Nanny knows best

A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid.’ (Cass R Sunstein and Richard H Thaler (2008), ‘Nudge: Improving Decisions about Health, Wealth and Happiness’)

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The plastic bag tax (as everyone calls it) came in England a couple of weeks ago. The charge is ‘to protect our environment from litter and pollution’ as explained in the gripping DEFRA video.

The 5p levy is on ‘single use carrier bags’ provided by major retailers. A ‘single use carrier bag’ is defined in the Single Use Carrier Bag Charges (England) Order 2015 (19 pages) as an unused bag made of synthetic or semi-synthetic material made from polyamide, polyethylene, polylactic acid, polyvinyl chloride or other polymer, or any combination of polymers, the thickness of which is not greater than 70 microns with a handle, other than an excluded bag. So now you know and, remember, some poor soul had to draft it.

Of course, there are exceptions. For example, you still get a free bag when you buy live ‘aquatic creatures’ or an unwrapped axe or collect your dry-cleaning. I can understand the fish and the blades but why dry-cleaning? Why are corner shops and airport shoppers exempt? Either plastic bags are a menace to the planet or they’re not.

I’m not a climate change denier nor do I have a bumper sticker saying ‘Nuke the blue whale’ but I do resent being prodded into doing what Nanny wants. I’ve been recycling carrier bags for years, but then, I’m from Yorkshire, and we never waste anything. My best friend from school reuses teabags and my mum has a wonderful collection of plastic yogurt pots that she grows plants in.

While I’m on the subject of influencing behaviour, according to a recent article on Accounting Web, HMRC has been sending so-called ‘nudge’ letters directly to people involved in tax disputes.

The Behavioural Insights Team, known unofficially as the ‘Nudge Unit’, was set up in 2010 to try to improve government policy and services as well as to save the government money. Originally a team within the Cabinet Office, it’s now a social purpose company, Behavioural Insights Limited, partly owned by the Cabinet Office. The Chief Executive is David Halpern, a behavioural psychologist and civil servant which is, to me, a truly Orwellian combination.

Critics of the Nudge Unit, such as Claire Fox of the Institute of Ideas and sociologist Frank Furedi, suggest that by embracing nudge theory policymakers have given up on debate and argument and opted instead for covert manipulation.

Apparently the letters to those who have the temerity to challenge HMRC’s view mention HMRC’s 80% success rate at the tribunal, allude to the potential bad publicity stemming from a negative tribunal decision and remind the reader that HMRC is ‘ready to help’ if the taxpayer wishes to resolve the dispute.

A nudge or a shove — what do you think?

‘Inside the Nudge Unit: How small changes can make a big difference’ by David Halpern was published on 28 August and may be essential reading for us lab rats.

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Original article: http://www.annlhumphrey.com/general-tax/plastic-bag-tax-and-hmrc-letters-tax-disputes/

Ann Humphrey is a tax solicitor based in the UK who specialises in Stamp Duty Land Tax (SDLT), VAT and Business Tax. If you wish to find out more about Ann please visit her website.

Website: http://www.annlhumphrey.com

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