations of interest.

HMRC customers were presented with three stimuli:

1. an email direct from HMRC using formal language
2. a message on a third party platform using the third party colours and language
3. a HMRC-branded message on a third party platform using HMRC colours and more formal language

The purpose of the messages was to encourage customers to check whether they needed to register with HMRC and correctly report taxable income for tax purposes.

Conveyancing solicitors were also presented with three stimuli.

1. a non-branded message referring to SDLT reliefs in general and using red formatting
2. a non-branded message including detail on a specific tax relief (either Group Relief or Multiple Dwellings Relief) using red formatting
3. a HMRC-branded message including detail on a specific relief using HMRC colours

The purpose of the messages was to encourage conveyancing solicitors to pass on information about tax obligations and reliefs to their clients.