Archive for January, 2013

h1

Consultations in hiding?

January 31, 2013

Did you know the Government Digital Service has a blog?  Well, yes, all right, a better question might be did you know there actually WAS a Government Digital Service…

Ahem… well, anyway their latest blog entry describes how they improve their services by using, amongst other things, remote user testing, or in plain English, by getting people to use their pages whilst logged on to some kind of key logging thing that lets them examine how people muddle through finding the stuff they want.  And what did they find?

Users did, however, struggle to find consultations on the site. Users didn’t understand where to start looking, or under what navigation heading it would be listed. This issue was also picked up in the face-to-face lab testing, so it was quickly addressed by the product team and a solution is now undergoing further testing.

(Pause for another round of the “told you so” dance)

Because, in case the Government Digital Service hadn’t already noticed, the House of Lords Secondary Legislation Scrutiny Committee have already asked for an urgent review of government consultation policy, and suggested (para 11) that a 21st Century government ought to be able to produce a single website listing open consultations in the order in which they close.

Is that the “solution” now undergoing “further testing”?  Somehow, I’m not holding my breath just yet.

Posted in Consultation | Tagged , , , | Leave a Comment »

h1

In which I am grumpy and middle aged about the government’s ability to manage the consultation process

January 28, 2013

Anything happening?

Have the Treasury updated the tax tracker since December 7th?

Erm… that’d be a “no“.

Has the government decided to follow the advice of the House of Lords Secondary Legislation Scrutiny Committee and appoint someone like the NAO to undertake an urgent review of their changes to consultation policy?

Erm… that’d be the people who accused them of “sneaking” their consultations out just before long holidays?  Unlikely.

If they DO decide to review the changes, are they planning on meeting the House of Lords suggested deadline of reporting by Easter?

“We believe that the process needs to be reviewed urgently.  We are calling for the review to be done by an independent organisation such as the National Audit Office, and for the outcome of the review to be published by Easter.”

Erm… given it’s practically the end of January now and Easter is in, what, 61 days (and that’s calendar days, not working days) I leave that question for discussion.  Please use one side of the paper only, and be careful to show your workings in full.

Posted in Consultation, HMT | Tagged , , , , | Leave a Comment »

h1

Where’s Wally?

January 21, 2013

OK then, Christmas well and truly over, New Year thoroughly bedded in, off with the onesies and on with the back-to-work trousers; what’s happening in the wonderful world of tax consultations?

Well, erm, I’m not really sure.  The Treasury’s tax tracker page is a mess, with a heading “Tax consultation tracker (2012)” above a link that looks as if it’s going to be a link to the tracker but actually leads to a previous version of the same web page: Tax updates and consultations tracker 2011

The last actual tax tracker I can find is the one published on 7 December last year (here’s the link) and it shows, erm, none.  Well, none that are actually open, that is.

The HMRC “current consultations” page is a bit better – if you can find it, that is (go to the HMRC main page, search for “consultations” and then scroll down till you find the link that says “current consultations” – under the heading “Details of consultations launched since May 2010 can be found in the following sections”.

(There are two, but they both close in March so we’ll come back to them later)

The Treasury site, actually, is a bit easier to navigate if you were coming at it from no knowledge except a desire to see what consultations were out there.  Go to their front page and there’s a link in the sidebar on the left to “consultations and legislation”

So nothing much doing, you might think?

Well, erm… you’d be wrong.  Because the according to this Written Ministerial Statement  the entire 2013 Finance Bill is up for technical consultation until February 6th.  Not “is this a good idea” consultation, you understand, just a “does this work the way we think it does, and by the way can you spot any typos we’ve missed” consultation.  Not that anyone who doesn’t take a policy-wonk interest in the Finance Bill consultation is likely to have the proverbial snowflake’s chance of finding it, however!

Speaking of which… did anyone happen to notice the House of Lords’ Secondary Legislation Scrutiny Committee issued their report and recommendations after their oral evidence session with Oliver Letwin?  And, oh look at paragraph 11 where they urge the government

to introduce, as soon as possible, a single website listing open consultations in the order in which they close (paragraph 54).

And, oh go on, look at paragraph 54.  Which says

54. Wendy Bradley noted that there is no central source of information on what consultations are scheduled, open or coming to an end: “in the 21st century it should be possible for the government to have a single website listing its open consultations in the order in which they close. This would, for example, enable someone going on holiday for a fortnight to be assured that an issue vital to them wasn’t going to be decided in their absence.” We consider that this would be a significant contribution to improving the overall efficiency of the consultation process, and we urge the Government to introduce such a website as soon as possible. It would also provide a useful to tool to Departments to enable them better to co-ordinate consultations on similar subjects.

[Pause for a quiet rendition of the “told you so” dance]

Posted in Consultation | Tagged , | 3 Comments »

h1

One point one billion

January 9, 2013

The coalition government doesn’t like the additional income tax rate of 50% on people with incomes of more than £150,000 a year. It says that the previous government’s estimates of the yield were wrong and published a detailed paper reviewing the actual amounts raised, to support its argument that the rate should be reduced from April.

The detailed report is here and if you will be kind enough to turn to page 39 and look at table 5.3 you will see that the adjusted figure for yield in 2010/11 is £1.1 billion.

In other words, if I’m reading it right, the government says that the additional rate didn’t bring in the five or so billion that Labour had suggested, but it did bring in £1.1 billion.  The conclusion (paragraph 5.64 on page 45) agrees:

Although the estimates are subject to a wide range of uncertainty, they suggest that the underlying yield is much lower than originally forecast, possibly only raising £1 billion at most.

Now, there was some comment yesterday during the debate on the Welfare Uprating Bill, because the Impact Assessment hadn’t been published till a couple of hours before the debate, so the information in it couldn’t really be used to inform the discussion.

Let’s look at it now, shall we?  Here it is: and, oh look!  Here’s what it says about the yield (the amount of money the government will “save” by not uprating benefits to keep pace with inflation)

Overall, it is estimated that savings to the Government from up-rating certain benefits by 1 per cent rather than by the CPI inflation rate, will be around £1.1 bn in 2014/15 and £1.9bn in 2015/16 in cash terms.  The savings will continue into the future and gradually increase in cash terms.

Of course it’s not a straightforward comparison – if it were, would even this coalition think that spending £1.1 bn on tax breaks for those earning over £150k was so important they’d take £1.1bn off of people working in low paid jobs and earning tax credits to pay for it… would they?  The £1.1bn from the top rate tax is the adjusted estimated total yield from the tax and not the total estimated reduction in tax take due from reducing the rate.  But if you look here at the tax information and impact note for the rate change you’ll see that the government aren’t really sure what the effect of reducing the rate will be, which is of course entirely in tune with their argument that we aren’t really sure what the tax brings in in the first place.

The impact assessment, of course, is a tool of evidence-based policy-making, and on these documents the evidence looks a bit uncertain to me.  Is the argument made?  Time will tell.

But in cash terms, what we seem to be talking about is whether incentivising the 300,000 people who pay additional rate income tax by giving them a tax cut of five p in the pound for their income over 150k is more important – more useful to  society?  More likely to get the economy moving?  More just?  More fair?  More… civilised?  Than taking it from people on job seekers allowance because there are no jobs, or on working tax credit because the jobs that exist are low paid?  It seems to be a question of priorities rather than evidence.

Posted in Bit of politics | Tagged , , , , | Leave a Comment »

h1

Guest Post: The Honest (White) Collar

January 7, 2013

This is a guest post by FTD the barrister and author behind the forthedefence.org blog.

With much fanfare this week Her Majesty’s Revenue & Customs announced their top thirty two tax cheats of 2012. Reminiscent of ‘America’s Most Wanted’ the mug shots of these ‘tax cheats’ was shown on television, in the newspapers and has been widely publicised on the internet.

If you missed it: http://www.flickr.com/photos/hmrcgovuk/sets/72157632409515581

I don’t like it. I don’t like it because it’s crass and tabloid.

And, I don’t like it because I’m proved right.

In 2005, I was a law student and in the early part of the year the Inland Revenue was merged with HM Revenue & Customs to become HMRC. I remember writing a scathing essay about how the ‘co-op culture’ of the Inland Revenue was incompatible with the ‘cop culture’ of Customs.

Combine that with the prospect of staff being moved over to the Serious Organised Crime Agency on the horizon and it was all getting a little culturally confusing.

Traditionally…

England and Wales have had three ‘law enforcement’ agencies to deal with as individuals. The police, the revenue and customs.

Of those, the most ‘enforcement’ driven was customs. Customs for centuries have raised billions of £s for the treasury by enforcing the law with regard to import and export. They have very little protective function and a very high enforcement function.

If you ask the older wigs around Temple what Customs were like, they will tell you some stories. If you were against a dodgy customs officer then they put a bent copper in the shade.

Remember, the police are still tethered (although pulling) to a leash: policing by consent. British sensibilities would never allow a police force which was full enforcement orientated. Comparatively, Customs were set up with no such leash, they had a job, catch the rum smugglers etc, extract the duties owing.

Of course, not everyone tries to smuggle dodgy gin, or commits criminal offences – but, everyone does pay taxes. So, at the other end of the scale was the Inland Revenue. An enforcement agency to an extent, but an agency which tried to co-operate with the tax payer to obtain dues owing.

My fear was always that customs culture would overwhelm the co-operative culture of the Inland Revenue.

By example, prior to 2006, today’s advertised top taxcrims would have been dealt with by:

Operation Inertia – MTIC fraud (VAT) – would have been a Customs job.

Operation Hippolamp – Tobacco duty evasion –  would have been a Customs job.

Operation Recuprical – Tax fraud –  Inland Revenue (possibly police)

Operation Reinforce – Import duty evasion would have been a Customs job.

Operation Rust – Alcohol duty evasion – would have been a Customs job.

Operation Tulipbox – VAT fraud – would have been a Customs job.

Operation Snowbank – Duty evasion – would have been a Customs job.

Operation Tousle 95 – Tobacco duty evasion – would have been a Customs job.

Operation Hazel Lamp – Tobacco duty evasion – would have been a Customs job.

Operation Vara – Import duty evasion – would have been a Customs job.

… should have been a customs job.

Clearly this latest piece of HMRC PR is a customs job. And, combined with the eyes. yes, you’ve all seen the ‘undeclared income eyes’ on bill boards, the tube, the train on the sides of buses.

It would seem to me that customs culture has won out. Combat don’t co-operate. The days of Moira Stuart, the cartoon of the Revenue man in the bowler hat: tax doesn’t have to be taxing are gone.

Culturally

Why do I say it’s wrong? I don’t know the figures, whether enforcement or co-operation are better. But, what I do know is that a culture of enforcement rather than co-operation widens the caste of people who are to be potentially criminalised, not only is that crass, it’s wrong.

It’s all too us and them, the Government suspects everyone, suspects we’re all at the tax dodge. Forget the fact that most of you pay your taxes PAYE.

People are less likely to be open with HMRC if they think they are a suspect rather than a customer. Afterall, to coin a phrase which all coppers love to hate, ‘my taxes pay your wages mate.’

FTD

Visit forthedefence.org for more blog posts about criminal justice today in the UK.

 

Posted in Avoidance, HMRC, Regulation | 5 Comments »

h1

Post 101

January 2, 2013

I see that I made 100 posts to this blog in 2012 – a profound thank you to anyone who made it through all hundred with me, and welcome to the next 100!

So now, in the spirit of the season, here is my New Year’s Wish List for the tax changes I’d like to see in 2013 – does anyone know when the window for Budget Representations opens this year?  The Budget will be on March 20th and there’s usually a few weeks beforehand when you can send in your ideas.  Anyone with more or better ideas, please add them in comments.

1. Abolish tax relief for private schools 

Because, seriously, how can we possibly justify giving tax relief to Eton College with its hundred million of investments  when the state school of which I’m governor can’t afford to get the windows fixed in the classroom with the damp problem?

2. Employ 150 lawyers to litigate the HMRC backlog

As ARC proposes:

Additional legal resources, 150 trained lawyers and 50 legal assistants, to accelerate litigation of the Tribunal backlog and accelerate yield. Cost £35m. Projected yield £2000m.

which seems to me a no-brainer.

3. Abolish the concept of domicile and move to worldwide taxation on the US model

The US system starts by taxing all its citizens on the basis of their worldwide income.  But then it goes on to tax all the people who are resident in the US on their income generated within the US.  This seems to me to be eminently sensible and if you agree with me, please add it to your own Budget representation.

4. Stop messing with AIA (annual investment allowance) and set it at 100,000 permanently

Or, really, just pick a number and stick with it.  

5. Shift tax thresholds up

Because, come on, no-one on minimum wage should pay tax, and no-one on less than 60k is “higher paid”.  Seriously.

6. Remove the difference between revenue and capital tax rates

Or, in other words, cut out areas of manipulation and avoidance by making the tax rates for income tax, capital gains tax and corporation tax the same – with the same thresholds.

7. Show some backbone over employment and self-employment

This probably needs a longer post, but honestly you’re never going to get agreement on what constitutes a contract OF employment or a contract FOR employment.  So get together a Royal Commission to devise two standard contracts that cover tax, NI, H&S… and make it a simple binary.  Are you on a version of contract A (employment) or contract B (self employment).

8. Show some backbone on the mansion tax

The main argument against charging an annual tax on people with homes worth over £2m seems to be that it would need an expensive new revaluation of the entire domestic property market.  Erm… why?  Charge the tax on anything valued over £2m the last time they were valued, and on anything that changed hands for more than £2m since then.  There.  Job done.  You’re welcome.

9. Make your mind up whether people are individuals or family members

And hurry up about it, because having a tax system that works on an individual basis (unless you get tax credits or child benefit) and a credit that works on a family basis (because Universal Credit is coming) is a recipe for disaster.  And, hint, people are individuals.  The child benefit is for the child – the clue is in the name – so they should get it whether their parents earn fourpence or four million.  But it should, of course, be a criminal offence not to spend it ON the child.

10. Look up “insurance”

And, particularly, “National Insurance” – and then read this article about care for the elderly.  And then extract digit and get on with it.

Posted in Bit of politics | 3 Comments »