Nailed
December 11, 2015They say that, if all you have is a hammer, everything looks like a nail. Well, my particular “hammer” is regulatory impact assessment, particularly that contained in the TIINs for tax measures. So when I was asked to comment on the draft CIS legislation here I naturally turned to the explanatory memorandum to see what it had to say about the TIIN.
This is what it says:
A Tax Information and Impact Note covering this instrument was published on 10 December 2014 and is available on the HMRC website at https://www.gov.uk/government/collections/ta x- inf ormat ion-a nd- impact-notes-t iins.
I’m not by any means a conspiracy theorist: I’ve worked in HMRC and seen what can go wrong with publication. When I looked at this for the first time, on Wednesday night, I dropped a line to the HMRC contact and to their press office with a question and with a mild comment that I was surprised they had linked here, to the overarching list of ALL of HMRC’s TIINs, rather than here, to the actual TIIN for this measure. You will see that someone has helpfully tried to remedy this since then, but for some reason the revision contains random spaces so isn’t a clickable link.
Nevertheless, if we look at the TIIN for “Improving the operation of the Construction Industry Scheme” published on 10 December 2014 (and there is only one listed) we can see that the impact on business reads as follows:
These proposals are expected to relieve some of the regulatory burden of the CIS scheme.
The following measures, nil returns, joint ventures and repayments are expected to have a negligible impact on businesses. The measures simplifying the qualifying conditions for gross payment status will Benefit companies and partnerships by increasing their cash-flow.
The main changes to the CIS will take place in 2016 and 2017 and it is anticipated that it will affect approximately 40,000 businesses. Approximately 5 per cent of sole-trader contractors (2000) may require additional support as legislation is introduced to make verification and online filing mandatory.
Estimates of the impact on businesses will be established and published once details of the measure have been finalised.
(my emphasis)
Now, my question to the responsible official and to the HMRC Press Office was, where are the revised estimates for the impact on business, as the measure, or at least this bit of it, is about as final as you can get, surely?
Impact assessments are an enterprise that ought to be at the heart of government – an explanation of the evidence that underlies a policy decision, made transparent for the citizen to see for themselves that the government is making good, rational decisions. They are important in the making of delegated legislation like Statutory Instruments because no parliamentary time is devoted to the Instrument’s discussion. SIs are passed or not as they stand, and the mechanisms around their production are supposed to ensure that all the relevant factors have been taken into account before they are put before Parliament to be rubber stamped. The Explanatory Memorandum should tell us what is being done, why, and in what policy context, that equality and human rights have been considered, that there has been consultation with those affected and the impacts have been considered, with a special mention on those impacts on small businesses, and that there is appropriate guidance in place. Parliament should be able to take it as read, that all that needs to be done, has been done.
What we have with this draft SI is a link to an impact assessment which promises an update, but what we don’t have is an update which supports the legislation. I suspect that the problem is simply that the original TIIN was badly drafted and that the promise of further consideration of the impacts refers to the previous paragraph, the difficult bits about mandatory electronic filing that haven’t been legislated yet and not to the whole package, but that’s not actually what it says.
It depends on your point of view. If I had still been working for HMRC then I would have told the official what I have said above, and asked that the TIIN was updated or else the original clarified, perhaps by a note in the EM.
If I were an MP, I would consider it insulting to be asked to rubber stamp something that wasn’t ready to be passed on the nod (and I might well be asking my researcher to talk to the HoC library about his entry in Wikipedia “The last time a draft statutory instrument subject to affirmative procedure was not approved by the House of Commons was on 12 November 1969 when the House rejected four draft Orders relating to parliamentary constituencies.”)
If I were a member of the Joint Committee on Statutory Instruments I might want to draw the attention of the House to this SI on ground ix: “any other ground which does not go to its merits or the policy behind it” i.e. that the impact assessment has not, as promised, been updated.
It’s a small thing, but it shows either a contempt for the Parliamentary process or – and much more likely – that HMRC’s staffing levels have, finally, reached breaking point.
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