Research and analysis

Exploring non-compliant attitudes and the role of fairness and trust

Published 29 May 2025

Prepared by Yonder Consulting for HMRC 

Authors: Ben Lloyd and Tom Wormald  

Research report number: 752 

July 2023 

The views in this report are the author’s own and do not necessarily reflect those of HM Revenue and Customs. 

1. Executive summary 

In July 2020, HM Revenue and Customs (HMRC) and His Majesty’s Treasury (HMT) published a 10-year strategy to build a trusted, modern tax administration system. International evidence from the Organisation for Economic Cooperation and Development shows that a trusted, modern tax system that makes it easy for taxpayers to pay the tax they owe is the most cost-effective way of securing and sustaining future revenues. HMRC commissioned Yonder Consulting to undertake research on trust in HMRC, perceptions of fairness, and the extent to which these perceptions influence attitudes towards compliance. 

Trust is important because evidence suggests a relationship between trust in the tax system and voluntary compliance. Greater levels of trust may also strengthen the ability for revenue authorities to successfully collaborate with taxpayers and make bold changes to modernise tax collection.  

Overall levels of customer trust in HMRC are measured using existing customer surveys, for example the Individuals, Small Businesses and Agents survey. Such quantitative research does not allow a deep understanding of the range of factors that influence trust, hence the need for qualitative research. This qualitative research was exploratory and aimed to develop HMRC’s understanding of the relationship between perceived fairness, trust and compliance attitudes.  

The research focused on individuals and small businesses that were identified as accepting, in theory, reasons why some people may not fully meet their tax obligations (‘attitudinally non-compliant’ taxpayers).  It is important to note the vast majority of individuals and small businesses pay their fair share of taxes and Individuals, Small Businesses and Agents survey evidence demonstrates the majority of taxpayers perceive tax evasion to be unacceptable This research was therefore deliberately targeted towards a small minority who were identified as ‘attitudinally non-compliant’ based on their responses to screening questions.  

1.1 Key findings 

The key findings for the research are outlined below: 

1.1.1 Perceptions of fairness, trust and how power is exercised (Chapter 4) 

Evidence from this study emphasises the importance to participants of a reciprocal relationship; the need for an equal and balanced relationship between 2 parties. Trust is perceived as something that must be earned over time and consistent with participants’ expectations of how an organisation should behave (see 4.1). 

Many participants identified a strong link between fairness and the concept of power. When interviewed, participants did not question the idea that some organisations, including HMRC, should have power vested in them. However, participants’ expectations of these organisations are consequently very high, with exemplary standards required in terms of how they exercise their powers in order for them to be seen as fair and trustworthy.  

Some participants stated contradictory expectations of HMRC in terms of treatment of customers. On one hand, they expected HMRC to show flexibility and make reasonable allowances in dealing with the specific circumstances of an individual or business. On the other, they expected HMRC to treat everyone the same. Equal treatment is a key feature of how participants discussed fairness, and the consequent ability to trust an organisation. Some participants felt HMRC is not consistent, and therefore not fair, in how it applies its powers to larger companies, compared to small businesses and individuals. 

For those participants who perceived systematic non-compliance to be acceptable, HMRC is not seen as striking the right balance between showing flexibility towards individuals and small businesses, and consistency in its application of powers across large businesses. For these participants, there was an associated low level of trust in HMRC and a greater openness to non-compliance. 

1.1.2 Attitudes towards compliance (Chapter 5) 

Participants in this research were strongly characterised by their strong reported belief in the importance of ethics, obeying the law and the individual duty to conform to the rules of society. This belief included the need and responsibility to pay taxes. It was generally agreed that taxation is important and helps ensure a fairer society.  

However, whilst participants recognised and agreed with the requirement to pay taxes in principle, they also held views on ‘justifiable’ reasons and circumstances where non-compliance could be acceptable.  

Attitudes towards compliance, and the underlying reasons participants described, varied. Broadly, they fell into 3 groups:  

Group 1:  

• participants in general felt taxpayers making mistakes was acceptable and, for some, inevitable (even if unintentional) given the perceived complexity of complying and effort required and their lack of experience with the process 

Group 2:  

• for some participants there was an acceptance that seeking occasional opportunities to not comply in full was reasonable 

• attitudes of participants do not follow a clear pattern but are best characterised by an acceptance among some that it is occasionally reasonable for taxpayers to allow things to slip through without it being a ‘normal’ part of how they operate 

Group 3:  

• systematic non-compliance, deliberately avoiding or reducing payments, could be perceived as reasonable by some participants  

• for these participants there was an associated perceived difference in fairness of treatment by HMRC between small and large businesses  

1.1.3 Influential factors shaping levels of trust in HMRC (Chapter 6) 

Analysis showed that drivers of trust fall into a hierarchy, which included:  

• functional drivers: basic expectations of a credible business (for example the business has a registered office and is regulated where appropriate) 

• service drivers: associated with the responsibility and accountability an organisation has (for example provides good customer service, has an easy to navigate website) 

• experience drivers: from perceptions of the overall experience of interacting with an organisation (for example a commitment to appropriately rectify mistakes) 

When considering HMRC, most participants expressed reasonable levels of trust around key functional and service-based drivers, but HMRC is seen to perform less well in terms of experience-based drivers.  

1.1.4 Conclusions (Chapter 7)  

The perception that HMRC has acted fairly or unfairly can build or erode trust, and these perceptions influence participants’ acceptance of non-compliant attitudes. 

For all participants, there was an expectation that HMRC will treat individuals and small businesses in a way that reflects their specific circumstances. Those less confident that HMRC would tailor its treatment of them had lower trust and so were more open to perceiving non-compliance as acceptable. 

Many participants highlighted areas in which they believed changes could serve to improve both perceptions of fairness, and also trust in HMRC. These included tackling the perception that guidance and support materials are lacking and difficult to find or use; improving digital and self-serve systems; and making it easier to receive direct support from HMRC.  

2. Background and introduction to this research

2.1 Background: the focus on trust and fairness 

HMRC commissioned Yonder Consulting to undertake research on trust in HMRC, perceptions of fairness, and the extent to which these perceptions influence attitudes towards compliance. International research (Muehlbacher, Kirchler and Schwarzenberger, 2011, pages 89 to 97) has demonstrated a strong link between higher levels of trust leading to higher levels of voluntary taxpayer compliance, identifying fairness as a key component of trust in this context.  

HMRC aims to use this insight to drive compliant attitudes and behaviours, by increasing levels of trust and taxpayer perceptions of fairness. However, research into the relationship between trust, fairness and how perceptions influence attitudes towards compliance is scarce in the UK. HMRC therefore commissioned Yonder to conduct qualitative research to explore how trust in HMRC and perceptions of fairness may influence attitudes towards compliance and to explore the extent to which these perceptions matter. 

In addition to procedural fairness, other components of trust were hypothesised based on the existing evidence:  

• interactional and outcome fairness, that is for the former, whether customers think they are treated fairly by HMRC staff and, for the latter, whether participants believe the result of an interaction with HMRC is fair, especially when there is a disagreement about tax or debt liabilities 

• transparency, that is customers’ sense that the tax administration is transparent in the conduct of its activities and accountable 

• competence, that is customers’ trust in HMRC to get tax right for all by being reliable, responsive and providing certainty 

• power, that is how customers feel they are treated when HMRC uses its powers, and whether they believe sufficient safeguards are in place 

2.2 Research objectives 

This research focuses on trust in HMRC, perceptions of fairness, and the extent to which these perceptions influence attitudes towards compliance. The sample for the research comprised of attitudinally non-compliant taxpayers. These are defined as taxpayers who think non-compliance is acceptable, or could be under certain circumstances (see section 3.1 for specific criteria used).  

The aims of this research are to understand and identify: 

• perceptions of HMRC’s fairness among individuals and small businesses defined as attitudinally non-compliant, including factors which create or undermine fairness, and how these perceptions influence trust 

• trust in HMRC in this audience, the factors which create or undermine it, and its relationship with compliance attitudes  

• to understand the extent to which fairness and trust matter in shaping attitudes towards compliance in this audience 

3. Methodology 

Yonder Consulting was commissioned to conduct this work by HMRC. This section provides details on the research methodology employed. 

3.1 Identifying and recruiting participants 

The focus of this work was on attitudinally non-compliant individuals (completing self-assessment) and small business owners. This overall audience was divided into 3 groups for the purposes of recruitment:  

• individual taxpayers in self-assessment 

• self-employed, sole traders, partnerships and companies with turnover under £85,000 

• self-employed, sole traders, partnerships and companies with turnover £85,000 or above 

In total 42 participants were recruited with broadly equal numbers of depth interviews conducted with each group as above. A good spread of demographics and business types were achieved across groups. 

Table 1 Research participant type and demographics

	Male	Female	25-44 years	45-64 years	65+ years	Total
Self-employed or small business. Turnover between £85,000 to £10million	11	3	4	10	0	14
Self-employed or small business. Turnover below £85,000	6	7	5	8	0	13
Non-business taxpayer	7	8	6	8	1	15
Total	24	18	15	26	1	42

All sample was recruited by Yonder based on the agreed screening criteria, covering how taxpayers paid tax (via self-assessment or not), use of a tax agent and whether they communicated with HMRC directly or via an intermediary. 

All participants in the research were defined as being attitudinally (but not known to be behaviourally) non-compliant. This definition was based on their responses to a battery of statements used in a previous HMRC study on the role of communications in voluntary compliance to identify the same population, with attitudinal non-compliance determined by taxpayers agreeing with at least 2 of the following statements: 

• as long as you pay tax on most of your income, it is okay not to include all of it on your tax return  

• as long as you mostly stick to the rules around tax, it is okay to bend them 

• it is sometimes okay not to pay all your tax, since many other people are also doing this a bit  

• it is sometimes okay to claim for business expenses on your tax return when you do not have receipts for them  

While there are no robust estimates of how the UK taxpayer population would respond to the specific questions used for screening, a number of sources demonstrate that those with non-compliant attitudes are the minority. For example, HMRC’s annual Individuals, Small Businesses and Agents survey gathers evidence on customer experience and perceptions of the tax administration system, including views on acceptability of tax evasion. 

Data for the Individuals, Small Businesses and Agents Customer Survey 2022 showed that 80% of Individuals thought tax evasion was never acceptable. 18% perceived tax evasion to be acceptable in some circumstances and only 2% thought it was always acceptable. Figures for small businesses were similar with 86% agreeing tax evasion was never acceptable. 10% said tax evasion was acceptable in some circumstances and 2% said it was always acceptable.  

3.2 Pre-task 

During the recruitment process, each respondent agreed to complete a pre-task outside of the interview. The aim of this pre-task was to capture the context for participant’s views on the types of organisations they trust, their views on tax, and their outright responses to tax-related scenarios.  

Responses to the pre-task were analysed before interviews and were used to build rapport with participants as well as to establish a basic understanding of their views towards key issues. It also acted as stimulus for detailed exploration of those views during the interview discussion. 

3.3 Interviews 

Each participant took part in a qualitative, one-to-one, in-depth interview. Interviews lasted between 30 to 45 minutes and were conducted using a topic guide agreed in advance between Yonder and HMRC. Topics covered in this guide included: 

• participants’ views on and definition of compliance and how it can be encouraged 

• their general attitudes towards HMRC 

• their views on trust, fairness and power 

• detailed exploration of fairness, trust and power in the context of their experiences and perceptions of dealing with HMRC 

Interviews were conducted between March and May 2021 via Zoom, Teams or telephone, according to the respondents’ preference. 

3.4 Analysis 

All interviews were transcribed and analysed, along with each participant’s pre-task submission. 

Qualitative analysis is conducted to understand attitudes, behaviours and circumstances in detail. It does not seek to be representative.  

A thematic approach was applied to the final analysis of material gathered in the research. In this approach, common themes and outlier views were identified across different interview and pre-task submissions, along with relevant quotes, and these were allocated back to the core areas of focus outlined in the topic guide. Topline analysis was also conducted by the core interviewing team while fieldwork was underway, to ensure initial themes could be captured early in the interview process and, where required, specific areas could be further explored on future calls. 

4. Perceptions of fairness, trust and how power is exercised  

4.1 Perceptions of fairness and trust 

Fairness is defined by participants in terms of reciprocity, meaning the need for an equal and balanced relationship between 2 parties. The notion of reciprocity and a “2-way street” emerged strongly as a key theme in shaping perceptions of fairness, with any organisation participants interact with. Participants expected a reciprocal relationship, where if HMRC’s expectations of taxpayers are to feel reasonable, it is fair to expect HMRC to conform to what participants see as reasonable expectations for a tax authority. 

“It always seems to me they threaten you if you’re a day late, but they can just take as long as they want! I think it just seems naughty to do that. It needs to be a 2-way street and it needs to be fair to both.” (Small business, turnover of under £85,000)

Where participants believed this reciprocal relationship with HMRC did not exist, there was a negative impact on perceptions of fairness. This tended to happen at 2 levels, with expectations of what is fair or reasonable being somewhat different, or even contradictory, between each: 

Individual perceptions:  

• based on participants’, or those known to them, past experiences of interacting with HMRC and whether they believe to have been treated fairly 

• participants expected HMRC to take into consideration the specific and legitimate circumstances of taxpayers 

• when taxpayers are trying their best to do the right thing, participants believed that applying rules in a ‘blanket’ manner rather than looking at individual circumstances was unfair, whether in terms of how people are treated or what they are expected to pay 

“They are a large organisation, whilst they are under-resourced, they have resources available to them. So taking each case on its merits would be better, rather than a blanket approach to things.” (Non-business taxpayer)

Wider perceptions:  

• based on participants’ beliefs about how fairly HMRC treats other taxpayers, most often regarding large businesses, they hear about in the media 

• unlike the focus on reciprocity and the need to take individual cases into consideration, participants identified a strong need for consistency, particularly on how larger businesses appear to be treated 

• there is a perceived inconsistency, and therefore significant unfairness, where larger businesses are seen to be given more flexibility and can “get away” with things small businesses or individuals could not 

“When you hear of big companies not paying the correct tax while operating within our tax system, all the different loopholes, you think, well I pay mine; they should pay whatever they need to pay that is relevant to their earnings.” (Non-business taxpayer)

A major perception surrounding treatment of larger businesses was their access to greater resources. Larger businesses were perceived to have the ability to reduce their tax exposure by investing in accountancy or other advice. By contrast, participants believed individuals or smaller businesses can be regarded as ‘easy targets’ by HMRC, and unable to ‘get away’ with things that are possible for large businesses or wealthy individuals.  

“What about the large organisations who have the ability and the clever accountants, they can avoid paying millions or even billions of pounds’ worth of tax. Somehow they seem to keep getting away with it.” (Small business, turnover of under £85,000) 

For some participants, this perceived unfairness directly contradicted expectations for consistency in creating a sense of fairness for taxpayers. If participants (or people known to them) had experienced HMRC behaving in ways they regard as unfair, this could be perceived as an example of when it is justifiable to ‘balance out’ the relationship, and for some participants, a greater level of acceptance of non-compliant behaviours.  

“I do think that they need to toughen up in some areas because it is this case of the small guy sees these great injustices happening with the large organisations and they think, well, my little cash-in-hand job or whatever is a blip in the ocean. Why shouldn’t I do that?” (Small business, turnover of under £85,000)

4.2 Views on the power vested in HMRC and how this is exercised: 

Almost all participants recognised HMRC has an important and difficult role to play in society.  Participants also generally agreed it is right for HMRC to be empowered and equipped to act against those who do not pay taxes properly.  

Many participants also stated that, unlike most other organisations they interact with, there was no choice but to engage with HMRC. Some felt HMRC was overly focused on executing a legal obligation and not always exercising an appropriate use of its power with a high sense of responsibility and fairness. 

“I think the power element from HMRC is oppressive and dictatorial and without compromise, and I think they need to shift focus a little bit, because, actually, we are the customer. It should be a relationship, not a one-way street of, these are the rules, do or die.” (Non-business taxpayer)

However, for some participants, there was a worry that if they did make a mistake, HMRC would not behave in a proportionate manner. Concerns were also expressed that personal circumstances and past compliant behaviours would not be considered by HMRC. 

Some participants described how they perceived HMRC to be exercising its powers unfairly and not in line with what they felt would be reasonably expected. There was an associated perceived imbalance in the relationship between taxpayer and HMRC, and a negative perception of fairness.  

“It does not matter what one says, HMRC is going to have their way come what may. It does seem that if HMRC does not like a rule they change it and they even apply it retrospectively and that is simply not fair. If one behaves by the rules and then the rules are changed and they say, ‘Oh no, back then the rule should have been this, so that is what we are going to apply’, there is no justice in that, there is no fairness in that.” (Non-business taxpayer)  

This perceived imbalance of power was further amplified for some participants, who felt HMRC does not apply its powers to large businesses in the same way it does for small businesses or individuals. This view was expressed whether or not participants reported experiences where they felt they had been treated unfairly themselves.  

“There are cases where you hear of some organisations doing things and, quite frankly, you wish that HMRC would use their powers more on them. I do not really know to what degree they do exercise the power that they have got and on whom. I am not privy to that but there certainly are times, as I said, when I feel to myself; I wish that they would step in and deal with that because it is just not fair.” (Small business, turnover of under £85,000)

5. Attitudes towards compliance 

All respondents in this research stated the importance of ethics and conforming to the rules of the system.  

“I think if you run your own business, you have to have good ethics and you have to have integrity. That is how we treat our customers, you have to have integrity.” (Small business, turnover of under £85,000)

Participants believed behaving according to the rules to be an important individual duty and expected others to do the same. This sense of mutual responsibility to uphold standards related to how participants defined both fairness, and the relationship between fairness and trust. 

“I do think of Britain as quite fair. I think our policing system is fair. To the working man, it is quite fair, I think, we are treated fairly in general and we need to pay our taxes.” (Non-business taxpayer)  

No participants questioned the importance of paying tax. They believed the principle of taxation is positive because it redistributes wealth and plays a critical role in ensuring a broadly fair society. All participants recognised it is right to expect people to contribute through the taxes they pay. 

“It is essential for society, if we are to have a civilised society. We need to have an income coming in, and it needs to be paid by all the citizens that are able to pay it, in order that we have a country that runs and can pay for things.” (Non-business taxpayer)

For all participants there was a clear recognition of the need to pay tax, but many participants also explained contradictory feelings about certain circumstances where it may be reasonable not to fully comply. 

“You could have a business which is not doing so well; you have got a family to support; a mortgage to pay; and you think if I can maybe keep a bit of that money back that would help me out. Again, ethically, it is wrong but they are doing it for the right wrong reasons. I know that is a contradiction. There is wrong wrong and then there is right wrong.” (Non-business taxpayer)

The circumstances described by participants where non-compliance could be acceptable were informed by either their own personal experience with HMRC or those of friends, family and colleagues close to them. And for many participants, the media played an important role in shaping their perceptions of HMRC’s treatment of larger companies. 

Attitudes towards compliance and the underlying reasons participants described varied, but broadly fell into 3 groups: 

5.1 Group 1 

Participants felt taxpayers making mistakes was acceptable and, for some, inevitable given the perceived complexity of complying and effort required.  

In this context, many participants believed and accepted that while they do not want or intend to make mistakes, it is inevitable that mistakes will occur, and there was an associated perception that in these circumstances people could be non-compliant, even though they do not intend to be. 

Many participants felt the balance of responsibility between them and HMRC is unreasonable because it is unfair to expect taxpayers to get things completely right in such a complex system. Participants saw it as particularly unfair if HMRC does not recognise the specific circumstances in which an individual is perceived to be more likely to make mistakes (for example, newer to Self-Assessment, less able to use the internet, have learning difficulties).   

“When you sell a rental property, you have to file this online report within 30 days, with HMRC, and that’s fine for people our age, who are savvy enough to go and create a government ID and that kind of thing, but I heard a case recently of an 80-year-old woman who sold a property and could barely use the internet. This form that she had to do online is late and trying to get her to do it is quite difficult.” (Non-business taxpayer)

“I think there is always that worry, “I hope I got this right!” The feeling, ‘If I have not got it right, particularly if I have basically not declared as much as I should have, that they might come down hard on me.” (Director, Self-employed and small business, turnover of under £85,000)

“It is no wonder that some people have real difficulties understanding it and end up getting themselves in a situation where they owe the tax.” (Non-business taxpayer) 

“I feel like the onus is on you as an individual to make sure you are up to date with them so I worry that I have misinterpreted something sometimes or misread it, I like to make sure… So I suppose, yes, worry that you have not done it right but doing it to the best of your ability so you are confident in what you have done. But I do worry whether they are sympathetic if you have made an error or something.” (Non-business taxpayer)

5.2 Group 2 

For some participants there was an acceptance that seeking occasional opportunities to not comply in full was reasonable.  

Underlying this attitude was a perception that complying with tax obligations was onerous. Occasional behaviours that enabled costs of complying, in terms of financial or time savings, to be re-claimed were seen as legitimate providing they were not a normal part of how an individual or small business operates. 

Participants identified circumstances where it could be acceptable for taxpayers to fail to declare everything they owe, or make minor adjustments to claims in their favour, while remaining, in their view, consistent with the overall principle and need to pay tax.  

For these participants occasional behaviours such as moving expenses claims from one month to the next, holding back payment until income has reached a certain point, or adding personal elements to business activities (for example adding a personal visit to a business trip being claimed for) were seen as understandable consequences of the natural pressures of running a business, or as understandable reactions to manage particular situations. 

In line with the views of all participants, those willing to accept this kind of occasional ‘bending of the rules’ continue to believe in the general importance and enforcement of compliance. 

“If it is somebody who is squirrelling away millions, that is a bit different to somebody who is just taking a bit of cash in hand for something, or something like that.” (Self-employed and small business, turnover of under £85,000)

5.3 Group 3 

For a few participants systematic non-compliance, deliberately avoiding or reducing payments, could be perceived as reasonable. 

For these participants there was an associated perceived difference in fairness of treatment by HMRC between small and large businesses.  

A few participants expressed the view that in some cases, there may be understandable reasons for non-compliance to become embedded in how a business operates. In these cases, participants understood what would start as irregular non-compliance such as the manipulation of declared profits or taking payments by cash, could become normalised. 

These participants believed there are acceptable reasons for people to deliberately avoid or reduce payments, due to perceived differences in fairness of treatment by HMRC between small and large businesses. These participants saw a more confrontational aspect to their relationship with HMRC, believing people they know or themselves have been treated unfairly. This attitude was also strongly expressed by participants who see other taxpayers, like large businesses, getting away with things that they believe personally they would not. 

“I think there is this huge element in society today, especially with big companies. They engage people and pay people a lot of money to be able to avoid what they should be paying. So what you find is, you have got the smaller companies that are competing against the big companies, who are paying their tax, because they have not got these expensive people that can tell them how to do it.” (Manager, Non-business taxpayer)

6. Influential factors shaping levels of trust in HMRC 

When considering trust in organisations, participants naturally focused on areas most relevant and apparent to them. The most influential factors that informed perceptions of trust are how organisations interacted with customers, how they cared for employees, and the actions of leadership.  

“Quality of service and customer care, prompt resolution and customer retention focused with incentives to remain a customer, quality and reliability of the product. Great warranties and easy help and fixes. These are the elements that stand out for companies I trust.” (Small business, turnover of between £85,000 to £10 million)

Analysis of participant interviews and pre-task comments showed that drivers of trust fall into a hierarchy, with achievement of each level building on and requiring those below: 

6.1. Functional drivers 

Basic expectations of a credible business to determine whether it is worthy of trust. These minimum requirements for trust to exist within an organisation were identified as: 

• registered office 

• VAT number 

• regulated (where appropriate) 

• possible to contact 

• possible to research 

6.2. Service drivers 

Assuming this basic level of credibility, the next level of trust was derived from the responsibility and accountability an organisation has, and the quality of service it offers to customers. Minimum expectations at this level included: 

• operational transparency 

• providing good customer service 

• an easy to navigate website 

• clear policies: products, services, sourcing, employment, sustainability and ethics.

• a commitment to quality 

• good reviews 

6.3. Experience drivers 

The highest levels of trust were derived from perceptions of the overall experience of interacting with an organisation. This includes experiences that deviate from the norm or go wrong. Key indicators of this included: 

• commitment to appropriately rectify mistakes 

• always sticking to promises 

• effectively and transparently managing expectations 

• consistent and committed customer service with a strong focus on resolution of issues 

6.4. Detailed findings 

Respondents identified a number of specific areas for HMRC to focus on to improve current perceptions of customer focus. Customers described: 

• an expectation to be treated as a customer of HMRC and therefore should receive the same level of customer service that they get from other companies they interact with, particularly to help with their specific queries 

• unintuitive HMRC websites making it difficult to get the required information they were looking for. What information that could be found was generic or not detailed enough for specific needs 

• challenges with self-service functionality on the website and in some cases not being able to speak to anybody at all to get the required information or support 

When evaluating HMRC specifically, most participants expressed reasonable levels of trust around key functional and service-based drivers, which must be in place for any organisation to be trustworthy: 

• as a government body, HMRC’s legal status and conformity with basic functional drivers of trust were a given for participants 

• with some specific exceptions, participants generally felt HMRC’s tax calculations can be trusted. In scenarios where tax advisors were involved, participants said this is more likely because they do not trust their own calculations, knowledge of the system or ability to comply, than because they do not trust HMRC 

• HMRC’s performance in ensuring public services have the funds allocated to them by Government was likewise recognised and acknowledged 

• none of the participants raised concerns that HMRC might be corrupt or behave in any illegal way 

“Why would you not trust them? They are a steadfast body that are there to take your taxes to help pay for other things throughout the national benefit system and to help you with your state pension in the long run.” (Small business, turnover of under £85,000)

However, in general HMRC is seen to perform less well in terms of experience-based drivers of trust in comparison to functional and service drivers. Trust in HMRC was strongly influenced by whether or not participants have received what they regarded as a reasonable service when interacting with HMRC. 

“Yes, I think it is quite difficult to trust when you cannot; there is no personal contact at all. It is like we are talking into a black screen, and I guess that is almost what the HMRC seems like. It is a black screen, there is no face behind it, there is no personal touch in any way.” (Non-business taxpayer)

For experience drivers, participants also recognised that improvements have been made, including the introduction of new digital services and a much more proactive provision of accessible information and guidance. 

“You can go into Government Gateway and you can access the website and see your account and you can then access information directly, whereas, back then, it was not as easy as that.” (Small business, turnover of between £85,000 to £10 million)

A particular difficulty for HMRC in this context was that many of its direct customer interactions occur in what participants defined as stressful situations, creating significant delivery challenges at a time when needs and expectations are higher.  

For example, participants described negative experiences at times when attempting to interact with HMRC because they are worrying about making a mistake, particularly when dealing with unexpected or unfamiliar situations, or feeling under a time pressure to complete things. For example, a small business owner rushing to complete their submission in time may feel like they are trying to deal with multiple challenges at the same time. In these cases, the requirement on them from HMRC can be seen as unreasonable and the level of support available insufficient.  

“It makes me think that they are very old-fashioned in the way that they operate. They just need to be a bit more in tune with people’s circumstances and be a bit more proactive in helping people.” (Small business, turnover of between £85,000 to £10 million)

7. Conclusions 

Participants strongly supported the principle of taxation and the duty to pay what they owe. However, some participants also hold the view that in certain circumstances, non-compliance can be reasonable and fair.  

Attitudes towards non-compliance and the underlying reasons participants described varied, but broadly fell into 3 groups: 

7.1 Group 1 

Some participants felt that it was understandable for taxpayers to make unintentional mistakes and, for some, inevitable given the perceived complexity of complying and effort required. 

Given the importance of fairness in establishing a relationship of trust for participants, the sense of unfairness regarding how genuine mistakes are perceived to be handled by HMRC leads to an erosion of trust. Participants expressed concerns that HMRC would use its powers disproportionately regarding ‘honest’ mistakes, or that past efforts of compliance would be disregarded in the case of an error. 

7.2 Group 2 

Seeking occasional opportunities to not comply in full was perceived as reasonable and, in participants’ views, an acceptable way of running and efficient business, as long as it is not a regular occurrence. 

Acceptance of irregular non-compliance tended to reflect participants’ willingness to believe that if people are generally fair in their own behaviour and can be trusted overall to pay what they should, then it is not unreasonable for them to take occasional opportunities to minimise exposure to their tax liability or make life easier from time to time.  

7.3 Group 3 

More systematic non-compliance is accepted and viewed as a reasonable approach when large businesses are seen to be treated differently to small businesses. 

A few participants expressed the view that in some cases, there may be understandable reasons for non-compliance to become embedded in how a business operates. In these cases, participants understood what would start as irregular non-compliance such as the manipulation of declared profits or taking payments by cash, could become normalised. 

These more ‘hardened’ attitudes and normalisation of non-compliance were associated with low perceptions of HMRC’s fairness and low trust in HMRC. This related to a particularly strong perception that HMRC would not treat taxpayers fairly as individuals. These participants believed HMRC would refuse to take personal circumstances into account and would act in a confrontational way. In turn, this led a few participants to the conclusion that there is no point in trying to be compliant.  

The views of these participants represented a fundamental breakdown in the reciprocal basis of trust and highlights a decrease in trust levels of HMRC’s competence, appropriate use of its power, or willingness to tackle difficult challenges. This led to the assumption that regular non-compliance is a ‘fair’ response to the unfair situation in which an individual or business might find themselves, and further contributes to the sense of a relationship that is primarily confrontational. 

7.4 Improvements suggested by participants: 

While there was recognition from participants that improvements had been made, in general HMRC is seen to perform less well on experience-based drivers of trust in comparison to functional and service drivers. Many participants highlighted areas in which they believed changes could serve to improve both perceptions of fairness, and also trust in HMRC.  

7.4.1 Regarding service level drivers: 

Providing expected levels of customer service and experience, such as easy to navigate websites, commitment to quality and operational transparency to help people navigate and understand their obligations. Equally, a commitment to appropriately rectify mistakes, always sticking to promises, effectively and transparently managing expectations to build trust. 

Tackling the perception that guidance and support materials are lacking and difficult to find or use. For example, materials with complex language or with lots of text to read. Although some participants do recognise an improvement, the dominant impression remains that support materials are difficult to use and the burden of understanding these resources is unreasonable. 

Improving digital or self-serve systems. These were seen by some participants as clunky and difficult to navigate based on their personal experiences. Participants questioned why such systems are made so difficult and do not improve as quickly as those used by other organisations. This raised questions around competence and therefore drivers of trust. It should also be noted that some participants had noticed an improvement in such services in recent years. 

7.4.2 In relation to experience drivers: 

Making it easier to receive direct support from HMRC. Even in cases where participants achieved their desired outcome from interacting with HMRC, many participants described this to be more difficult than it should have been. Participants questioned why this is, when support received from other organisations as a customer are better, particularly in terms of key experiential drivers of trust. 

8. Reference List 

Muehlbacher, S., Kirchler, E. and Schwarzenberger, H. (2011), “Voluntary versus enforced tax compliance: Empirical evidence for the “slippery slope” framework”, European Journal of Law and Economics, Vol. 32 No. 1, pages. 89 to 97