Workers of the world…

April 1, 2023

Disappointingly there was nothing in the Budget about the vexed issues of IR35 or of the rights and responsibilities of “workers”: those people with the intermediate status, neither employed nor self-employed but working gig to gig. Fortunately there has been a great deal of work going on behind the scenes and I am, today, in a position exclusively to announce that the problem has been solved.

The solution, of course, was there all along. The CIS (Construction Industry Scheme) bypasses status issues by the simple trick of letting HMRC determine the status of subcontractors. They are either paid gross or net. The contractor who pays them just has to find out which, and they can do that by getting HMRC to tell them. It was a bit laborious to set up, but it’s now pretty well understood across the industry and seems to work pretty well.

So why should it just apply to the construction industry? It’s illogical and, you could argue, discriminatory. (How many women hold CIS status decisions, eh?) I am able to reveal that the General Industry Tax Scheme, GITS, will now offer a simple solution to all the vexed issues of workers, contractors, and disguised employment.

Every individual, every business and every company will be paid under deduction of tax unless they can demonstrate they have permission to be paid otherwise. Payments will be made from special taxpay bank accounts. It will become a condition of a banking licence that such accounts are available to any individual or entity. Businesses will deposit money into the account and immediately 37.5% will be deducted and paid over to the government. The remainder may be paid to any business or individual and no further tax will be payable by either the payer or recipient from this flow of funds.

Of course there will be considerable advantages to opting out of that system and this is where the GITS status decision comes in. A business which can demonstrate that it has paid its taxes in full on time for the previous six years will be eligible to apply for a decision that they are a Licensed GIT and thus may be paid gross.

The TIIN for the change shows a cash flow advantage to the government of seventeen billion over the next six years. And who could possibly argue with that?



July 21, 2022

I know, it’s been a while, sorry. Basically I took a break from bloggery during the pandemic, and then WordPress “improved” their site so much that I couldn’t fathom how to do any of the basics of posting. Bear with me. I have things to say: hopefully I can start again to say them.


New publication

April 1, 2021

You may have wondered where Tiintax has been for these past few months. You might have wondered if, like many other people in lockdown, I was simply sitting stupefied in front of daytime tv while eating my own weight in Fortnum’s coffee creams.

Au contraire, I can now reveal that I have, in fact, been working on a Secret Project for the Treasury. I was contacted this time last year and offered a major project which I could work on from home as a freelance consultant. I had the advice of several stakeholders in HMRC and HMT and, after suitable secrecy oaths were administered, from external stakeholders in the accountancy and legal professions, three Eng Lit PhD candidates and much of #TaxTwitter.

The project involved a complete rewrite of the Taxes Acts into a format which is much simpler and pleasant to read but also has the advantage of using rhythm and rhyme to make the concept and detail easily accessible and memorable to the lay reader. I can announce that the result of the project is the publication next week of the entire UK tax code re-written in Hiawatha metre.

This involved many practical and ethical decisions of course: the initial draft of the first line went

Pay your fucking taxes, people!

There were several editorial meetings about the use of obscenity and the edited version went

Everybody, pay your taxes!

In the end, however, I took the editorial decision to avoid the second person so the bulk of the text avoids referring to the taxpayer directly and in a more neutral, non-judgemental mode the final version of the first line now reads

Everyone must pay their taxes.

This took several months, but once the initial parameters were agreed and the first few hundred lines whipped into shape I was largely left alone to get on with the writing, turning it in via a super secure Treasury terminal which had to be air lifted to Yorkshire and installed at dead of night in a purpose-built shed at the bottom of my garden.

I confess to a rather mischievous desire to see what I could get away with at times – none of the clauses in my contract obliged me to make the tax code shorter, only simpler and more comprehensible. So for example I am particularly pleased with some of the language in the VAT stanzas (which, much against my better judgement, take up approximately seventeen million lines of verse in their current form). An example might help illustrate the shape of the problem:

Is a Jaffa cake a biscuit?

Leave it on the table, test it.

Cakes go hard but biscuits soften.

VAT is charged on cakes – no, biscuits –

No, on both, except for chocolate

Biscuits (what a silly system!)

The inclusion of the writer’s commentary may be startling to the professional reader in the first instance, but I am confident that, when the general public find themselves able to read and understand tax legislation in plain English and find helpful signposting to the dafter elements, there will be little political interest in further obfuscation of the intent, option appraisal and impact assessment of tax legislation. TIINs will be much clearer and more informative in future and indeed the second edition of The Lay of British Taxes may be several – perhaps many! – volumes shorter than the first.

All 437 volumes are available to purchase from next week, at a reasonable £38,500 for the complete set. (Disclaimer: I should reveal that I receive a royalty of approximately 1/42p per volume.) However a podcast of the entire work is available free of charge on the internet where various volumes are read by Benedict Cumberbatch, Stephen Fry, Helen Mirren, Lenny Henry, Rege-Jean Page and numerous other luminaries of stage and screen. The readings will also be broadcast as CBeebies bedtime stories for the next year and a half, in the hope of growing a new generation of informed and empowered citizen stakeholders.


Three’s a crowd

September 7, 2020

Today is the start of the Tax Research Network annual conference online. It’s also the tenth anniversary of the founding of the Office of Tax Simplification which they are celebrating with a webinar. And today the Public Accounts Committee is hearing evidence from HMRC on their work on the Tax Gap…

My question is, don’t these people talk to each other????

Me? Oh, I’m not logging on to any of them: I’m taking my mother for an X-ray. Let me know if I miss anything


Occam’s Capital Gains

August 11, 2020

The lovely people at the Office of Tax Simplification are looking at the administration of Capital Gains Tax. There was a scoping document here which included commitments to set up a consultative committee and to liaise closely with the Admin Burden Reduction Board. I hope they also plan to talk to some civilians? There is a Call for Evidence and a two part online survey but it’s not exactly the kind of stuff that makes the red tops. OTS asked for “high level” comments by, well, 10th August, but the call for evidence is open until October and they said on Twitter that they were open to slightly late “high level” comments too.

So, what are they thinking? The full call for evidence is long and tedious detailed, as – you might say – is the CGT tax regime itself.

My personal “high level” suggestion would be to do away with the lot of it at a stroke and combine income tax and capital gains tax. Why should there be different rules for capital and revenue, different allowances and reliefs? Why not tax all income and gains at the same rate on the same return and with the one single tax free allowance?

If you make a profit buying a teapot in a charity shop and selling it on ebay you need not report or pay tax on the profit unless your year’s ebay profits are over £1000 – HMRC wants to keep small traders (particularly if they are liable to make irritating losses) out of the self assessment system and out of their hair. Why not have a unitary system: if you sell your grandmother’s teapot – inherited, so not a trading item – how about you don’t have to pay any tax on that unless you sell it for more than £1000?

Except, oh look, there’s already a CGT “chattels exemption” if you sell tangible objects like teapots. You don’t have to pay CGT on them unless you sell them for more than £6000. Why a thousand for IT and six for CGT? Pick a number and stick with it, I say.

How about this? One tax-free allowance, and one rate of tax, applying to all profits and gains whether capital, revenue or wobbling somewhere in between? One de minimis amount, so everyone knows you don’t have to bother with the teapot unless you sell it for £6k and you don’t have to bother with your profits from internet selling of the china you bought at the car boot sale till you hit £6k either.

Shares and such like? All gains taxable, no losses allowable, no admin because it’s deducted at source (like bank interest used to be)… and what about family farms and company gains and housing…

The problem with tax simplification is if you start by asking tax specialists about it you start from a place of complexity, exception and exemption. Start with some citizen juries and run some scenarios past them and see how they feel about the principle: then ask the tax professionals to make it work.




Light bulb

February 6, 2020

Expiry date: midnight on 7 February 2020

Time is tight, but if you are carrying around a LIGHT BULB moment of inspiration about the tax system, well, you have a chance to get it to the right people.

Yes, it’s that time of year again, when the Budget Submissions Window is open, which is when the Treasury opens itself to ideas from all and sundry about what should be in the March Budget.

No, don’t get too excited. It takes the form of a nasty cheapskate little “survey” window you can find here – and I have to say I don’t recommend this, as the one year I tried it they swore blind they’d never received my suggestion, there were no records of what suggestions had been received through the portal, and go away peasant (I paraphrase). You can also send your suggestion in an email to Budget.Representations@hmtreasury.gov.uk which at least has the benefit of leaving you with some evidence of what you said and when you said it.

Don’t get too excited, though. Although the Treasury may say

HM Treasury welcomes representations as part of the policy-making process. The views of stakeholders are gratefully received.

I wouldn’t get too invested in telling them how to change the world. If you are an MP then OK, a Minister might get to read your idea. If you represent an accountancy body or another “stakeholder” then, yes, your stuff will be read and summarised for the Minister. If you’re a tax muggle? You know, an ordinary member of the public, a Citizen Stakeholder? Your idea will be added to a list that’s looked at by… well, someone. You won’t get a reply. Because who really cares what the Citizen Stakeholder might want?


New Year, New TIIN, Same Old Rubbish

January 14, 2020

We’ve all read Dominic Cummings’ blog post about recruiting weirdoes and misfits into Number 10 and, yes, I’ve fantasised briefly about being one of them, stomping around in a Thick of It cloud of obscenities, demanding to know what the f**ing f**k people think they are playing at…

… with stuff like this, the TIIN for the new legislation on International Tax Enforcement.

Because it’s a piece of crap. HMRC are going to spend £7.7 million or so on the computer infrastructure for these new regs, and it will cost them another three and a half million or so a year to administer and enforce them.

They are expected to have a “significant” impact on businesses. What kind of businesses? What do we mean by “significant”?

This measure is expected to have a significant impact on businesses. HMRC is engaging with affected businesses and information gained through this process will contribute to further quantifying these costs. A fuller assessment of costs in relation to businesses will be made once the regulations have come into force.

Fuller than what, for fuck’s sake?

Will the legislation impact on small businesses? Will cross border activity by micro businesses be impacted, like it was when the VATMOSS saga was implemented to hit at multinationals and accidentally screwed a swathe of kitchen-table one-woman craft businesses? Who can say? (Well HMRC could have said, but I strongly suspect they haven’t bothered to worry their pretty little heads about it)

Well at least there will be some extra tax coming into the exchequer to validate all this quantified and unquantified administrative burden, right? I mean, right?

Exchequer impact (£m)

2019 to 2020 2020 to 2021 2021 to 2022 2022 to 2023 2023 to 2024 2024 to 2025

The Office for Budget Responsibility will include the impact of this measure in its forecast at the next fiscal event.

Yes, that’s a big fat blank line where under the heading, where the actual figures ought to be. In other words, we don’t know, we haven’t asked, and we’ll think about that tomorrow.

The point of doing an impact assessment or TIIN is not to annoy the policy team working on the subject, but to make better decisions by laying out the evidence in one place. Either do it right or don’t do it at all. But don’t do this.


Marking the government’s homework: the Brexit Impact Assessment

October 18, 2019

Impact assessment – no, don’t fall asleep yet – is a boring technical discipline. I know: I used to be the impact assessment specialist for HMRC and for all Treasury tax measures. The point is to regulate how governments regulate – the IA process is actually designed to be a brake or anchor on introducing new legislation. Supposedly you think through the impacts as you design the policy, so that by the time you get to the stage of introducing legislation you’ve already worked out the costs and benefits, got your stakeholders on side, and checked that you aren’t proposing anything that damages small businesses or has equality implications or offends against any other government priority. Actually in civil service terms it’s a fun job if you don’t mind a bit of unpopularity – you get to tell MUCH more senior people that they can’t ride their hobby horse till they fill in this form, and you get to play “my boss is senior to your boss” sometimes all the way up to the Minister’s private office, at which point they tell you to go away and come back when you’ve worked it all out.

So does the Brexit agreement need an impact assessment? Well, does it have an impact on businesses? Yes it does. Is that impact more than £5 million a year? The last draft showed an impact in the billions, so, yes. Can you get out of it by saying Brexit is self-evidently a good thing so a further impact assessment isn’t required? Er, no, that’s not how it works.
(Side note: just a thought, but did they actually negotiate this new agreement without knowing what the costs and benefits of each change might be?)
What can anyone do about it? Judicial review – governments have said publicly (for example this government, here in this document) that they’ll do impact assessments and under what circumstances.
…and here’s the catch. You can bring a judicial review on the grounds of “legitimate expectation” – citizens can expect governments to follow their own rules, and the courts can force them to go back and do their homework properly under those circumstances. But parliament trumps courts: if a change is legislated, you have to assume that parliament understood they hadn’t got the impact assessment they were entitled to expect but decided to do it anyway.
In other words, my reading of the situation is that if someone wanted to bring a judicial review this afternoon they might plausibly argue that parliament couldn’t reasonably vote on the Brexit deal without an updated impact assessment showing the projected costs and benefits. But when the courts close today it’s too late – if the agreement passes on Saturday, then the presumption is that the parliament that passed it knew what they were doing…

The Palace of Westminster

May 8, 2019

The government has published a “Government response to the report of the Joint Committee on the Draft Parliamentary Buildings (Restoration and Renewal) Bill

What’s this about? Well, essentially the Palace of Westminster – the building that houses the House of Lords, the House of Commons and various offices, chapels and halls – is falling down. It’s a fire risk, bits of it keep falling off and narrowly missing people, and it’s a warren of unsuitable spaces with rubbish access and facilities.

It’s also, apparently, a World Heritage Site (which seems bizarre to me as it was only built in the nineteenth century albeit on top of some medieval buildings and incorporating some remnants) but which means it can’t just be left to rot.

Have we really got between £3-6 BILLION to spend on a building, though, however historic?

Usually the government’s answer to anything expensive is to offload it. Why aren’t we preserving the building by flogging it off to someone else, in the way that the County Hall buildings opposite were preserved? Give it to a hotel group for a peppercorn and let them spend the money?

If you look at more modern parliament buildings like the Scottish Parliament or the EU Parliament they are arranged differently, usually in a semi circle to facilitate civilised discussion rather than the yah-boo-suckery of the two-sides-two-swords-lengths-apart Commons. They have microphones that work and electronic voting systems that don’t rely on parliamentarians being wheeled through the lobbies “sick bucket on lap and high on morphine

So here’s a thought. There’s a perfectly adequate set of offices and chambers across the square, at the 100 Parliament Street building that houses the Treasury and other assorted Departments.

Move Parliamentarians into that.

There’s also a tragically underused circular car park at the heart of the building. Use that to build a twenty-first century debating chamber. Don’t faff about commissioning a new design. There’s an 800 seat theatre in the round sitting in the middle of the Royal Exchange building in Manchester, built in 1976 for a million quid. It’s a proven design using proven technology. A million quid in 1976 is about, what, seven hundred million now. Appoint an architect to oversee the project and give them a fixed seven hundred million budget and a firm closing date, and let them get on with it.

The Treasury? Move it into the Foreign Office building next door. Move the Foreign Office into the next building down Whitehall and so on, till the unlucky (lucky?) losers get to move into the Lord Moon of the Mall pub at the end of the road.


Till we have faces

March 13, 2019

Brexit has sucked the life out of the last  three years of government and here we are, nothing done, no energy for doing.

Here’s a thought. If a jury can’t reach a conclusion there’s no dishonour in a re-trial. This Parliament will never agree on the May deal, a no deal, a people’s vote or any other possible outcome.

So let’s stop. Don’t ask the EU for a postponement, which would need the unanimous agreement of the other EU members and which they have already said would come with conditions. No: let’s withdraw Article 50 and then do it right.

Set up a Royal Commission to look at what Brexit means: we want from it, how we will act during any transition period and after, the risks and rewards. What May should have done after the election, essentially, so there’s cross party agreement. The Royal Commission should also take advice from a Citizens’ Jury, as was done in Ireland on the abortion debate, an issue at least as toxic as Brexit.

The police investigation into any wrongdoings during the referendum should continue alongside the Commission and any prosecutions should go ahead independent of the Commission’s deliberations.

There would be another election in the usual course of events but campaigning would be on the issues – tax, spending, welfare, education, NHS, defence… and not on the slow grind of Brexit.

A new Parliament would look at the Royal Commission’s plan of action and then vote on whether to trigger Article 50 again, this time with a clear road map of agreed actions, or whether the new proposals should be put back to a new referendum.

One tiny snag, as I’m sure you have noticed… in order to withdraw Article 50, Parliament – this Parliament – would have to vote to do so…