Beware of the leopard: TIIN instructions

May 18, 2012

I am publishing at the end of this post (click on “read the rest of this entry”) the instructions on how to prepare a TIIN, a tax information and impact note. They were sent to me by HMRC on 16th May 2012 in response to a Freedom of Information Act request. The file is reproduced by a simple cut and paste from the RTF file supplied: I haven’t cleaned up the formatting or made any changes from what was sent to me.

Before you click to look, think about this.

The guidance on how to complete a regulatory Impact Assessment, the equivalent document for non-tax changes, is clear and publicly available. This enables independent scrutiny via the Regulatory Policy Committee.

The RPC assesses impact assessments against well established guidance set out by the BRE IA Guidance, IA Toolkit, One-in, One-out Methodology, and HM Treasury’s Green Book.

Isn’t it now time that the government also made public the standard it sets itself when considering the evidence for making tax changes? This guidance should be on the HMRC website and kept updated, so that everyone can see the contents – not hidden in the filing cabinet in the locked office behind the “beware of the leopard” sign. Or on a retired tax inspector’s blog, for that matter!

HMRC/HMT Budget Guidance on TIA/TIINs (Extracted from the Civil wiki pages)

Tax Impact Assessment

Tax Impact Assessment is a policy process to assess the impact of any potential tax change. It is an integral part of the New Approach to Tax Policy Making. Tax Impact Assessment is mandatory for all tax and NICs policy changes.

Tax Impact Assessment (TIA)

TIA is a process, not a form. It is the way you ensure you produce evidence

based policy and that you have covered all the Government commitments and

impacts in all areas.

When do you do it?

All the time! From the moment you think of a change (either operational or

policy based), but you need to show your workings in three places:

• the new table of impacts included in all submissions seeking a ministerial

decision

• TIA material should be included in consultation documents

• the table of impacts and other material incorporated into published Tax

Information and Impact Notes (TIINs) published at the point at which policy

design is final or near final – most often at the point at which the draft

legislation is published.

What is TIA?

There are seven aspects to consider:

• What are you doing? The policy objective

• Why are you doing it? Which of the Government’s priorities for the tax system

does it support?

• Why are you doing it this way? Options appraisal

• What will it raise? The exchequer and any wider economic effect

• What will it cost customers? Not just business and charities but also

individuals and households

• What will it cost the Public Sector? Costs/benefits to HMRC or other delivery

department

• What are the other impacts? Equalities, small firms, competition, carbon

emissions etc

So who does what then?

The Policy lead (HMRC or HMT) is responsible for the completion of the TIA and

therefore, completing the TOI in the Submission, Consultation and TIIN. This

does not mean that Policy Leads need to do all of the work themselves.

Some analysis – of the exchequer, economic effects, distributional analysis and

of the compliance costs to businesses – may be undertaken by Knowledge, Analysis

and Intelligence (KAI). See KAI specific guidance. There is also a

responsibility to estimate any significant compliance costs on individuals,

Central Customer & Strategy (CC&S) are able to offer you support when needed

here. CC&S can also help with the analysis of Equalities impacts (Tony Verran).

The Delivery Support Group in the Budget & Finance Bill team (or your process

owner) will also help with the estimates surrounding HMRC’s implementation

costs. Finally there is also help available from the Delivery Support Group who

own the TIA process and will be able to guide you through the TIA.

The key points where the work you have done should be summarised and

communicated.

Submission Stage – When you are asking the Minister to make a decision on taking the policy forward – a summary of the table of impacts must be included as an annex to the submission and key impacts must be highlighted in the body of the submission. The table of impacts annex is embedded in both HMRC and HMT submission templates.

Consultation Stage – When you are consulting on your policy – you must consult on the impacts you have identified to test and refine these with consultees. You can do this either by including a consulation stage summary table of impacts in the consultation or embedding the questions on impacts within the consultation document.

TIIN (Tax Information and Impact Note) Stage – When the policy design is final or near final – usually when draft legislation is published for consultation. The summary table of impacts should be incorporated into a Tax Information and Impact Notes (TIIN).

If in doubt, give us a shout at DSG.

Who is responsible for completing the Table of Impacts?

The Policy lead (HMRC or HMT) is responsible for the completion of the TIA and

therefore, completing the table of impacts in the Submission, Consultation and

TIIN. This does not mean that Policy Leads need to do all of the work

themselves.

Stakeholders:

Knowledge, Analysis and Intelligence (KAI). Analysis of the exchequer, economic

effects, distributional analysis and of the compliance costs to businesses will

be needed.

Individual Customer Directorate (ICD) There is also a responsibility to estimate

any significant compliance costs on individuals. They are able to offer you

support when needed. Here is a link to their key contacts.

As part of the Customer Cost reduction programme both the Standard Cost model

and the Total Cost to Serve tool can be used to measure the costs to businesses

and Individuals. CGBAT and ICD help business areas to understand when and how

these need to be used.

Individual Customer Directorate (ICD) There is a statutory Equality screening

test which all policies must be signed off against. If the Policy is likely to

go beyond the initial test ICD will be able to offer assistance and support.

The Delivery Support Group in the Budget & Finance Bill team (or your process

owner) will also help in the calculation of any estimate surrounding any HMRC

implementation costs.

Finally there is also help available from the Cross Government Business Agenda

Team (CGBAT).

The TIA process is owned by Delivery Support Group in the Budget & Finance Bill team in HMRC and you should make early contact with us for help and advice: we are here to help you through the process. There is no formal “sign off” process for the table of impacts other than the normal submissions process – but you should add the Delivery Support Group to the stakeholders who see the submission before it goes up and when the response is received.

THE KEY STAGES

TIA: Submission Stage

The HMT and HMRC submissions templates require policy leads to complete a Table of Impacts for all submissions where the Minister is being asked to make a

decision on a policy issue. This is the first building block in assessing and

presenting your assessment of the impacts of tax policy changes that will

eventually be published as part of the TIIN.

The Table of Impacts provides a summary of the key impacts of a measure that

Ministers need to be aware to make a decision – presented in a consistent format.

You will need to demonstrate to Ministers that you have considered the full

range of possible impacts of a particular change. Where information is not

known, you should make this clear.

The information in the Table of Impacts is not designed to replace advice you

would ordinarily include in the main body of the submission to Ministers. This

should continue to discuss and draw out the key impacts as appropriate. You

should also highlight any significant impacts in the ‘Implications’ section on

the front page of the submission and, if necessary, explain them further in the

body of the submission.

Submissions

TIA: Consultation Stage

The TIA process only applies to HMT and HMRC and MAY NOT be used in other

Departments.

If officials in another Government department want to include the possibility of

tax as an alternative to regulation, then they should engage with HMT at an

early stage. Providing the Treasury agree they should then take the proposal out

to a joint consultation (using an IA and not a TIA, but with HMT engagement in

the design of the consultation). Then, if tax turns out to be a favoured option,

the other department should hand the idea over to HMT. At this point HMT and

HMRC will subject the proposal to the TIA process. Budget Policy Matters must be

treated as Restricted.

The TIA you developed at submission stage should now be reviewed and updated (if

necessary) and included in the consultation document. The evidence base may have

developed in light of responses to earlier discussion documents or ‘calls for

evidence’.

You should once again set out the answers to the 7 TIA questions:

• What are you doing? The policy objective

• Why are you doing it? Which of the Government’s priorities for the tax system

does it support?

• Why are you doing it this way? Options appraisal

• What will it raise? The exchequer and any wider economic effect

• What will it cost customers? Not just business and charities but also

individuals and households

• What will it cost the Public Sector? Costs/benefits to HMRC or other delivery

department

• What are the other impacts? Equalities, small firms, competition, carbon

emissions etc

You might consider the easiest way to present our current understanding of the

impacts is to include a table (similar to the one produced at submission stage)

but do not feel constrained to present the information in that way.

Remember, this is the first time the information is likely to have been

published so you should consider how best to present it so that it will be clear

and easily understood by the reader. This might mean a separate chapter on

impacts or the document may flow better with the impacts embedded throughout the

document. NB. The Government Code of Practice on consultation commits the

Government to publishing impact assessments with formal condocs and to

consulting on the anticipated impacts. Explain what assumptions under-pin the

analysis so that people can understand where the figures come from and challenge

them if they wish to do so.

Also bear in mind that some of the detail in the submission stage TIA will not

be appropriate to publish or will need to be redrafted with a different focus.

For instance, you may have advised the Minister that you are planning to do a

Small Firms Impact Test but at this stage you will actually be looking for input

from small firms.

If you choose to use a table of impacts then, unlike at submission stage, where

there is more than one policy option, you don’t necessarily need to complete a

separate table for each option. Again, consider what format would be most useful

for the reader.

The guide to completing specific fields in the TIA is contained in the Guidance

on Completing Specific Fields. At the consultation stage you should update the

information (if appropriate), again working closely with your stakeholders in

KAI, ICD and the Delivery Support Group in the Budget & Finance Bill team.

It is a good idea to include a specific question on the equality impacts of a

measure to test assumptions or gather information (such as ‘Do you have any

comments on the assessment of equality [and other] impacts in the specific

impact test checklist on page [?] and in the Taxes Impact Assessment on page

[?]’). Remember that completing equality tests is a requirement and legal

challenges to HMRC have been made in the past. It could be useful to demonstrate

that you completed the necessary screening and then tested the outcome of that

screening as part of the consultation.

TIA – Final Stage: Tax Information and Impact Notes

CivilWiki will close in August. All of the HMRC Budget and Finance Bill Guidance

will be returned to the HMRC Intranet before that date.

Frequently asked questions on the Tax Impact Assessment (TIA) process and the

TIIN can be found in CivilWiki pages here.

Contents [hide]

1 What is a Tax Information and Impact Note (TIIN)?

2 Who is responsible for the TIIN?

3 When will I be required to prepare a Tax Information and Impact Note

(TIIN)?

4 How do I prepare my TIIN ready for clearance and publication?

5 Who do I need to clear my TIIN with before it can be printed/published

on the HMRC website?

6 How do I get my TIIN published?

What is a Tax Information and Impact Note (TIIN)?

A Tax Information and Impact Note (TIIN) is the final stage in the tax impact

assessment process. It informs the public about proposed tax policy and NICs

changes.

It is the way in which the Government communicates tax and NICs policy changes

and their impacts. To produce a TIIN you must follow the Tax Impact Assessment

(TIA) process as you develop your policy.

A TIIN includes an explanation of the policy change, why Government is making

this change (the policy objective) and the impact of the change – including the

impact on the Exchequer, the economy, individuals, businesses, civil society

organisations, as well as any equality and other specific impacts. It also

provides the date from which the change will be effective and summarises the way

in which legislation will be amended. The table of impacts (TOI) developed

throughout the policy development process is included as a key part of the TIIN.

Who is responsible for the TIIN?

The policy lead (HMT/HMRC) and their SCS team leader are responsible for

ensuring the TIIN is prepared, cleared and published to the required standard.

However whichever department is in the lead (ie HMT or HMRC) it is essential

that the policy partner agrees the final version before it is sent for clearance

and publication. Policy partners can agree between themselves how best to divide

the work based on the skills and capacity of the HMT/HMRC teams. For example

HMRC will need to complete the sections on the detailed proposals as these cover

how the legislation works.

When will I be required to prepare a Tax Information and Impact Note (TIIN)?

You will need to make sure that a TIIN is published for all tax and NICs policy

changes that require legislation. A TIIN is normally published when the policy

design is final or near final. For most cases this will be at the point at which

we publish draft primary or secondary legislation, for example in the autumn

when draft Finance Bill Clauses are normally published. If there is no

consultation on draft legislation the TIIN should be published alongside the

announcement of the final policy, for example on Budget Day or alongside the

final legislation.

Where measures involve both primary and secondary legislation, it may be

appropriate to publish a TIIN alongside either the draft primary legislation,

the draft secondary legislation, or both. This will largely depend on when the

details of the substantive elements of the policy change are finalised.

There are a limited number of circumstances where you will not need a TIIN.

These include:

routine changes to rates, thresholds and allowances to a predetermined formula

such as indexation;

appointed day orders;

secondary legislation enacting Double Taxation treaties; and

secondary legislation not laid before Parliament.

You must keep the potential impact of a tax policy change under review up to the

point that legislation is enacted. A revised TIIN must be published where there

are significant changes to the impacts (as previously published). For example:

If as a result of consultation on draft legislation in the autumn changes are

made which change the impacts of the proposals a revised TIIN must be

published.

If there are significant amendments to legislation during the passage of the

Finance Bill you will need to consider whether this requires amendments to the

TIIN. Any TIIN that needs re-publishing will be published at Report Stage.

Where changes to the legislation are made to ensure this fully meets the

policy objective and there is no change to the impacts a republished TIIN is

not usually required. Other material accompanying the legislation will explain

that that is the case, and refer users to the previously published TIIN.

For advice on whether you will need to publish or republish a TIIN please

contact [Personal data redacted under Section 40 of the FOI Act 2000].

How do I prepare my TIIN ready for clearance and publication?

The most important thing to remember is the TIIN is the final published document

that explains what we are doing to the outside world. To be able to prepare your

TIIN you must follow the tax impact assessment (TIA) process as you develop your

policy. The TIA process cannot be done at the last minute – it is the way in

which you should develop your policy.

Part 1 of the template gives the context for the measure including: what the

measure is and who is likely to be affected; the policy objective and

background; and detail of the proposals. Help on how to complete these sections

is included within the TIIN template.

If you are based in HMRC, go to our templates page on the HMRC intranet for the

latest TIIN template.

If you are based in HMT, please contact the Budget and Finance Bill team in HMRC

for the latest TIIN template.

Please note: if you are updating a previously published TIIN, you will need to

transfer the text on to the new TIIN template as there have been amendments to

this since Budget 2011. Please also add a line to the ‘Background’ section

stating that the latest TIIN ‘updates and replaces the Tax Information and

Impact Note published on [date]’.

Part 2 of the template is the Table of Impacts (TOI) taken from the new TIA

process and should be completed to the appropriate level of detail for every

measure. It should be developed as the policy itself is developed and you will

have included the table of impacts in your submission to the Minister asking for

a decision on the policy. If you consulted on the measure you will have embedded

the TOI in your consultation document. The TOI includes the monitoring and

evaluation section. The TOI you put in the TIIN must be suitable for publication

and any internal issues must be removed.

Guidance on the TIA process and completing the TOI is available on CivilWiki

here.

Style and format

The level of detail required depends on the measure. Simple or less

controversial measures are likely to require less detail than complex or

controversial ones. A TIIN on a measure should be consistent with how the

measure is communicated in all other documentation, for example Budget Day

documents, and you should prepare the TIIN in tandem with these other documents.

In all cases, you must use the latest template and text should always be placed

into the sections as shown on the template.

Top tips are to:

Be aware of your audience(s)

Use simple language – draft in plain English and avoid legal or technical

language.

Be concise – avoid lengthy introductory sentences which add no value.

Keep acronyms to an absolute minimum. Where acronyms are used, write out in

full on the first instance.

Write the main title in title case.

Use Arial 11 pt for the main body text.

Write ‘per cent’ in full where percentages are included (not the % symbol).

Use ‘The Government’ not ‘We’ (e.g. The Government has decided…)

Follow the format of the template and do not add or delete headings.

A quick guide to formatting is available here (available to download in HMRC

only). For more detailed information, see the HMT style guide.

Best Practice examples

Here are some examples of good TIINs published in December 2011:

VAT: Online Registration and Removal of the Threshold for Non-UK Established

Businesses

Scope of the Supplementary Charge

Who do I need to clear my TIIN with before it can be printed/published on the

HMRC website?

If your TIIN is being published at Budget 2012, follow these steps:

Step 1: The TOI part of the TIIN must be cleared by the analytical teams with

responsibility for each impact. Full details are in the TIA Guidance here.

Broadly, the responsible teams are:

Exchequer Impact – your KAI analyst who will liaise with the scorecard branch

in HM Treasury;

Economic Impact – your KAI analyst and HMT [Personal data redacted under Section 40 of the FOI Act 2000] if the measure has

macroeconomic impacts;

Impact on Individuals – Central C&S (formerly Individuals Customer

Directorate)

Equalities Impact – Central C&S .

Impact on Business and civil society organisations – your KAI analyst

(relevant KAI Deputy Director for formal sign off if there are significant

compliance costs) and Business Customer & Strategy;

Operational Impact – Delivery Support Group (DSG); and

Other Impacts – DSG.

The Delivery Support Group now owns the TIA process so please contact your DSG

representative for advice.

Step 2: Agree the content of the TIIN with analytical teams, your policy partner

and DD. See here for guidance on style and consistency.

Step 3: Let your Point of Contact (POC) know you are intending to publish a TIIN

and agree a timetable for sending it to B&FB. See section N of the commissioning

note for details of who your POC will be.

Step 4: Send your final TIIN to the B&FB team mailbox -. Budget and FB

Coordination, Pseudo (CenPOL BudgetFB). When doing this, you must include a

brief introduction and keywords/keyword phrases as detailed below (see ‘key

information’). You should also confirm that you have cleared your note with the

appropriate analytical teams and that approval has been obtained from the

relevant DD.

Step 5: B&FB/SPB will proof read the TIIN (with analytical teams and DDs if

appropriate) and any comments or changes made at this stage will be fed back to

you for agreement.

Step 6: Return the TIIN to the B&FB team mailbox by the deadline given with your

agreement to the changes. Any further late changes should be tracked and

flagged up in the covering email.

Step 7: B&FB will arrange for clearance of the TIIN through the Minister’s

office.

If your TIIN is being published outside of fiscal events, follow these steps:

Step 1: The TOI part of the TIIN must be cleared by the analytical teams with

responsibility for each impact as above.

Step 2: Agree the content of the TIIN with your policy partner.

Step 3: Your Team Leader (SCS/Deputy Director level) must approve the TIIN for

publication

Step 4: Send your TIIN to [Personal data redacted under Section 40 of the FOI Act 2000] in B&FB and they will liaise with other relevant stakeholders and feedback their comments.

Step 5: Send the TIIN in a submission to the minister’s office and ask them to

confirm that they are satisfied that the TIIN represents a reasonable view of

the likely costs, benefits and impacts of the measure.

The checklist here can be printed and used to track that the stages have been

completed before sending the TIIN to B&FB.

How do I get my TIIN published?

For TIINs published alongside fiscal events, such as the publication of draft

Finance Bill clauses in autumn and alongside the Budget, HMRC Budget and

Finance Bill Co-ordination team will arrange for all TIINs to be published in

hard copy and on the internet/intranet.

For TIINs published alongside other legislation/draft legislation such as

statutory instruments outside of key fiscal events, the HMRC policy partner is

responsible for ensuring the TIIN is published on the HMRC internet TIINs page

at http://www.hmrc.gov.uk/thelibrary/tiins.htm.

TIINs published at Fiscal Events

Publishing Hard Copies

The B&FB team will arrange for hard copies of TIINs to be printed for the key

fiscal events such as draft Finance Bill Legislation in the autumn and the

Budget, so you do not need to do this.

TIINs can only be incorporated in the main Budget/Autumn document if all the

steps 1 – 7 above have been followed. TIINs will not be incorporated before the

Minister has approved the TIIN for publication.

Publishing on the internet

DSG in the B&FB Team will arrange for publication of all TIINs at autumn events

or at the Budget. The team will use the same version that is sent for printing

ie the the version approved by the Minister. .

TIINs published outside of Fiscal Events

Outside of fiscal events, DSG will only deal with TIINs for urgent publication

and in these cases, you must make clear that the TIIN has been approved for

publication by the relevant Minister. For all other routine publications, you

will need to contact your Customer Contact Online Manager and arrange for

publication on the HMRC internet TIINs page at

http://www.hmrc.gov.uk/thelibrary/tiins.htm. If you want the TIIN to be accessed

through other internet pages, you must either arrange this yourself through your

Customer Contact Online publishing manager, or include full details of the url

and any introductory text in your email.

Again it is essential that the TIIN has been approved by the Minister before it

is published.

Other Documents

If you have other documents that will be published alongside the TIIN e.g. draft

legislation, a technical discussion document or a Written Ministerial statement

talk to DSG in the first instance about how to ensure the right links are made

and that all documents are published at the same time.

Key Information

In all cases, you will need to provide the following information which will be

used to help staff and customers to see at a glance what the document is about

and also to locate it when using a search engine.

Title of document

Brief Introduction

Keywords/Keyword Phrases

The Brief Introduction must be no more than 30 words as it will be visible after

the document title on the Internet menu.

The Keywords/Keyword Phrases are used to improve the accessibility and

search-ability of documents published on the Internet and should be specific to

the TIIN (i.e. what specific words will searchers be using to find the

document).

Any questions about e-publication should be directed to [Personal data redacted under Section 40 of the FOI Act 2000] in the Delivery Support Group or your DSG representative.

TIA: Frequently Asked Questions

1 What is the difference between the TIA and a TIIN?

2 Is the Table of Impacts for Ministers a separate product to what will

be published?

3 When is a TIIN published?

4 Are TIINs required for all tax measures?

5 What TIINs will be published at Budget?

6 Do you plan on re-publishing many TIINs?

7 If I am consulting at Budget, will the summary of impacts table be

published separately?

8 Who is responsible for the TIA and the TIIN?

9 Will we ever publish a summary of impacts table that isn’t part of a

TIIN?

What is the difference between the TIA and a TIIN?

Tax impact assessment (TIA) is the process through which we assess and present

the impacts of tax policy changes. It has three main building blocks:

The summary of impacts table annexed in submissions to Ministers on tax policy

changes (see below);

The summary of impacts that will be embedded into consultation documents (see

below); and

The Tax Information and Impact Note (TIIN) is a note which tells the public

about proposed tax policy changes, usually accompanying publication of draft

legislation. The summary of impacts table is included as part of the TIIN.

Is the Table of Impacts for Ministers a separate product to what will be

published?

The summary of impacts table to be included in submissions is a first iteration

of what will eventually be published as part of the TIIN. Embedding impact

analysis into the development of policy and explaining what we are doing, why

and what impact we expect the change to have is a core element of the new

approach to tax policy making. The summary of impacts table is one of the

changes being introduced to embed that approach in the way that we work.

However, there will be numerous opportunities to revisit and refine drafting and

analysis before it is published and at the early stage you may often find

yourself advising Ministers of what work you plan to do rather than reporting

the results of that work.

When is a TIIN published?

A TIIN is published at the point at which policy design is final or near final.

In most cases, this will be alongside draft legislation published in the autumn.

There will be a smaller number of TIINs published alongside the Budget.

For measures not in the Budget/Finance Bill cycle, the TIIN will ordinarily be

published when the draft legislation is published (e.g SIs or Programme Bill)

Are TIINs required for all tax measures?

Yes. TIINs are the medium through which we explain tax policy changes. They are

required for all tax policy changes with the exception of routine rate/threshold

increases that are in line with forecast assumptions (i.e. straightforward

indexation based on pre-announced policy)

What TIINs will be published at Budget?

There are only three categories of TIINs that will be published at Budget:

New measures announced at Budget for FB12 (i.e. for which draft legislation

hasn’t been previously published) – e.g new anti-avoidance measures.

New measures legislated by secondary legislation or for a future Finance Bill

or Programme Bill where definitive decisions have been taken and no

consultation is necessary/planned – e.g straightforward pre-announcements of

rates – but see below re routine changes.

Previously published TIINs that require substantive revision following

consultation on draft legislation/feedback from stakeholders.

Where a new FB12 measure or measure enacted by secondary legislation is a

‘routine’ change a TIIN is not required. A ‘routine’ change is a change to

rates, thresholds and allowances to a predetermined formula such as indexation

by RPI because there is no change of policy in their enactment.

Do you plan on re-publishing many TIINs?

No. This will be the exception rather than the rule. Will be considered on a

case by case basis and only be required if there is a substantive revision

required.

If I am consulting at Budget, will the summary of impacts table be published

separately?

The TIA material, usually in the form of the summary of impacts table, should be

embedded into your consultation document and will form part of the material on

which you will be consulting stakeholders. The consultation is your opportunity

to validate your figures and check on any assumptions you have made in arriving

at them or in assessing any other impacts. It will not, at that stage, be final

and this should be clear in your document.

Further guidance will follow on consultation for tax policy changes under the

new approach.

Who is responsible for the TIA and the TIIN?

Policy leads (ie HMT or HMRC) are responsible for the tax impact assessment and

will therefore lead on and own the process for their measure. They are

responsible for ensuring impacts are assessed to help inform the policy

decision. In particular they are responsible for:

summary of impacts table in advice to Ministers;

consultation exercise and presentation of impacts in consultation documents;

and

the final summary of impacts table to be published in the TIIN.

HMRC Delivery Support Group own the general TIA process, TIA template and

guidance.

The TIIN is an HMRC product owned by HMRC policy officials (ie the HMRC policy

lead for an HMRC measure and the HMRC policy partner for an HMT led measure) who

are responsible for drafting it, slotting in the summary of impacts table and

ensuring that the whole document hangs together.

The HMRC Budget & Finance Bill Team (B&FB) owns the TIIN template and guidance and has responsibility for assuring the overall quality and consistency of

TIINs.

The detailed guidance on TIAs and TIINs covers the responsibilities of policy

leads and policy partners for consulting with and obtaining sign off from a

number of stakeholders.

Will we ever publish a summary of impacts table that isn’t part of a TIIN?

The only time we will publish a summary of impacts table other than as part of a

TIIN is as part of a consultation (see above). We should use the TIIN to

communicate all tax policy changes where the final decisions have been taken.

The TIIN will include an explanation of what we are doing, why and what impact

it has. This should apply to all tax changes and not just those in Finance Bill.

TIA: TOI: Useful: TOI: Useful Contacts

Please find below a list of useful contacts that will be able to help and advise

you through the TIA process. The list includes details of your CG BAT contact

and of those that are experts in certain TIA specific fields .

If you have a general enquiry and you just want a bit of advice, you initial

contact in the CG BAT team would be best place to start.

Cross-Government, Business Agenda Team

[Personal data redacted under Section 40 of the FOI Act 2000]

Specific Contacts for Fields in the Table of Impacts

• Exchequer Impact (£m) [Personal data redacted under Section 40 of the FOI Act 2000]
• Economic Impact [Personal data redacted under Section 40 of the FOI Act 2000]
• Impact on Individuals and Households [Personal data redacted under Section 40 of the FOI Act 2000]
• Equalities Impacts [Personal data redacted under Section 40 of the FOI Act 2000]
• Impact on businesses and Civil Society Groups [Personal data redacted under Section 40 of the FOI Act 2000]
• Operational impact (£m) – [HMRC or other] Delivery Support Group
• Other Impacts Cross-Government, Business Agenda Team
• Monitoring and Evaluation [Personal data redacted under Section 40 of the FOI Act 2000].

TIA: Table of Impacts: Specific Fields

If officials in another Government department want to include the the option of tax as a way to meet their policy objective they must talk to HM Treasury (HMT) at an early stage. Providing HMT agree they should then take the proposal out to a joint consultation (using an IA and not a TIA, but with HMT closely involved in the design of the consultation). Then, if tax turns out to be a favoured option, the other department should hand the idea over to HMT. At this point HMT and HMRC will subject the proposal to the TIA process.

ALL Budget Policy Matters are Restricted.

Tax Impact Assessment

Tax Impact Assessment is a policy process to assess the impact of any

potential tax change. It is an integral part of the New Approach to Tax

Policy Making. Tax Impact Assessment is mandatory for all tax and NICs

policy changes.

Where do I start?

When do I have to do it?

Table of Impacts

Who is responsible for completing the Table of Impacts?

Guidance on Completing Specific Fields

The Key Stages

Proposal/Submission Stage

Consultation Stage

Final Decision Stage

Quick Guide, FAQs, Useful links and DSG Contacts

Quick Guide

FAQs

DSG Contacts

TIA: Table of Impacts: Specific Fields

The Table of Impacts as it appears in submissions can be seen here.

1. Exchequer Impact

2. Economic Impact

3. Impact on Individuals and Households 4. Impact on Equality

Impact on individuals and households Impact on equality

5. Impact on Business (including civil society organisations) 6.

Operational Impact

Impact on business (including civil society organisations) Operational

impact

7. Other Impacts 8. Impacts on Tax Receipts

Other impacts Impacts on tax receipts

9. Monitoring and Evalutation 10. Where can I go for help on specific

fields

Monitoring and evalutation Useful Contacts

TIA: TOI: Exchequer Impact

All advice to Ministers should include advice on the possible costs/yield of the

proposal. You should engage early with KAI to obtain costings.

Please use the detailed guidance below to determine what advice to present,

depending on what stage you are at in the policy process.

To Note: Please ensure the scorecard branch in HM Treasury [Personal data redacted under Section 40 of the FOI Act 2000] are copied in to draft submissions where there is a scorecard impact. All content in the Exchequer Impact box is subject to final quality assurance and consistency checks by HMT Scorecard Branch. Please ensure that the submission continues to highlight the scorecard cost/yield on the front page (including if neg) as well as in the summary of impacts table. If needed, KAI analysts can seek advice on this field from [Personal data redacted under Section 40 of the FOI Act 2000].

Detailed Guidance:

Stage in the policy process What to enter in the Exchequer Impact box

Submissions Include a 5-year scorecard costing if possible. Use the choice

of 3 categories in the submission template to indicate what stage the

costing has reached in the costing quality assurance / OBR certification

process. The options are as follows – KAI analysts will be able to advise

which category is appropriate:

Indicative estimate – likely to change; OR

Best estimate – subject to OBR scrutiny and refinement; OR

Final and OBR certified costing – subject only to determinant changes

Budget – Year 1

if applicable

Some TIINs will be published alongside Budget announcements, e.g. if a

measure is being scored but consultation is not planned. If this applies,

enter the 5-year scorecard costing as it appears in Table 2.1 of the

Budget. Include the standard line:

These figures are set out in Table 2.1 of the Budget and have been

certified by the Office for Budget Responsibility. More detail can be

found in the policy costings document published alongside the Budget.

Consultations:

Summer – Year 1 If the measure has been scored at Budget and a costing

published, enter the 5-year scorecard costing as already published.

Include the standard line:

These figures were set out in Table 2.1 of the Budget and have been

certified by the Office for Budget Responsibility. More detail can be

found in the policy costings document published alongside the Budget.

Note: Don’t enter any more detail here than has already been published. If

there is a reason to consider publishing extra information (e.g. if a

costing for a package of measures was shown at Budget, but you are

consulting on individual measures), please seek advice from your central

Budget scorecard team [Personal data redacted under Section 40 of the FOI Act 2000].

If the measure is not yet scored so a 5-year scorecard costing has not been published, don’t enter one. Instead enter a statement giving an indication of the order of magnitude of the costing, and stating that the final costing will be subject to OBR scrutiny. This is to allow for any changes to the costing that may result from the quality assurance / certification process. If the measure is expected to have a non-negligible impact, say in the region of £50m:This measure is expected to increase receipts by approximately £50 million per annum. The final costing will be subject to scrutiny by the Office for Budget Responsibility, and will be set out at Budget 2012. Please leave the boxes for each of the scorecard years blank.

If the measure is expected to have a negligible impact:

This measure is expected to have a negligible impact on the Exchequer. Any

impact will be set out at Budget 2012.

Please enter a dash (-) in each scorecard year that the measure does not

apply to and write Negligible in each of the years that the measure does

apply to.

Or if the measure is expected to have zero impact:

This measure is not expected to have an Exchequer impact.

Please enter a dash (-) in each scorecard year that the measure does not

apply to and write Nil in each of the years that the measure does apply

to.

TIINs alongside draft legislation

Autumn – Year 1 If the measure has been scored at Budget and a costing

published, enter the 5-year scorecard costing as already published. Follow

the consultation stage guidance (see above).

Note: if your measure has been re-costed as part of the Autumn fiscal

forecasts, this may mean that your TIIN doesn’t include the very latest

estimates, but rather the latest published estimates. This is the correct

thing to do unless your measure has changed substantially – in which case

seek advice from your central Budget scorecard team [Personal data redacted under Section 40 of the FOI Act 2000]

Any changes to costings resulting from OBR

determinants / fiscal forecasts will be captured when final costings are published at the following Budget. If the measure has been scored at the Autumn Statement and a costing published, enter the 5-year scorecard costing as already published.

Include the standard line:

These figures are set out in Table 2.1 of the Autumn Statement and have

been certified by the Office for Budget Responsibility. More detail can be

found in the policy costings document published alongside the Autumn

Statement

If the measure is not yet scored so a 5-year scorecard costing has not

been published, don’t enter one. Follow the consultation stage guidance

(see above).

Budget – Year 2 If the measure has previously been scored, Budget in Year

2 presents an opportunity to publish any necessary updates. Table 2.2 in

the Budget will set out 5-year scorecard costings for measures starting in

April Year 2 or later. At this point, costings should be updated to

reflect any consultation changes and be consistent with the latest OBR

determinants / fiscal forecasts. Any accompanying material (e.g. if a TIIN

is being re-published) should use the same figures, and state:

These figures are set out in Table 2.2 of the Budget and [insert one of

these explanations of what’s change: reflect the latest economic forecasts

OR reflect changes to the policy following consultation OR reflect changes

to key assumptions of the policy costing following consultation].

If the measure has not previously been scored, it will score at Budget

Year 2. A 5-year scorecard costing will be published in Table 2.1, and an

explanation of the costing will be published in the policy costings

document. Any accompanying material (e.g. if a TIIN is being published or

re-published) should use the same figures, and state:

These figures are set out in Table 2.1 of the Budget and have been

certified by the Office for Budget Responsibility. More detail can be

found in the policy costings document published alongside the Budget.

TIA: TOI: Economic Impact

Drafting of the Economic Impacts box is the responsibility of the policy lead,

although KAI and HMT will need to supply much of the content where significant

impacts are identified.

The economic impacts box should be used to highlight any possible macroeconomic

impacts (employment, inflation, investment etc) particularly if taken into

account in OBR 2nd round effects. It can also be used to describe more

significant microeconomic impacts (e.g. improving sector competitiveness).

You should therefore consider the following questions when carrying out the

analysis for this box:

Are there any significant economic behavioural responses that will need to

be/are taken into account in the costing?

Will the measure have any impact on the Office of Budget Responsibility (OBR’s)

macroeconomic forecast? i.e. are there any “second round” effects? (for example

on total investment, employment or consumption in the economy – effects like

these will usually only apply to very large measures)

What other economic impacts are significant? For example, any longer term

impacts beyond the five years captured in costings or forecasts, or any

noteworthy impacts on specific markets which are not big enough to affect the

OBR’s macroeconomic forecasts but Ministers should be aware of.

In many cases, the measure being considered will have no significant micro

impacts and a negligible impact on the macro economy. If this is the case, the

box should simply state that the change has no significant economic impacts.

TIA: TOI: Impact on Individuals and Households

To assess the impact on individuals and households you should consider:

The likely number of individuals/households affected (including winners and losers if relevant). The population figure(s) need to be consistent with population data used elsewhere – for example, in the exchequer impact. This will require discussion with the KAI analyst leading on the costing.

What types of individuals will be affected by the tax change and by how much (that is, who is bearing the increase/decrease in tax. This should include the likely distributional impact of the measure where known). Your KAI analyst will be able to assist with any detailed, proportional, distributional analysis. Analysis on who will be affected (and by how much) is required for all measures which yield or cost more than £5m.

The compliance impact on individuals and whether it can be quantified. In particular you should say whether you hold (or plan to obtain) customer journey data which will enable you to use the Total Cost to Serve (TCS) model to quantify customer costs. ICD may hold customer journey information so should be contacted in the first instance.

Compliance costs

To Note – The extent of the analysis needed on compliance costs (and whether you need to quantify customer costs using Total Cost to Serve “TCS”) will depend on the number of individuals affected and/or the amount that each individual is affected.

There are two levels of analysis – qualitative and quantitative – depending upon whether the policy is expected to be above or below our de-minimis limits.

The de minimis limits are:

Each individual’s one-off cost to comply – A one-off impact of two hours of an individual’s time / equivalent cost of £30.

Each individual’s annual cost to comply – A yearly (reoccurring) impact of one hour of an individual’s time / equivalent cost of £15

Total population’s one-off cost and annual cost to comply – £7.5m per yr

Qualitative Analysis

If you estimate that the measure either does not affect individuals (no impact) or falls under all of the above (negligible impact) you will only need to write a qualitative statement – for example:

There is no impact on individuals because [e.g. this is a change that affects North Sea Oilfields only]

The measure is likely to affect fewer than 500,000 individuals and the impact on affected individuals to comply will be less than £15 per year

Quantitative Analysis

Estimates that have a material affect on individuals (and/or fall above any of the limits) will need some numerical analysis; this will be subject to QA by KAI and ICD .

In all cases agree an analysis plan with your KAI contact, liaising with ICD as appropriate , i.e. when there are compliance costs (ICD, TIA – Inbox (ICD)) – remember, this box should tell you what we know now, but also what we plan to find out in order to come to a final decision and how we plan to discover it (e.g. Consultation? Research? TCS analysis and calculation?). Evidence during a consultation may also push you above (or below) the de minimis limits.

TIA: TOI: Equalities Impacts

This test concerns people with protected characteristics. All policies must be

signed off as compliant with this statutory test. At each stage of policy

development you must comment on what work you have done to see whether you have

given due regard to any impact on people with these characteristics and say so

explicitly if you think it has none. You must keep an audit trail of your

consideration, and retain this written record in the policy area so that the

Department can show it is fully compliant with the law, now and in the future.

The policy is likely to impact on Equality and therefore required to complete a

separate equality assessment if you answer yes to any of the following five

questions:

Will the policy or its implementation have a particular impact on

individuals with one or more of the equality groups below?

Are particular communities or groups likely to have different needs,

experiences and/or attitudes in relation to the policy or its

implementation?

Are there any aspects of the policy or the way that it is implemented that

could contribute to inequality?

Could this policy or its implementation have a positive impact on equality

groups?

Could the aims of the policy be in conflict with equal opportunity,

elimination of discrimination, promotion of good relations?

There are 10 protected characteristics that you need to consider:

Racial Group, Gender, Transsexual/ Transgender, Disability, Carers, Age, Sexual

Orientation, Religion or Belief, Marital Status/ Civil Partnership, Political

Opinion (NI only).

It is important that you look at the Departmental guidance and liaise with [Personal data redacted under Section 40 of the FOI Act 2000] in ICD when considering Equalities impacts as they now ‘own’ this part of the process.

Departmental EQIA guidance.

TIA: TOI: Impacts on Business and Civil Society Organisations

To assess this impact you must consider the following.

The likely number of businesses affected (including winners and losers if relevant).

What types of businesses will be affected by the tax change and by how much (that is – who is bearing the increase/decrease in tax, including likely sectoral impact, impact on specific markets or businesses of different size). If the tax change yields/costs more than £5m then you should briefly describe how many businesses/what types of business will be affected and by how much. This should be proportionate and should generally be based on information you already have available. It should only require the commissioning of extra analysis from KAI for the most significant and high profile measures.

The compliance cost to businesses, both annual and one off, in terms of HMRC’s target, where this is greater than £100,000 of administrative burden (annual) or £3m of compliance cost (one-off). You will need to determine whether the impacts of your change exceed these thresholds through some initial investigation using either the Standard Cost Model database (for admin burdens) or the Total Cost to Serve Calculator (for wider compliance costs). If you need training on these tools, please contact your KAI or ICD lead.

To Note: If you determine that your change does have significant impacts on admin burden or wider compliance costs, you will need to commission more detailed work from your KAI analyst.

There are three levels of analysis.

NO IMPACT on business costs: say qualitatively (for example, “only affects pensioners not businesses”)

NEGLIGIBLE IMPACT (that is below £100k/£3m) then DO NOT commission analysis but instead explain what analysis has already been done e.g. any sectoral impacts or populations already known.

IMPACT ON BUSINESS over the threshold: say what we can quantify now, and how we plan to find out more to assess the costs fully (for example, consultation? research? analysis of the Standard Cost Model and industry or other data?).

If the compliance cost to business does exceed the threshold and is quantifiable at this stage, there will be a standard table that your KAI analyst will be able to provide for insertion into this section.

TIA: TOI: Operational Impact

Operational impact (£m)-[HMRC or other department ]

In this field you will set out the implementation costs to HMRC or other

delivery department. You should include both development costs and ongoing costs

and indicate what those costs will be over the first five year life cycle (that

is, changes to IT systems, staffing, communications etc.). Similarly show

efficiencies and savings. You can show a range of figures and estimates if costs

and savings are not yet fully established (for example, IT systems changes).

You should make early contact to agree the text, possible costs and source of

any funding required with B&FB DSG and, where appropriate, SDA and Finance.

In broad terms where there are no costs or savings whatsoever for HMRC the

impact can be shown as nil. Where however there likely to be small costs/savings

of up to £1m over the 5 year period, these can be described as “negligible.”

Where the costs/ savings are likely to exceed £1m a breakdown between the key

elements should be provided.

The following generic text can be used ;

• It is not anticipated that implementing this change will incur any additional

costs/ savings for HMRC.

• The additional costs/ savings for HMRC in implementing this change are

anticipated to be negligible.

For the impacts over £1m requiring more information;

• The additional costs / savings for HMRC over the first 5 years are estimated

to be £x for computer system requirements, £x for staff resources, £x for

customer information and support. £x for ?

If there are cost impacts on other departments, these should be included using

the same criteria as for HMRC figures.

For major, very expensive changes it may be that HMRC will need to consider

seeking additional funding but this will be a matter for B&FB/ DSG, SDA and

Finance to consider and should not be raised other than on their advice. (You

should not include funding issues in the version of the TIA included in the

TIIN.)

TIA: Table of Impacts: Specific Fields

TIA: TOI: Other Impacts

You are required to test all policy proposals against a range of impacts. Many

of these tests will not be relevant to tax measures, but you need to demonstrate

that you have given proper consideration to each. It is the responsibility of

the Policy lead to agree the text in this field with your contact in HMRC/ BC&S.

Remember that the idea is to think through each of these tests as you develop

your policy. There is no need to comment in the table of impacts where policy

will not have an impact but if you think there could be an impact (for example,

on small firms) you should highlight and explain what you are doing to better

understand those impacts (for example, you plan to test by proactively arranging

a series of discussions with small firms and their representatives as part of

your consultation).

KAI specific guidance.

Contents [hide]

1 Competition assessment

2 Small firms impact test

3 Carbon assessment

4 Justice Impact Test

5 Sustainable development

6 Wider environment Impact

7 The health impact assessment (HIA)

8 Rural proofing

9 Privacy Impact

Competition assessment

The purpose of the test is to identify whether the proposal is pro or anti

competitive and to assess whether the impact is significant.

Click to access Quick-Guide1-4.pdf

Small firms impact test

You need to consider firms with fewer than 20 employees and say:

why they are included in the change

what amelioration you have considered, and

what consultation you have carried out.

http://www.bis.gov.uk/sfit

Carbon assessment

In this case, Defra has published full revised guidance on how to value

greenhouse gas emissions in government appraisals. This is for use in all policy

and project appraisals across government with significant effects on carbon

emissions. The guidance adopts the concept of the Shadow Price of Carbon (SPC)

as the basis for incorporating carbon emissions in cost-benefit analysis and

impact assessments.

You can find further guidance on the carbon assessment at the DECC website.

Justice Impact Test

You need to complete a Justice Impact Test if your policy change or legislation

is likely to have any mpact on the justice system for example:

New criminal or civil sanctions;

Increased work for courts or tribunals or probate office;

Increased demand for legal aid,

A need for an appeals process;

An impact on judicial appointments and/ or training; or

An increase in the number of offenders committed to custody or probation.

The form and guidance on its completion can be found at:

http://www.justice.gov.uk/guidance/justice-impact-test.htm

The completed form should be sent to [Personal data redacted under Section 40 of the FOI Act 2000] in Tax Administration Policy

or to the TAP mailbox: tap@hmrc.gsi.gov.uk. TAP will send to form to the

Ministry of Justice.”

Sustainable development

The Government is committed to five principles of sustainable development.

As a useful check, for a sustainable approach all policies should respect the

five principles.

Living within environmental limits

Ensuring a strong, healthy and just society

Achieving a sustainable economy

Promoting good governance

Using sound science responsibly

You can find further guidance on the five principles at the DEFRA website.

Wider environment Impact

The environmental impact tests enable departments to understand and quantify the

environmental consequences of their proposals.

Here are a few examples.

Will the proposal be vulnerable to the predicted effects of climate change?

Will it impact on air quality?

Will it lead to a change in the financial costs or environment and health

impacts of waste management?

Will it involve any material change to the appearance of the landscape or

townscape?

Will it change the degree of water pollution, levels of abstraction of water,

exposure to flood risk?

Will it disturb or enhance habitat or wildlife?

Will it affect the number of people exposed to noise or the levels of

exposure?

You can find further guidance on environmental impact tests at the DEFRA

website.

The health impact assessment (HIA)

This considers the effects policies, plans, programmes and projects have on

health and well being.

You can find further guidance on environmental impact tests at he NHS website.

Rural proofing

Is the policy likely to have an impact in rural areas?

The Commission for Rural Communities essentially ask policy makers to ask

themselves three key questions to rural proof a policy:

Is the policy likely to have a different impact on different areas and/or

communities?

Will the impacts be significant in rural areas?

How can a policy be adjusted to ensure that the needs of rural communities are

taken into account?

You can find further guidance on rural proofing at the rural communities

website.

Privacy Impact

It is a Cabinet Office requirement that, from 1 July 2008, a Privacy Impact

Assessment (PIA) is carried out for any new government initiative involving the

use of personal data.

A PIA is a risk management technique that helps assess privacy risks to

individuals in the collection, use and disclosure of information.

TIA: TOI: Monitoring and Evaluation

You must think at the outset about how you are going to monitor whether the

policy is working and evaluate whether the policy change has achieved the

original objective. Put another way how will you know if the policy is working

and how will you be able to advise Ministers or Senior Managers whether it is a

success or whether changes are needed to meet the original objective. You must

consider:

What monitoring information (eg on take-up, direct cost) should be available

and when, given current options for policy & its implementation;

The likely feasibility of an impact evaluation (cost-effectiveness at

achieving objectives, unwanted side-effects, etc) given the availability of

data and reliable control groups; and when the earliest this might be

feasible. If only certain aspects of the policy are likely to feasibly

evaluated, say so.

Whether evaluation is likely to be a high priority for this measure given: (i)

importance of policy; (ii) usefulness of results to inform changes to this or

other policies; (iii) feasibility of a quality evaluation; (iv) cost/ resource

requirements.

Is it possible that there will be changes to how the policy is implemented, eg

systems changes, extra boxes on return, e-filing, which would improve the

quality of monitoring information and/ or facilitate a future impact evaluation?

If so, this advice should be included in the main body of the submission – with

an order of magnitude of extra cost to HMRC/ customers.

There may also be changes to the policy design, e.g. through piloting in a

limited number of areas, that would enable the impacts to be measured more

robustly and / or at lower cost. If so, this advice should be included in the

main body of the submission as well.

In order to complete this section, you will need to discuss with the lead

analyst in KAI who will in turn consult KAI’s Strategic Analysis & Coordination

team (Thanos Alifantis) who coordinate and QA evaluation for HMRC and HMT. KAI

needs to agree the form of words used in the submission and in any TIIN for

publication. You and they may also need to discuss with HMRC process owners to

get estimates of costs for systems changes to improve monitoring information,

etc, if this issue is important enough to raise in the main body of the

submission.

TIA: TOI: Impacts on Tax Receipts

In addition to cross-Govt impacts, you should also consider the impact of your

measure on the sustainability of tax receipts and in particular:

Avoidance

AAG will avoidance-proof all Budget measures. Experience has shown that we add

the most value when our avoidance specialists are engaged in the early stages of

developing legislation. See proofing and testing guidance.

Compliance Impact

One of HMRC’s primary goals is to reduce the tax gap. For the 2008/11 spending

review round, HMRC’s Departmental Strategic Objective 1 (DSO1), agreed by

Treasury Ministers, is to close the tax gap. In developing Budget and Finance

Bill measures it is important that you consider compliance to ensure that our

DSO1 targets are met. Compliance effects are also specifically included in

Impact Assessments. See tax compliance guidance.

HMT leads should work with HMRC policy partners to consider these impacts.

TIA: TOI: Who is responsible for completing the Table of Impacts

Who is responsible for completing the table of Impacts?

The Policy lead (HMRC or HMT) is responsible for the completion of the TIA and

therefore, completing the table of impacts attached to the Submission. This does

not mean that Policy Leads need to do all of the work themselves.