Vision on

January 12, 2016

How did “making tax digital” become “quarterly tax returns“?

Seriously, prepopulating tax returns, making them like a digital bank account and doing away with the annual return deadline is a brilliant idea and a great ambition for a twenty-first century tax department.  So how come the Treasury select committee is writing to David Gauke asking for assurances it won’t be a cock up, and how come there’s a petition with more than a hundred thousand signatures (the Magic Number that gets it considered for Parliamentary debate) asking for the idea to be scrapped, before the consultation has even started?

Well, first of all, HMRC is utterly crap at communicating with the very smallest small businesses, as anyone who has listened to me banging on about the VATMOSS VATMESS over the last year will know.  The “stakeholder” model breaks down when there isn’t a “stakeholder” group to talk to, and the very smallest traders don’t join trade associations because even the Federation of Small Businesses costs more to join than the likely profits.

There’s an alternative (the Small Firms Impact Test, which again I’ve banged on about in this blog once in a while) but (a) it costs money and (b) the government abolished it in favour of a vague requirement which adds up more or less to “Think about small businesses.  Are you thinking?  Good.  You can stop now.”

Secondly, HMRC is acquiring a serious reputation for being crap at customer service.  They have closed down the customer contact centres, they are appalling at answering their phones, and they keep getting caught trying to “nudge” our behaviour (and no-one likes to know they’re being manipulated)  So when something new is announced – as it might be, the closure of the national network of tax offices – and any negative feedback is ignored, the belief grows that HMRC is unresponsive to the people it works for, the ordinary taxpaying citizen.

The announcement of the move to digital tax accounts was trailed as the “end of the tax return”.  It was a Budget announcement, one of those surprise moves that you wonder about.  Was the Chancellor sitting there the weekend before the Budget listening to his Malcolm Tucker going, no, this won’t do: there’s nothing hot here: bring me something sexy?  Or is there someone in the HMRC or HMT hierarchy with an actual vision of how tax is going to work in the future and did they get their plan shuffled to the top of the pile?

The point is, it’s a good idea and it just might work. But not without someone articulating the vision and getting the public on board.

What happened, here, to the stage one consultation?  Remember? The 2011 Tax Consultation Framework?  Has it been abolished or is there still a legitimate expectation that there will be “early and continuing engagement” starting with

Stage One: Setting out objectives and identifying options

What would I have done differently?  Announced the objective of making HMRC

more effective, more efficient and easier for taxpayers

and identifying options that included abolishing tax returns, providing prepopulated electronic tax accounts, and moving to a fully digital system.

And then I’d have asked the taxpayers.  A charm offensive with journalists, a few quid bunged to some academics to organise some citizen juries, a dozen HMRC broadcasters retasked to add speech-making to the WI and the Soroptimists and the Lions and all those other organisations that people listen to and where they talk about stuff.

You know.  Made a preliminary stage consultation where you could demonstrate you were actually living up to your own processes and listening to your “customers”; and so you might have half a chance of persuading them you were proposing a change for the better, for once.  Trust me, I’m from the tax office.  That ought to be a slogan.  And not a joke.




  1. I’ve spent rather too much time over the last few days reading up HMRC’s research reports from the last 12 months to see what they are basing their promises on. Cross referencing to ONS, in the roll-out period they need to get one taxpayer up and running every 12 seconds, 24/7, 365 – and every other taxpayer will be “Digitally assisted” (needs help to go on-line) or “Digitally Excluded” (isn’t, and can’t currently get, on-line). Indications from their research are that around 490,000 Digitally Excluded businesses would refuse to go on-line to interact with government even if you removed the alternatives.

    And what’s with the rollout to SME’s first? The Carter Principles still hold true; RTI is no guide to success here, because 3-4m businesses (with 10X as many Digitally Excluded as the RTI population) will be caught by this who weren’t in RTI.

    As you say, spell out the advantages and this could work as a voluntary programme. Mandate it for everyone, in an infeasibly short time-frame, having oversold the benefits? That would be a huge missed opportunity.

    • Yes: and they needed to get on top of the story in the news cycle. Maybe not a good time to be cutting back on the press office?

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