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Happy Easter

April 18, 2014

Quiet, isn’t it?  I’m off for a few days at a convention in my other persona, in pursuit of science fiction.  After I am done living in the future I will catch up with the outstanding tax consultations in a week or two.  Play nicely while I’m gone!

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Women’s Budget Group reports

April 15, 2014

I had the unusual experience this year of watching the Budget at the LSE alongside a group of other feminist academics from around the country.  After we had watched the speech and discussed our first reactions, we split up the Budget according to our various specialisms and went off to do some rather fuller analysis than the insta-punditry that was going on in the papers.

You may have your own views on whether it’s better to hit the reporting cycle while the Budget itself is still news, or to think about it for a bit longer and come up with a reasoned response.  Personally I think you have to do both, but anyway, here’s the advert: the Women’s Budget Group analysis of this year’s Budget can be found here.

(Which bits, if any, were written by me, I leave as an exercise for the class!)

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Bounty

April 7, 2014

I was surprised to read in a new piece about Bounty (the organisation that distributes those “bounty” packs to new mothers) that HMRC are still paying them – a commercial company – £90,000 a year to distribute child benefit application forms.  Didn’t we deal with this?  The Telegraph investigated it last May and there was a petition against the practice of the company being allowed to visit maternity units at all but at the same time a call to email David Gauke asking him to end HMRC’s relationship with Bounty (scroll down to the comments).

I have no knowledge of whether the “Bounty” packs are a good thing or not (except that I never realised “bounty” was the name of a commercial company – I had heard the term “bounty pack” for years and had taken it for its literal meaning of  a bonus or gift – I thought they were the NHS’ gift to newborns!)  But I am pretty certain that giving a commercial firm legitimacy by allowing them to distribute child benefit forms is a bad thing.  Don’t get me wrong, they can add them to the packs if they like – but they’re a commercial company.  It should be up to them to decide whether or not they want to obtain supplies of the forms from HMRC and stick them in the packs.  HMRC shouldn’t be giving them ninety grand of our money for doing so.  Give the responsibility instead to registrars; there shouldn’t be any need for one arm of the government to pay another arm of the government for doing something desirable in the first place, should there?  Isn’t THAT what we mean by “joined up government”?  So when someone comes to register a birth they should automatically be handed a form to apply for child benefit.  In fact, if we’re in “tell us once” mode, why can’t a registered birth also be a registered claim for a universal benefit?

Just a thought!

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Slow but sure

April 2, 2014

Remember the complaint that was settled on 24th March with an offer of £25 compensation? The cheque arrived this morning, eight working days later.

Is that good, or is it a bit much? The cheque is actually dated 25/3 so it doesn’t look like delay by the complaint handler but merely another example of HMRC’s notoriously labyrinthine mail system.

So tell me. Is that a long time, or have we just got used to waiting a fortnight and feeling lucky if it’s less?

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Demerger

April 1, 2014

Today, some interesting rumours reach me of proposals to de-merge HMRC and restore the historic brands of HM Inland Revenue and HM Customs and Excise.  I hear that the proposals, which are to go out to consultation in the next few months, will also include a clever exit from the once-controversial Mapeley contract and a move out of leased and into properties owned by the taxpayer, saving millions in rent and services payment and creating several thousand jobs in providing building and other services direct by newly-appointed staff who will also be available to perform “back office” functions at times of need.

The de-merger will also herald the de-industrialisation of tax, as both restored departments return to a local office structure.  The main change that taxpayers will see is that they will once more be able to speak to someone, face to face or over the phone, who actually knows what they are talking about, will give their name, extension number and email address, and will then take responsibility for working an issue through to its conclusion.

I hear that the de-merger will come with a hefty staffing and budget increase, to be paid for by the expected rise in collection and compliance yield and narrowing of the tax gap.  There is also likely to be a new task force bringing long-standing disputes to a conclusion via rapid litigation, following which the task force will direct its expertise into prosecution of all tax offences resulting from the new alignment of prosecution thresholds for tax, customs, excise and benefit cases.

Whether the coalition can bring this off in time before the election is, of course, in considerable doubt, but I hear that the timetable is

May 2014 consultation

July 2014 consultation ends.  Enabling legislation passed

September 2014 contracts signed for new local office accommodation

December 2014 first District Inspectors appointed and begin appointment of supporting staff

February 2015 New offices occupied and shadow operations begin while skeleton staff winds down the last of HMRC operations

1st April 2015: New IR and New C&E begin operations.

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Catching up

March 24, 2014

So I got my tax repayment on Friday, so I don’t have to spend the day on the phone tomorrow following up on my “chase repayment” phone call.  Well, I say I got my repayment – I got the money in my bank account, and the paperwork will (presumably) follow?  All I’ve had so far is a bill for the trivial amount of tax for 2012-13 which they had automatically repaid when I put in my return, which has presumably been paid from the rather larger amount they have repaid from the carry back of losses to 2011-12 which they have now actioned.  But, fair’s fair, if it’s a choice between getting the money and getting the paperwork, I know which one I’d prioritise.

And then there is my complaint…

I made a complaint.  HMRC grudgingly agreed I was correct (or at least that they wouldn’t try to collect the disputed amount) and then tried to collect the disputed amount via my tax code anyway.  So I had to make a second complaint.

Now I have a letter from the same complaint handler as the first time, apologising for the incorrect code and offering me £25 compensation.  Again, I haven’t had either the £25 or the revised coding notice.  But, again, it’s a timing issue and I’m prepared to believe they mean it this time.

But, be careful out there!

 

*edited Monday lunchtime 24 March 2014.  The postman called… and brought me my new tax code.  And it’s right!  Hurrah!  Well done complaints handler!

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More competitive, simpler, greener and fairer.

March 20, 2014

After the election, the Tories and the LibDems got together and agreed on a programme of what they would actually do together in government.  On taxes, they agreed their priorities were to make taxes simpler, fairer, greener and more competitive.

So how did yesterday’s Budget move them towards those objectives?

More competitive

Can we just kick this one into touch now please?  According to the back of my envelope, the budget is giving away £920 million next year on measures tagged with “investment and growth” (table 2.1) when, by the World Bank and Bloomberg‘s methodology we’re in the top ten places to do business and well placed in KPMG’s tax competitiveness survey.  So let’s say, yes, we’ve DONE this one, and stop throwing money at it?  Please?

Simpler

Is the Budget going to make taxes any simpler?  Well, pensions and savings maybe – insofar as big chunks of them won’t BE taxed.  But in general?  OOTLAR (the inelegantly named “Overview of Tax, Legislation and Rates” document) has only seven instances of use of the words “simple” or “simpler”:

  • In a reference to the revalorisation of the VAT registration limit, commenting that this and the “simpler” income tax cash basis will help SMEs
  • In talking about the processes banks and building societies already have in place for savings, in claiming the abolition of the starting rate for savers won’t have much of an impact on banks’ processes.
  • In the general measure to let governments give tax exemptions for future sporting events without having to go through the rigmarole of passing specific legislation like they did for the Olympics and the Champions League Finals.
  • In a claim that “Chargeable gains roll-over relief: reinvestment in intangible fixed asset”  (sic: what, only one?) “makes the tax system fairer and simpler by clarifying the current legislation.” Uhuh.
  • Twice in “Modernising the taxation of corporate debt and derivative contracts” where it is claimed that the change to de-grouping rules “supports the Government’s objective of establishing a simpler, more certain and more robust tax system”.  Well, I feel much better for that.  You?
  • In the change to the ISA rules, so you don’t have to decide whether it’s better to have a few quid in a cash ISA or a few more in a stocks and shares one.

I mean, I’ll give you the last one, and I appreciate there’s some stuff coming out of the OTS so I think on the whole I’ll mark this one as “some progress; more to be done”.

Greener

Stop laughing at the back!

The “green” elements of the tax system are mostly around fuel duty, and it’s coming up to an election year, so you couldn’t expect the government to carry on with any of “that green crap”, now, could you?  Section 2.27 et seq in the actual Budget document, under the heading for spending on “Energy and Environment” is just embarrassing: 140 million extra on flood defences, granted, and £200 million on potholes but 2.31, 2.32 and 2.33 are laughable.  The government “welcomes announcements”, “has agreed” someone else will “set out plans for how they will help”, and “welcomes announcements by the vast majority of suppliers…”

No.  Green measures are definitely marked “see me” in red ink.

Fairer 

The thing is, if you’ve got a bit of money, then it actually does seem like a fair budget.  You can earn a bit more and save a bit more without faffing about with tax, you can do more with your pension than buying a bog-standard annuity, and you’re not going to have to pay more for petrol and beer.

But what if you haven’t got a bit of money to start with?  What if you haven’t just not got £15,000 a year to save in an ISA but you haven’t even got £15,000 a year AT ALL?  What if you haven’t got a job, or haven’t got enough hours, or you’re on a zero hours contract or you have a disability or are a carer?

Well you’ll be under the cap.  Because while there’s no limit on the amount of money you can accumulate in profits or rents or inherited wealth, and no-one is going to tax you on the money you make just from having stuff that accumulates in value, not even when you die and pass it on in their silver spoons to your children.

But if you haven’t…

… if you haven’t, well, there’s going to be a fixed amount of money.  Fixed like a granite slab over the heads of the ordinary, poor or unlucky; regardless of how many of us there are, or what changes in circumstances might have pushed us under.  And once you’re under, well, the cap fixes the amount we can share out.  Let’s fight it out amongst themselves.   I warn you not to be ordinary.

Sorry George, but beer and bingo aren’t going to distract us from noticing.  Fairness – must try harder.

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