Archive for the ‘Consultation’ Category

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’twas the night before Budget…

March 7, 2017

It’s the night before the Budget. Why does HMRC have four open consultations on the gov.uk website?

Let’s look at them, shall we?

Withdrawal of extra statutory concessions 2017 is a call for evidence that was issued in January and closes at quarter to midnight tonight.  Unless you’re really interested in the withdrawal of extra-statutory concessions, I suggest we leave that one well alone.

Hybrid and other mismatches – draft guidance is some technical guidance for HMRC staff and for businesses on how the legislation on, er, hybrid and other mismatches will work.  It’s complicated stuff coming out of the OECD BEPS project and I really feel as if I ought to buckle down and make an effort to understand it…

However in the real world…

Simplifying the administration of Alcohol Duty published 16 February, closes 26 April.  This seems like a private conversation between the alcohol industry and HMRC but is being conducted in public for the sake of transparency.  Again, I feel as if I ought to care enough to read it through, but again…

Finally we have:

Sanctions to tackle tobacco duty evasion and other excise duty evasion launched on 17 February and closing on 10 May (according to the website) or 12 May (according to the document). Sigh.

Incidentally I notice that the list of “who should read this” starts with “The general public”.  Seriously?  Then how are they communicating that they would welcome views from the general public?

More to the point, what is it doing sitting on the website today, the day before Budget, when you’d expect there to be a clean sheet of proposals ready for the Chancellor to start overwriting the tax rules again?

Could the answer lie in the paragraph on “getting to this stage” where it says that “at Budget 2016 the government announced that they would consult on sanctions to tackle the illicit trade in tobacco and duty evasion.” And, lo, before the next Budget… so they have.

 

 

 

 

 

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New Year

January 4, 2017

It’s ‘go back to work’ time, oh joy.   The last time I looked there were 106 open consultations on the gov.uk website. If you filter by the subject area of Tax and Revenue you’ll find there are seven:

  • Technical consultation: draft regulations for the Apprenticeship Levy
  • Hybrid and other mismatches – draft guidance
  • Tax-advantaged venture capital schemes – streamlining the advance assurance service
  • Scope of VAT Grouping
  • Tackling offshore tax evasion: A requirement to notify HMRC of offshore structures
  • Simplifying the Gift Aid donor benefits rules: further consultation
  • Employment Allowance: restricting the allowance from employers of ‘illegal workers’

Yeah.  Still can’t list them in the order in which they close, though.

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Worst of all possible worlds

December 6, 2016

You will no doubt remember the six (seven, if you include the summary) consultations on the ambitious “Making Tax Digital” proposals, which closed on 7 November.  At the Autumn Statement there was nothing in the actual speech, but, buried deep in the documentation, there was a statement that the government would be issuing a consultation response in January.

This sounded hopeful, because – if MTD is to be mandatory from 2017 or 18 – then the legislation needs to go into the 2017 Finance Bill and the draft clauses for that were published today, 5th December.

But look what it says here, in OLD (The Overview of Legislation in Draft) at the end of paragraph 6.1:

To ensure that the views of respondents to the consultations are fully considered, the government will publish its response to all 6 consultations, together with draft Finance Bill 2017 legislation in January 2017.  [my emphasis]

So not only is there an absurdly short timescale for the government to consider the multiple responses it is “pleased” to have received on MTD, but it plans to bring forward the legislation, or at least some legislation, anyway, except it will be out a month later than all the rest, shortening the time available for that to be scrutinised.

Poor show all round, I say.

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Consultation trivia

November 8, 2016

So yesterday I managed to polish up the rest of my MTD responses (they were already in draft, but I’ve had the ‘flu so I didn’t get to them in an orderly sequence in the week before the deadline as I’d originally planned) and get them out the door.

I sent six emails, one for each of the six consultation documents, to the five different email addresses listed in them (the business records and voluntary pay as you go proposals share the same response address)

As the evening progressed I had three automated response (from the “process transformation”, “cash basis” and “tax simplification consultation” email addresses)

Think about that for a moment.  Ever set up an “out of office” reply on your email?  If half the HMRC email addresses don’t know how to, or can’t be bothered to, set up a “thank you for your contribution: watch the gov.uk site for the consultation response in the next few weeks” response, well, we have great confidence they can manage to transform utterly the digital offering from HMRC.  Don’t we?

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A quick note on citizen stakeholders. And, tents.

September 5, 2016

I bloody hate the term “stakeholder”.  It started off as a reasonable sort of idea, that a business doesn’t just have to answer to its shareholders but has a wider responsibility to its customers, employees, suppliers and to society in general.  The current usage of stakeholder, so far as I can see, is to mean ‘anyone who might affect or be affected by an organisation’, in other words it’s a word in danger of becoming almost meaningless.  Unless you’re HMRC.

Yes, HMRC had its annual “stakeholder conference” today.  Yes, yes, I know it’s going to look like I’m having a massive attack of Lyndon B Johnson’s tent syndrome because I wasn’t invited, but bear with me.  Whoever they invite (here’s the list from the first one, in 2013) they can’t hope to include everyone.

But they bloody should include everyone, because we are all stakeholders in – affected by the actions of – our national tax authority.  At the very least, you’d think a twenty-first century government department with ambitions to make itself one of the most digitally advanced tax authorities in the world could manage to live stream the conference so we didn’t have to follow it second hand on twitter.

Nobody cares, I think I hear you say?  Well, people don’t know what they don’t know.  I have been conducting a little experiment lately where every time I have a conversation with a small business owner (and I mean a really small business – the hairdressers and taxi drivers of this world, the coffee shop owners and pub landlords) I have asked them about Making Tax Digital, the ambitious plan to make HMRC digital by making us all keep records electronically and none of your excel spreadsheets and carrier bags of records either.  None of my small businesses had heard of MTD, unless I have prompted them with the “four tax returns a year” horror stories from the budget before last, and then it’s been a vague, might have come across it.  And then I have (to the best of my knowledge and ability) explained it, and then I have spent the rest of my visit scraping them off the ceiling and advising them to write to their MP and to answer the consultation rather than shouting at me.

In other words, no-one is interested in HMRC until it does something that affects them.  And MTD will affect us all: we are all stakeholders.  Talk to us all, HMRC: not just to the Usual Suspects but to the people who won’t know they’re interested till you interest them.  Because interested is better than furious, honest.

 

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MTD: it means “making tax digital”. (Why oh why would we want to?)

August 17, 2016

There’s a big hole in the heart of the seven consultation documents the government published on Monday about MTD, the plan to “make tax digital”, and it is this: why the hell are they doing it in the first place?

Seriously.  The overview document begins

The way you interact with the tax system is changing. From 2018 it will become increasingly digital and most businesses, the self-employed and landlords will need to use software or apps to keep their business records, and to update HMRC quarterly. The underlying tax rules will be simplified to support these changes.

Note the passive “is changing”.  Not the active “we are changing it…”

The main business document tells us baldly that it is consulting on how and not whether to MTD (make tax digital).

At Autumn Statement 2015, the government announced that, by 2020, it would require most businesses, self-employed people and landlords to keep track of their tax affairs digitally and update HM Revenue and Customs (HMRC) at least quarterly via their digital tax account. This consultation considers in more detail how these new processes should operate.

The Ministerial introduction tries to allay any fears we may have:

Freeing businesses from red tape and allowing them to flourish is a central part of our long-term economic plan for Britain. Businesses want a simpler tax system.

This is why at the 2015 Spending Review the government announced it would invest £1.3bn to transform HMRC into one of the most digitally advanced tax administrations in the world. We want to create something that is more effective, more efficient and easier for taxpayers.

OK then, but why (in the impact assessment chapter, on page 60) do we identify administrative burden savings for business of somewhere between £85m and £250m globally as against a saving to the exchequer (page 67) of £945 million – plus an uncosted benefit to HMRC from “significant operational changes”, including the orwellian “enhanced risk rules which will build in upstream compliance through nudges, prompts and personalised messaging for businesses” (page 71)

My problem is I think there’s probably a good idea in there somewhere, but HMRC have lost their mojo as far as communications are concerned.  They can talk to “stakeholder groups” all they like but they aren’t reaching the rest of us – and it’s human nature that commentators *cough* who aren’t on the “stakeholder” lists are going to be a bit pissed off that they had to find out about the condocs from twitter or from the Daily Telegraph.  My sole (thus far) academic paper is entitled “Tax Prats and Citizen Stakeholders” and “argues that othering non-professionals as ‘tax prats’ should cease in favour of inclusion of ‘citizen stakeholders’.”  In other words, we are all stakeholders in our country’s tax system and the conversation about a change as sweeping as this one shouldn’t take place only between professionals, whether they be professional tax practitioners or professional commentators.

What would I have done differently?

Well look at online tax returns.  In 2015 85% of us, over ten million people, filed tax returns online.  In 2002 it was seventy five thousand.  Why the change?  Because it’s easier, there’s no compulsion, and because there are benefits for both sides (you can do it later, and it works out how much you need to pay).

I’d have built an app and put it out onto the app stores and let people see for themselves whether it was better.  I’d have had a Hector the Inspector avatar walk you through what to click to get it to work and hired Ewan McGregor to do his Alec Guiness lite voice over.

I’d have made it simple as a game and made it work with all the most common accounting packages.  I’d have made it like a fitness app or a calorie counting app, where you can get the data from elsewhere (a fitbit or a barcode on your shopping, or in this case a bookkeeping app) or you can enter the data yourself… and then press a button to close it off/agree it’s correct.  I wouldn’t have linked it to the HMRC systems but I’d have had it tell users that “if your results for this quarter were repeated for the rest of the year you would need to pay [x amount] of tax and NIC”… and then I’d have worked out a way to make final result (“if you’re happy with the figures, click here…”) flow to the HMRC system, even if that bit had to wait a year or two.  I’d have spent half a million developing a clever, cute little app that did at least some of what the MTD project is supposed to do and put it out there free of charge for people to try if they felt like it, use if they wanted to.  And THEN we could have had a meaningful conversation about how to get people to use it, without arguing about whether we’re talking about four tax returns a year, compulsory photographing of receipts and using the system as a “cash cow”.  If you build it, they will come.

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Holiday reading?

July 20, 2016

If I’m reading the Parliament website correctly (and always assuming nothing has changed with the change of Prime Minister), then Parliament “rises” – goes on holiday – tomorrow, 21st July.  They will be off for the summer, coming back briefly for ten days in September before the party conferences, until term starts properly again on 10th October.   (And even then the poor dears will need a break for a week in November – what DO they do all day! – to see them through to Christmas.)

It really makes you wonder about the 65 open consultations listed on the gov.uk website today, doesn’t it?  Are people really going to give up some of their time to give their views on, say, the future of the inter-city West Coast rail franchise (closes 8th August) or the Personal Independence Payment (PIP) assessment: second independent review call for evidence (closes 16th September) when the Minister who signed off on the actual consultation may not be in place when the results are in, and in any event policy priorities are likely to have changed?

HMRC has six open consultations: each of them opened on 26th May and each has a closing date in August (and, great flying spaghetti monster, after all this time and a positive recommendation from the House of Lords Merits Committee why can gov.uk STILL not manage to let you list consultations in order of closure date???)

HMRC also has a new minister: Jane Ellison MP, the new FST.   Maybe the most useful thing she could do on her last day before the recess might be to have a quick look at the six consultations, check whether they still align with the new priorities she’s (presumably) going to be setting for the department, and decide whether they need to go ahead.  It’s my guess that a notice on the website (plus an email to “stakeholders” and other “usual suspects” who might be working on responses to the consultations) to the effect that they’ve been put on hold: take the summer off and come back in September… might be quite welcome.  What do we think?

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Quick update

June 1, 2016

Just a quick update to say that I have now received an acknowledgement of my response to the Land Registry consultation.  Nothing so far from the BIS consultation coordinator about why there were two different consultation email addresses on the website and what assurance there is that all our responses were received.

If you responded, I strongly suggest you check: did you get an acknowledgement?  Even if you didn’t explicitly ask for one, re-send your email to lr.consultation@ukgi.gov.uk with a copy to the BIS consultation coordinator angela.rabess@bis.gsi.gov.uk and make sure.

If you responded and did get an acknowledgement, please let me know in the comments below – and which address did you send it to?

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Land registry: and another thing

May 27, 2016

The Land Registry privatisation consultation closed last night at quarter to midnight.  So I had a quick look yesterday evening to see if I’d had the acknowledgement which I’d asked for by ticking the relevant box on the response form and explicitly in the covering email.  I hadn’t.

On the principle of “it’s probably me”, I had a quick look to make sure I’d sent it to the right email address…

…and I found a curious thing.

If you look at the covering page for the consultation on gov.uk you will see you were directed to send your responses to lr.consultation@ukgi.gov.uk

(The page has now been changed to show the consultation as closed, and, dammit, I didn’t think to take a screenprint.)

But the consultation document itself gives the response address as lr.consultation@ukgi.gsi.gov.uk.  Party, brewery anyone?  I tweeted about it before the deadline (just!)  I also wrote to the consultation coordinator at BIS (named in the condoc) last night and asked for assurance that both email addresses are live and that everyone who responded will have their responses considered – watch this space.

The addresses are interesting, though.  I did wonder about the “ukgi” element, thinking perhaps that the civil service had moved to a new provider and that instead of “gsi” the format would now be “ukgi” – but that didn’t make sense when you had an address which had both “ukgi” AND “gsi” in it.  The usual format of civil service email addresses is firstname.surname@dept.gsi.gov.uk

…and so I looked again at the condoc.  Which says it is produced by BIS, the Department for Business Innovation and Skills, on the face of the document.  But on the consultation website, it’s listed as a production

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Fire sale

May 24, 2016

Yes, I know I said I’d be away for a fortnight.  I am “away”, insofar as I’m away from home on a writing retreat, but my plans for a digital detox have had to be put on hold.  Because this one is important: look.  They’re after the Land Registry again.

“Have the Government failed to notice that the Land Registry has a customer service satisfaction rating of 98% – a rating that many large-scale, international and well-known organisations would love to have – that it operates at no cost to the taxpayer and that it made £98.8 million last year for the Treasury?” (Sian James, Westminster Hall debate)

When the former coalition government consulted on separating out some of the functions of the Land Registry into a company that could then be sold off, they were flooded with responses.  Responses from individuals hit three figures (trust me, I’m usually one of a very small number of individual responders, and the government has a tendency to consider individuals who respond to consultations as cranks anyway – see the response document here at para 29, which appears to dismiss the responses from the “number of respondents (who) were strongly opposed to the underlying proposals”.  Well, duh!)

However.  “91% of respondents did not agree that creating a more delivery-focused organisation at arms length from the Government would enable Land Registry to carry out its operations more efficiently  and effectively” (same response document, para 30)

So why the hell are we here again, with this consultation which closes on Thursday night (26 May 2016 11.45pm) quite explicitly seeking views on Land Registry: moving operations to the private sector

It’s blunt.

This consultation sets out options to move Land Registry into the private sector.  A sale of Land Registry is expected to deliver a capital receipt for Government.  This can be invested elsewhere for the benefit of the tax payer.  In addition, it is expected that a transaction could support Land Registry to be run efficiently and effectively and support the UK property market

A capital receipt.  If you have savings, perhaps an ISA, it’s like closing one account and opening another.  You sell the shares that are sitting in your ISA and get a sum of money you can invest somewhere else.  Wouldn’t the first question you would ask, though, be whether you could get a better rate of return somewhere else???  Do we believe the government – this government – plans to “invest” any money it gets from flogging off our assets into anything except day to day spending?

Also, it is “expected” that it “could” make it run efficiently and effectively?  When the evidence is that it is already running both efficiently AND effectively now, as a public sector organisation?  Why move from certainty to probability?

OK, let’s look at it.

Q1: Do you agree that ownership of the Registers should remain in Government?

Yes (“The Registers” are the result of the work of the Land Registry and the accumulated knowledge and data it has acquired over its history.  Of course that’s a key government task, to know who owns the land.  But the knowing is only achieved by the acquisition of knowledge: what value the registers if you then privatise the processes by which they are updated?)

Q2: What steps should government take and what safeguards should it put in place to ensure continued and improved access to high-quality and reliable Land Registry data?

Paragraph 33 of the condoc: “As the organisation becomes more digital, so the potential value of the data increases.”  It is foolish to sell off an appreciating asset: the best safeguard of its continued quality would be to retain it in public ownership.

Q3: How could government use this opportunity to improve the quality and accessibility of data produced by Land Registry for all sectors of the economy?

The government thinks we gave the wrong answer the first time they consulted because we didn’t understand the question.  The Land Registry didn’t make a “profit”, it accidentally produced a “surplus” because it did more searches than it had forecast and the surplus can’t be a profit because it’s not allowed to make a profit: “it is not currently allowed to generate a profit from core statutory functions, because fees must not be used to generate revenue for the Government to spend elsewhere – that is the purpose of taxation.”  Here’s an opportunity then: let it use its accidental surplus to improve its services and produce better quality and more accessible data.  Just don’t call it a profit…

Q4: On what basis should government manage the relationship with a privately owned Land Registry to ensure Land Registry meets, as far as is reasonable, the data quality and availability requirements of all stakeholders?

Because this works so well in other, arms length organisations, doesn’t it?  Outsourcing the buildings governments work in and their day to day management to opaque owners in tax havens really helps get the light bulbs changed and the bog rolls restocked.  Basically the story goes like this: send something outside of the public sector.  The expert staff go with it and get a stonking pay rise.  The remaining department tries to manage the relationship.  The agile private sector organisation runs rings round them, because they took all the knowledge and expertise – that the taxpayer had paid for and which is invested in the staff – with them.  The simple answer is: don’t do it!

Q5: do you agree that the suggested safeguards should be included in any model?

Q6: are there any other safeguards that you think should be included?

First, don’t sell it.  Second, if you have to sell it, supervise it.  Third, if you’re going to supervise it, make sure the supervision isn’t done only by the usual suspects: have some sort of supervisory board that includes representatives of citizen organisations as well as big businesses.  You could, for example, have it supervised by a Parliament of representatives elected by ordinary citizens… if you didn’t sell it in the first place.

Q7: Do you agree with the preferred option?

Q8: What are your reasons for your answer to question 7?

No: the preferred option is to flog off everything about the Land Registry except the actual Registers.  I much prefer the “status quo” option dismissed at para 89 because it does not meet the government’s objectives.  However the government objectives of “reclassification from the public sector” and its “clear requirement of maximising capital receipt” are not supported by evidence.

Q9: Do you think an alternative model would be better and why?

Yes: the “BBC model”.  Government should set the Land Registry free of the requirement to charge only what covers its costs and instead allow it to raise its charges by a capped formula (inflation +x%, as is done in the privatised railways)  It would remain, like the BBC, a non-profit organisation owned by the nation and run for the benefit of its citizens.  However its day to day running would be a matter for its own Board of Management and it could achieve “reclassification from the public sector”.  Maximising capital receipts would not be met, but instead it would produce an income stream.  Like refraining from selling the flat you inherited from your granny, but instead letting an agent manage it and enjoying the profits.

Q10: Are there other key costs and benefits that you think we have missed?

You were being disingenuous about the capital receipts thing at the beginning, weren’t you?  “Finally, it would raise revenue for Government that can be used to reduce the unsustainable level of public debt or be used to fund other public spending which is a key objective”.  (para 93)

Please think about going here and contributing a response to the “consultation” if you can: if all else fails and you don’t have time, simply email lr.consultation@ukgi.gsi.gov.uk with your thoughts.  Before 11.45 pm tomorrow!