Trial is latest 'nudge' tactic designed to help boost tax payment rates.
HMRC has sent text messages warning taxpayers to pay what they owe on time to avoid fines and getting into debt, it has emerged.
The SMS prompts were sent in a trial conducted by the Government's Behavioural Insights Team and involved 13,000 taxpayers who fill in Self-Assessment tax returns.
However, critics of the scheme have called the messages ‘threatening’ and said that taxpayers may become alarmed by the new reminders if they were to be rolled out.
HMRC text messages
The group received three types of message in the trial run by the Government unit.
The ‘Standard’ text alerted the taxpayer to the outstanding debt and gave instructions on how to pay.
The ‘Monitoring’ message was slightly more threatening and pointed out that HMRC would be keeping a close eye on whether the debt was paid the following week.
And the ‘Penalties’ message included the phrase ‘most people pay on time to avoid penalties.’
Getting results
The unit found that sending the 'Standard' text message increased payments by 2.3%.
However, the more alarming ‘Monitoring’ message boosted payment rates by 3.8% and the ‘Penalties message saw a 7% uplift.
The Behavioural Insights Team’s report concluded: “Given that SMS messages are cheap to send, these results are very promising indeed.”
The unit also sent messages to other groups of Self-Assessment taxpayers that were due to make a payment at the end of July 2015.
These messages included ones that reminded recurring late payers of the deadline saying ‘you were late last time.’ After receiving this message, the number of late payers hitting the deadline increased by 50%.
The SMS scheme is the next step following on from previous campaigns where HMRC has adjusted the wording of letters to boost payment rates.
HMRC claims to have raked in an extra £210 million from taxpayers using these controversial ‘nudge’ tactics.
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