Tax advice is everywhere online.

From social media videos promising “easy tax savings” to posts claiming you can reduce your tax bill with a simple trick, it can be difficult to know what is genuine and what could get you into trouble.

HMRC has warned that some online tax advice can be misleading. Financial influencers, often known as “finfluencers”, may present tax ideas as quick wins without explaining the rules, conditions or risks involved.

The problem is that following bad tax advice does not usually mean someone else is responsible if things go wrong. You are ultimately responsible for making sure the right amount of tax is paid.

So, how can you spot potentially bad tax advice?

1. Be careful with “quick tax hacks”

One of the biggest warning signs is advice that sounds too easy.

For example, you might see claims such as:

• “Pay no tax on this income”
• “Get thousands back from HMRC”
• “Everyone can claim this expense”
• “This simple trick can reduce your tax bill”
• “You don’t need to declare this income”

Tax rules are rarely that simple.

Whether you can claim a particular relief, expense or tax treatment will depend on your individual circumstances and the relevant HMRC rules.

Before acting on advice from social media, check whether the information comes from a reliable source and whether it actually applies to you.

2. Understand how you are being paid

If you are employed, working through an agency or using an umbrella company, take a close look at your payslip.

Your payslip should help you understand your gross pay, deductions and the amount you actually receive.

Be cautious if:

• You receive more money in your bank account than appears to be explained by your payslip.
• Part of your income is described as a loan or capital payment.
• You are receiving payments that appear to be untaxed.
• Someone tells you that part of your salary does not need to be reported for tax purposes.
• The payment arrangement is difficult to understand.

These can be warning signs that a tax arrangement may not be as straightforward as it appears.

3. Be particularly careful with tax avoidance schemes

Tax avoidance arrangements can be presented as legitimate ways to reduce your tax bill.

Some arrangements involve artificial transactions that have little genuine commercial purpose and are designed mainly to create a tax advantage.

Getting involved in a tax avoidance scheme can result in you having to pay the tax that should have been paid, together with interest and potentially penalties.

A scheme being advertised as “HMRC compliant”, “legal” or “approved” should not automatically convince you that it is suitable.

If someone is promising an unusually large tax saving with very little risk, take a step back and check the details before agreeing to anything.

4. Check your umbrella company carefully

Many temporary workers and contractors are employed through umbrella companies.

An umbrella company generally employs and pays the worker, while the recruitment agency finds the work.

If you are paid through an umbrella company, don’t simply look at the amount that reaches your bank account. Check your payslip and make sure you understand:

• Your gross pay
• Income Tax deductions
• National Insurance contributions
• Any pension deductions
• Other payments or deductions
• The amount being paid to you

Be particularly cautious if your take-home pay appears unusually high or if you are told that part of your earnings will be paid through an untaxed arrangement.

HMRC provides tools and guidance that workers can use to check their tax and National Insurance deductions.

5. Don’t assume a tax adviser is responsible for everything

Using an accountant, tax adviser or another professional can make dealing with tax much easier.

However, appointing someone to handle your tax affairs does not remove your responsibility to make sure the information submitted to HMRC is correct.

This is why it is important to understand what you are signing or submitting.

If an adviser suggests something that you do not understand, ask questions.

A professional should be able to explain:

• Why a particular tax treatment is being used
• What rules it relies on
• What information they need from you
• What risks or conditions apply

If you are being pressured to agree quickly without being given a clear explanation, that is a reason to stop and investigate further.

6. Be cautious with tax refund companies

Tax refund companies often advertise their services to people who may be entitled to claim tax relief on certain expenses.

Using a company can seem convenient, but remember that they may charge a fee or take a percentage of the refund.

In some situations, you may be able to check your eligibility and make the claim yourself through HMRC.

Before paying someone to make a claim, ask yourself:

Do I actually need someone to do this for me?

Check the HMRC guidance first and understand whether you qualify for the relief.

If you are eligible and can make the claim yourself, you may be able to keep the full amount of the repayment rather than paying a fee to a third party.

7. Don’t rely on social media alone

Social media can be useful for learning about tax, but a short video or post rarely provides the full picture.

A creator might explain a genuine tax rule but leave out an important condition.

For example, a tax relief might only be available to certain taxpayers, for particular expenses or when specific requirements are met.

Before acting on something you see online, check the information against official HMRC guidance or speak to a qualified tax professional.

8. Ask questions before taking action

Good tax advice should not leave you more confused about your tax position.

If someone recommends a tax strategy, ask:

1. Why does this apply to me?

2. Which HMRC rules support it?

3. What are the risks?

4. What happens if HMRC disagrees with the treatment?

5. Will I need to pay additional tax, interest or penalties if the arrangement is challenged?

If you cannot get a straightforward answer, don’t rush into the arrangement.

What should you do if you think you’ve received bad tax advice?

If you believe you may have become involved in a tax avoidance scheme or have concerns about an arrangement, don’t ignore it.

Get professional advice and consider contacting HMRC as soon as possible.

HMRC also provides routes for reporting tax avoidance schemes and people promoting them.

Acting early can give you more opportunity to understand your position and take appropriate steps.

Final Thoughts

Good tax planning is about understanding the rules and applying them correctly not looking for shortcuts.

A tax-saving idea that works for one person may not work for someone else. Your income, employment status, business activities and personal circumstances can all affect your tax position.

So, the next time you see a post promising an “easy tax saving”, don’t act immediately.

Check the rules. Ask questions. Look at the numbers. And if you’re unsure, get professional tax advice.

When it comes to tax, if something sounds too good to be true, it deserves a closer look.

Disclaimer

This article is for general information only and does not constitute tax or financial advice. UK tax rules can change and the correct treatment depends on individual circumstances. Always check the latest HMRC guidance or seek professional advice before making a tax decision.