A company promoting stamp duty land tax (SDLT) avoidance schemes has been censured for making it look as though the Solicitors Regulation Authority (SRA) endorsed its activities.
Both HM Revenue & Customs and a tax lawyer complained to the Advertising Standards Authority (ASA) about the website of Fiducia Wealth & Tax, a trading name of CDP Tax and Wealth.
It promised to save customers at least 60% on SDLT, saying: “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”.
On an FAQ page, in answer to the question ‘Can I be confident that there won’t be issues later on?’, it said: “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”.
Despite Fiducia’s efforts to argue otherwise, the ASA upheld all five grounds of the complaints, saying it had not seen “sufficient evidence to show that Fiducia’s arrangement was not a scheme of avoidance”.
Fiducia did not consider that it had implied SRA endorsement. It said two parties were required to implement the structure. One party represented a trust party and the other represented their buyer client.
Both parties were independently represented by solicitors to ensure there was no potential for conflict of interests, as per the SRA Code of Conduct.
The ASA ruling noted the SRA’s warning notice about SDLT schemes and its concern whether any solicitor considering becoming involved in implementing or promoting an SDLT scheme could comply with the SRA Handbook.
It said consumers, traders and businesses would be reassured by the claim on the website, “which reinforced the impression that the scheme would enable users to pay the appropriate amount of tax and not be at risk of a challenge from HMRC”.
The ruling continued: “We further considered that some consumers, traders and businesses would understand that the advertised scheme had been specifically considered and approved by the SRA, and was therefore endorsed by that body, particularly as their logo appeared on Fiducia’s website…
“In light of the concerns which we understood had been raised by the SRA about the promotion or facilitation related to the payment of SDLT, and in the absence of supporting documentation showing that Fiducia’s arrangement had been endorsed by the SRA, we concluded the claim was likely to mislead.”
The ASA concluded: “The ads must not appear again in the form complained of.
“We told Fiducia to ensure they held sufficient evidence for their claims and to disclose any relevant information in their advertising, such as the implications or risks of entering into a financial arrangement, including a challenge to a user’s tax arrangements by HMRC and the charges which might apply.
“We also told Fiducia not to imply they had been endorsed by the SRA.”