While attention has been paid to news about smoking and organ donor policies coming out of the new British government’s “Nudge unit,” there is also word out about plans to experiment with ways to boost tax compliance.
Today, Mr Letwin has also announced that the Behavioural Insight Team is working with HMRC to encourage people to pay their tax bills on time, helping to save the tax payer money and preventing the need to take tougher action. The trials will test the effects of: people’s general preference for keeping in step with their peers (most of whom will have paid their tax); reciprocity (by drawing attention to the vital services paid for by people’s tax payments); and loss aversion (taking action to avoid the increasing costs of leaving tax bills unpaid). The trials will start in February.
More details on the plans are here.