Yes, and, but.February 3, 2017
Is there a communications manager for Making Tax Digital yet? Because – apologies if there is – but it seems to me the communications so far have been, well, pants. Apparently we are no longer MTE (Making Tax Easier) or even Making Tax Digital (MTD) for example, but “MTDfB”. This inelegant acronym stands for “Making Tax Digital for Businesses”, presumably because we don’t want to frighten the
taxpayers horses by suggesting that pensioners and others on PAYE will have to play. Yet.
More importantly, there seems to be no plan to communicate with anyone outside the rather small circle of people who are already tax mavens, with those unrepresented businesses who will be hardest hit by the changes. You don’t believe me? Put “making tax digital” into google and hit the tab for “news”. There is virtually nothing in the general press, although the professional press is of course full of it – but no-one at HMRC is, seemingly, listening to them.
Look, there’s a serious misunderstanding here. The consultation response says that “respondents overwhelmingly support the move to a digital tax system.” No, it’s a recognised letter-writing technique. You don’t think your bank really means you’re “dear” to them when they write to you, do you?
Well, generations of people have been trained to deliver unpleasant messages using the format “yes, and, but…” You start off by finding a point of commonality, something you can agree on. (Yes, it would be good if HMRC had a modern computer system.) Then you go on to add something else you think you can agree on. (Yes, it would be great if tax returns were prepopulated with the information HMRC already holds) and only then do you deliver the unwelcome message. (But making it compulsory to keep electronic records and update four times a year are terrible ideas!)
Yes, and, but.
It’s plain as the nose on your face if you look at the Treasury Select Committee’s report which helpfully summarises the responses under the heading “support for the principle” – yes, we welcome the digital principle, and we think the changes go with the grain of progress BUT… we’re worried about the timetable, about the lack of free software, and above all about mandation.
The whole basis of the current proposal is undermined in HMRC’s own Impact assessment. The projected extra tax in this parliament (to 20-21) is £945m. The projected extra costs to business in the same period? £920m. Extraordinarily, the impact assessment quantifies no costs for HMRC for the proposal, although the original consultation document justified mandation by saying that without it “the return on the £1.3bn investment in transforming tax administration would not have been realised” (para 2.6)
In short, HMRC, your comms are pants, you have misunderstood people’s feedback, and your numbers don’t add up. Sorry and all that.