The internet contains the entire repository of human knowledge and social media is many people’s gateway to accessing it.
The problem is that social media is a lawless place where claims that the moon landing were faked and the government are reptiles is given equal weight to serious political discourse and cat pictures.
Throw in tax advice and you end up with a recipe for disaster.
We want to help you stay vigilant of the kind of advice that is offered on social media so that you and the people you know do not end up making costly mistakes.
Why should you be nervous about tax advice online?
Bad social media advice is a growing source of dubious tax filings that can trigger fraudulent returns and costly enquiries.
It does not take much for someone to turn on their phone camera and speak authoritatively on a subject they barely understand.
If you want to see this in action, and in a safer way than with tax advice, try looking up discussions of your favourite movie and see how long you can stand it.
If you do encounter any tax advice on social media, you should be sceptical by default.
Start by checking the credentials of whoever is talking to see if they come from a reputable firm.
Many accountants, including us, do have a social media presence but will also indicate that the content produced is backed by our experts.
In the UK, financial and tax advisers may be regulated or carry professional memberships you can verify via public registers.
If a recommendation sounds sweeping, then you should try to research where the advice came from.
If in doubt with any advice, seek a professional you know and trust to clarify the situation.
What practical steps reduce the risk of being misled?
Don’t act on a social media post alone.
Save screenshots and links, and feel free to message the influencer directly to ask for the underlying reasoning in writing.
If they are an expert, they should be happy to offer deeper insight.
Before you apply an idea to your return, model the tax outcome with a qualified adviser or your own tax software.
If you do follow a suggestion and then attract an inquiry, having a clear paper trail that includes dates, source links, calculations, and correspondence can make it far easier to resolve the position.
This has the added benefit of drawing attention to misinformation or fraud so that other people are protected too.
If you suspect a post is a scam, report it outright rather than testing it for yourself.
HM Revenue and Customs (HMRC) asks that suspicious emails, texts and social media accounts are reported so they can be taken down.
What should you do if you’ve already followed bad advice?
If the result is an incorrect return, act quickly.
Correct the return or file an amendment and, if necessary, disclose the position voluntarily as timely disclosures usually reduce penalties.
If HMRC contacts you, respond promptly and provide the documentary evidence that shows you relied on a social source.
This will not make the problem go away, but it can help mitigate penalties.
If communications stall or you feel overwhelmed, escalate the matter by using official complaint routes, or ask an authorised agent to represent you.
The regulators and independent adjudicators exist to ensure fair treatment.
Bad tax tips can often look persuasive because they’re short and shareable.
Your best defence is to get into the simple habit of verifying everything you see on social media before you incorporate it into your daily life.
If you’d like help vetting an online tax tip, then speak to us and we will be happy to talk you through whether or not it’s a good idea.
Stop social media scams from sabotaging your finances. Speak to our team today!
