Archive for the ‘Consultation’ Category

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Simple

May 17, 2016

The guidance for the Civil Service on the so-called “purdah” period before the EU referendum is contained here, in the letter from Sir Jeremy Heywood to Sir Nicholas Macpherson dated 23 February.  It is slightly different from the usual election guidance in that it acknowledges that Ministers can be arguing either side of the case and still expect support (support in the sense of provision of information and services, not in the sense of  cheerleading or even agreement) from their Departments.

Consultations on tax changes are usually in the “don’t publish” category before elections (“government consults on whether to give us all £5000 after the election.  And a pony!” doesn’t go down well with the other parties, after all.)  But equally, this is the time of year you would be hoping they would publish the batch of any consultations coming out of the Budget, so that people have time to look at them before they go on holiday and get a response in before the Autumn Statement.

So what have we got?  Not, frankly, a lot.  The first date is the closure date, not the publication date, of course.

(plus the one about licensed tobacconists I have already briefly discussed here, a purely HMT consultation about corporate contributions to grassroots sports, and a joint DCLG, HMT and VOA consultation on business rates and revaluation)

Is that the right number of consultations for this time of year, with a referendum on the horizon?  Too many?  Not enough?  Who knows!  But it puts an idea into my head.

First of all, enough with the fiddle-fiddling around with bits of the mechanism, like a hobbyist playing with his hi-fi.  It doesn’t matter where you position the speakers, where you put your chair, whether you can hear a difference between the CDs and the vinyl and whether or not you carefully place a sixpence on the record arm.  Stop playing with the system for a moment and just listen to the music!

The tax system, in this analogy, is a complex orchestral piece that will never be finished and never be perfect.  It’s creaking along, and all you are doing by fiddling with it is stopping it from falling over altogether.  Maybe instead of a “purdah” we could have a self-denying ordinance and simply Stop Changing The Tax System for a while: how about, for the rest of this Parliament, say?  Give it a rest!  Listen to the silence!

Yes, I know HMRC and the Treasury will argue they need to stop up the holes that busy people keep nibbling away at the walls.  I call bullshit.

Let’s find out how much it costs to pass a piece of legislation.  Yes, I know all about administrative burden, but I’m not talking about that.  I’m talking about “legislative burden”, if you like.  How much does it cost us, the taxpayer, to have HMRC issue a consultative document and read and analyse the responses, for Ministers to reach a decision on whether or not to go ahead and give instructions to continue, for MPs to sit in Parliament and discuss it, for the building not to fall down round their heads while they debate it, for Hansard to report it, for Parliament TV to broadcast it, for it to be printed onto archival quality paper and on vellum and for someone to walk round to Buck House and wait while her Majesty puts her signature on it, for it to be printed and put on sale and put onto the internet…

Let’s look at the TIINs.  Let’s add the legislative burden to the administrative burden and then take away the exchequer impact, and let’s think of a number.  Say, what, ten million quid a year?  Let’s simply make it a rule that no tax legislation will be put before parliament unless the TIIN shows that, after netting off the legislative and administrative burden, the change will bring in at least ten million quid a year.

Tax simplification?  It would be a start.

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Clearing the decks

March 15, 2016

It’s the day before the Budget. You would think that HMRC and the Treasury would have cleared the decks ready for the raft of new measures presumably coming towards us after the speech.

So I was rather surprised when a quick check of the “open consultations” tab on the gov.uk website brought up one outstanding HMRC consultation and four for the treasury.

The HMRC one is mildly interesting: “a consultation on the control of tobacco manufacturing equipment and possible licensing of those involved in the supply chain for tobacco products.” Woah, you might think: we’re going to have licensed tobacconists??? Turns out from reading the consultation document that there are already arrangements in place for tobacconists in Scotland, Wales and Northern Ireland to be registered: the issue for most of us will, I imagine, be how to get an equivalent process in place for England without on the one hand opening up a market in cross border arbitrage and on the other slapping an enormous administrative burden on some relatively marginal small businesses.

The four Treasury ones? The first two: Reforms to the investment bank special administration regime and Insurance linked securities are Letwin consultations. By Letwin consultations I am of course referring to Oliver Letwin’s explanation that the point of consultation isn’t to get “views” but to look for unintended consequences. No-one at the Treasury cares what you or I think about the investment bank special administration regime or about index linked securities. What they want from the consultation is for investment banks, accountancy bodies and major law firms to do some work for them on whether their proposals – whatever they are – work at all, work as intended, and will pass through parliament without annoying lobbying from the industries affected.

I sort of feel that, as this started as a blog looking at consultations, I really ought to read both consultation documents and attempt to form a view whether they are good proposals. I feel, however, that a Letwin consultation is designed to induce somnolence in the general reader, and I just don’t care enough today to even try, sorry.

I will reserve my indignation for the other two Treasury consultations. If you have the time and the inclination, I recommend looking at this one: the proposal to create a National Infrastructure Commission, or at least to put the “shadow” one that has already been set up onto a statutory footing.

This consultation closes on Thursday night (11.45pm 17th March) and asks, in effect, if we think it’s OK that the Treasury sets up a quango – sorry, that’s not politically correct these days, is it? Now we call them “non-departmental public bodies”. The Treasury will set up an NDPB which will produce a National Infrastructure Assessment (NIA) and do we agree that a GDP envelope would provide the most effective fiscal remit for the commission…

Can we imagine the post-war Attlee government setting up the National Health Service like this? The National Health Infrastructure Board would still be holding meetings to decide whether the GDP funding envelope would allow them to start building a hospital at some point in the not too distant future, if the existing providers didn’t mind too much and the government accepted their latest Health Infrastructure Advisory Report…

And the final Treasury consultation? They want to make public sector exit payments “fairer, more modern and more consistent”. In other words, they want to get rid of huge swathes of the civil service and they don’t want to pay the going rate for doing so. What? You thought any of those weasel words meant that they were suggesting consistent or modern fairness to their workers?

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Views

January 27, 2016

You couldn’t make it up.  Or perhaps you could: the Daily Telegraph seems to be the only source for the news item at present so perhaps they had a testing-the-waters quote from the Minister responsible or someone in his office, because of course a respectable news source wouldn’t make up something like this.

Like what?  Well, it seems the BBC Charter Review consultation had over 190,000 responses – you’d think that would be a cause for celebration, but, no!  It’s not fair, says the government, apparently.  When we said “public consultation” we weren’t expecting mere opinions from mere members of the public, obviously!  We’ve had to take on extra staff to read them!  It cost us actual money! (And won’t the Freedom of Information Act requests for details of who, where from and how much they were paid be interesting!)

They needed an extra 25 staff?  For three months?  and – if we are to believe the Daily Telegraph

it has taken more than 10,000 man-hours to count the submissions

Here’s a tip: if it takes you ten thousand “man-hours” just to count the responses, you’re doing it wrong.  They came in electronically – I know, I responded.  Computers can count stuff like that much faster than people.  Maybe, I don’t know, employ some women next time???

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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.

 

 

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O Canada!

January 8, 2016

Now if you ask me, this is how you do a consultation!  The Canadian authorities start now, with an accessible invitation to citizens to come on board with their thoughts as to what should be in their next Budget.  (Hat tip to Jill Rutter at the Institute for Government for the original mention on twitter:

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You might also like to look at her old blog post commenting on the adequacy of our own dear Treasury’s “budget suggestions portal”)

Because, actually, who has a right to be involved in the conversation about tax? If you are a regular reader of this blog you can probably guess my answer: we have.  We, the citizens, the tax muggles, the taxpayers, have a right to take part in the conversation about tax; it’s not a topic that should only be addressed by “experts”.

What has wound me up about the topic today?  This consultation about the tax deductibility of corporate interest expense.  It closes on 14th January: I was going to make it my first consultation response of the year, and then I thought I might not bother, and then I skimmed the first few paragraphs, and then I got

r e a l l y   a n g r y…

Here’s the rubric on the consultation page:

This consultation will look at:

the key aspects of the OECD recommendations regarding best practices in the design of rules to prevent base erosion through the use of interest expense
how specific issues could be addressed in a UK domestic policy context.
This consultation is open until 14 January and the government will consider responses in the development of a future business tax roadmap.

OK, so we know the government is developing this “business tax roadmap” (because business needs “certainty” about tax, whereas the rest of us will be happy with the usual government mess of making it up as they go along?)  And I’d heard of BEPS – the base erosion and profit shifting project – which is one of the things that I vaguely meant to get on top of one day, but essentially is the international project (in the Organisation of Economic Co-operation and Development – OECD) to stop multinationals from pretending they have to pay all their income from selling you (say) coffee in (say) Sheffield to some corporate knowledge bank in (as it might be) The Netherlands, because no-one else knows how to make coffee…

Now I thought David Cameron was all in favour of BEPS – that the UK was setting the agenda and taking the lead...

Which is why I’m a bit surprised that

we are publishing this document now to seek views from all stakeholders on how best to respond to the OECD proposals. We are interested in the views of all stakeholders on how to address BEPS issues involving interest expense in an effective and proportionate manner. The results from this consultation will be considered in the development of a future business tax roadmap. [David Gauke’s introduction to the consultation document]

“Effective” and “proportionate” are, I imagine, code words for “impotent” and “ineffective”?

To me this looks like an attempt to take the principles that tax justice campaigners have worked for – ending the erosion of the tax base, ending profit shifting to tax havens, introducing country by country reporting – and letting the poachers work out the rules of engagement that will bind the gamekeepers.

Look at the slide set from the “stakeholder event” held on 14th December last year.

(Incidentally, one of the objectives of the day was

  • To encourage and facilitate constructive written responses to the public consultation

because god forbid we should get unauthorised muggles giving their views!)

You will see from the first page of notes (after slide 16) that there is a description of the “stakeholders” attending the meeting.

There were 73 representatives from a wide range of business sectors including manufacturing, retail, services, oil and gas, utilities, telecoms, publishing, infrastructure, real estate, banking, insurance, and fund management, as well as from accountancy and legal firms, regulators, trade associations, civil society organisations and academia.

Now: who in that list represents you?  What stakeholder was protecting the interest of the ordinary taxpaying citizen?

Perhaps it would be easier to look at the list of the actual organisations represented:

Association of British Insurers (ABI)

Action Aid

Association for Financial Markets in Europe (AFME)

American International Group (AIG)

Alternative Investment Management Association (AIMA)

Allen & Overy

Alvarez & Marsal

Amazon

Anglican Water Group

Anglo American

Asos

Association of Investment Companies (AIC)

Association of Real Estate Funds (AREF)

BAE Systems

Baker & Mckenzie

Balfour Beatty

Barclays

British Bankers’ Association (BBA)

BDO

Base Erosion and Profit Shifting (BEPS) Monitoring Group

BG Group

BHP Biliton

BP

British Property Federation (BPF)

British Land Corporation

BT

Confederation of British Industry (CBI)

Chartered Institute of Taxation (CIOT)

Deloitte

Diageo

Disney

Duff and Phelps

Evans Property Group

EY

Ford

Freshfields Bruckhaus Deringer

G4S

General Electric (GE)

Grant Thornton

GlaxoSmithKline (GSK)

Heathrow

HSBC

Institute of Chartered Accountants of Scotland (ICAS)

Informa

InterContinental Hotels Group (IHG)

Investment Association

Investment Property Forum

Johnson Matthey

KPMG

Liberty Global

London School of Economics and Political Science (LSE)

Microsoft

National Grid

Nomura

Norton Rose Fulbright

Ofwat

Oxfam

Pearson

Pinsent Masons

Prudential

PwC

Rolls Royce

RSM

Santander

Severn Trent

Shell

Slaughter & May

Tesco

Unilever

United Utilities

Vodafone

XL

(incidentally I make that 72 and not 73)

Now, if I had been David Gauke, I would have had a few select financial journalists in for a chat and made it clear that we were looking to be, and to stay, at the forefront of the BEPS project and tried to get them excited about the idea of a proper consultation, with taxpaying citizens and not just the Usual Suspects.  And then I would have emulated the Canadians and organised a google hangout and a webpage and a hashtag and a Facebook page and an appearance on Jeremy Vine and…

I’d have asked us.

It would have taken some explaining what the question was, but I don’t for a moment believe that the taxpaying public is incapable of understanding the question nor uninterested in the answer.

Who’s for a google hangout to thrash out a Muggles’ Charter?  The government wants to “encourage and facilitate constructive written responses” so let’s answer the call.

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Culture

October 8, 2015

It’s odd, isn’t it, that when you search on the gov.uk consultations page for open consultations in the area of “arts and culture” the website returns no results.  If instead you set the search fields to “all” and the filter to “BBC” you will find that there is indeed one open consultation.  Personally I would put a consultation by the Department of Culture, Media and Sport on the future of the BBC firmly into the “arts and culture” bracket, but let’s not draw our conclusions too early.

The consultation closes today, 8th October at 11.45pm.  I urge you to respond if you can: there is an electronic form here or you can send an email to BBCCharterReviewConsultation@culture.gov.uk.

The consultation document comes, curiously, in a choice of portrait or landscape formats, and, for once, in English or Welsh without the requirement for the Welsh-speaker to ask separately.

The front cover of the document also suggests a hashtag, #yourBBC, which on my twitter feed opens with a “promoted tweet” (an advert) for, ironically, Amazon Instant Video.  The hashtag itself seems to contain a lot of tweets urging people to respond to the BBC Trust’s own consultation which apparently closed in September, and a number of comments regarding the “confusing, misleading” questions in the current consultation.  I have also had emails from the campaigning organisation 38 Degrees urging me to complete the consultation and offering a version of the form which contains 38 Degrees’ annotations explaining the questions and suggesting the kind of areas you might want to stress in your answers.  The annotated survey is available here: on the one hand I think it’s useful to have large numbers of people responding so that the government understands that the BBC really is “our BBC” but on the other I think there is a danger that large numbers of responses channelled through one campaign website may be ignored.

So let’s have a look at the actual condoc and see what’s proposed, shall we?

There are 158 pages (did they really expect many people to read it?) and there are four themes:

  • “Mission, purpose and values” (or, why have a BBC at all)
  • “Scale and scope” (or, what should the BBC actually do)
  • “Funding” (or, how are we going to pay for it) and
  • “Governance” (or, who is in charge)

I’m very much a Reithian as far as the BBC is concerned.  The BBC’s purpose is to inform, educate and entertain. As to scale and scope, I believe you should be able to sit and watch BBC1 and see some of everything: the exact opposite of the self-curated internet bubbles we all seem to live in where it is quite possible to see only things with which you are already familiar and discuss them with people with whom you already agree.  Funding: the licence fee works, although it should perhaps be modernised to reflect the wired world we live in.  Make it payable at a reduced rate by household, but with the reduction paid for by a small levy on the sale of new phones, tablets and computers, and make non-payment a civil and not criminal offence.  Governance?  I’m less fussed about how the board is constructed than by who is on it.  Personally I’d love to be on the Board (I’m not completely a fantasist: I have been a tv critic in my time and did some work for the Fawcett Society and NAWO on the Broadcasting Act before last) but can’t see it ever happening.  I would like to see the Board made up of representatives of actual viewers as well as of the so-called Great And Good.

So now you know my opinions, how did I get on with the consultation itself.

I completed the online survey (not via 38 Degrees website)

There are nineteen questions across the four themes where the annotated 38 Degrees version has only eight.  I found the annotated version useful to give a steer as to the leading nature of the questions and if you’re short of time I’d suggest answering via their website is better than nothing.  Here are the 19 questions and my answers in full.

1. How can the BBC’s public purposes be improved so there is more clarity about what the BBC should achieve?

I don’t agree there’s a lack of clarity at present. The BBC should inform, educate and entertain.

2. Which elements of universality are most important for the BBC?

This is a poorly-expressed question! The BBC should provide a service where, if any British citizen were to have access ONLY to the BBC’s output, they could take an informed part in civil society and in the conversations of their neighbours. This includes the provision of excellent subtitling and audio description services for those with hearing and sight problems.

3. Should Charter Review formally establish a set of values for the BBC?

No. The BBC already has a set of values embodied in its history of informing, educating and entertaining the nation.

4. Is the expansion of the BBC’s services justified in the context of increased choice for audiences? Is the BBC crowding out commercial competition and, if so, is this justified?

Yes! As to “crowding out”, the glory of the British broadcasting ecology is that there is competition, not just between commercial companies with the same profit-seeking motive, but between differently funded organisations. So if the commercial broadcasters feel “crowded out” by the BBC, then good! Let them compete by doing better, not by whining about the competition.

5. Where does the evidence suggest the BBC has a positive or negative wider impact on the market?

In the programmes! In the history of different funding models in different countries, where the UK model is widely seen as excelling.

6. What role should the BBC have in preparing for the future technological landscape including in future radio switchover?

Commercial providers tend to drop a new technology onto the market and let consumers sink or swim in operating it. The BBC has a history of informing and educating (the BBC micro, for example) which should continue. They shouldn’t have to bear the costs of the commercial broadcasters, though!

7. How well is the BBC serving its national and international audiences?

Brilliantly (except its subtitling, which could do with some serious thought)

8. Does the BBC have the right genre mix across its services?

Yes.

9. Is the BBC’s content sufficiently high quality and distinctive from that of other broadcasters? What reforms could improve it?

It is sufficiently high quality. Why does its content have to be “distinctive” from other broadcasters? It isn’t broken – don’t try to fix it. Politicians should keep their hands off.

10. How should the system of content production be improved through reform of quotas or more radical options?

Talk about your leading question! The BBC should – and does – have a mix of London and non-London production, of English, Welsh, Scottish and Northern Irish production, and of independents and in-house production. Again, leave it alone please.

11. How should we pay for the BBC and how should the licence fee be modernised?

Again, what a leading question! Yes, we should pay for the BBC via the licence fee. Yes, it should be modernised by making it a civil rather than criminal offence not to pay, and there should be a reorganisation so that it is levied by household, not television, with a slightly lower licence per household supplemented by a small levy added to the cost of a new phone, tablet or computer.

12. Should the level of funding for certain services or programmes be protected? Should some funding be made available to other providers to deliver public service content?

Absolutely not! Politicians should agree the funding settlement for the BBC and then leave it alone. And under no circumstances should licence fee money go to “other providers”.

13. Has the BBC been doing enough to deliver value for money? How could it go further?

Yes. Leave it alone.

14. How should the BBC’s commercial operations, including BBC Worldwide, be reformed?

Another appallingly leading question! They should not. They aren’t broken. They don’t need “reform”, you are just getting pressure from commercial rivals which you should resist.

15. How should the current model of governance and regulation for the BBC be reformed?

It is not clear to me that it should! Government should keep its hands off, and there should be more civil society representation on the Board perhaps but otherwise I can’t see a need for change, just an opportunity to meddle, which it would be better to resist.

16. How should Public Value Tests and Service Licences be reformed and who should have the responsibility for making these decisions?

You have not demonstrated a need for reform. The BBC is working well: leave it alone.

17. How could the BBC improve engagement with licence fee payers and the industry through research, transparency and complaints handling?

Does it need to “improve”? Its engagement is already high.

18. How should the relationship between Parliament, Government, Ofcom, the National Audit Office and the BBC work? What accountability structures and expectations, including financial transparency and spending controls should apply?

The BBC is not a government department. Parliament and Government set the terms of the Royal Charter and the licence fee and after that should leave the BBC alone. NAO might usefully ensure no corruption or maladministration creeps into the BBC’s systems and Ofcom should work with the BBC Trust. But I shudder at the thought of government “spending controls” on the BBC.

19. Should the existing approach of a 10-year Royal Charter and Framework Agreement continue?

Yes; except in future it should begin from the viewpoint that, if the BBC is working satisfactorily, government should leave it alone. In other words the ten year review should begin from a presumption that things will stay the same and that a strong evidence base is required before any changes are made.

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State of play

September 16, 2015

So there are fourteen open consultations listed as relating to HMRC on the gov.uk website today.  If you filter instead for the “tax and revenue” policy area (all departments) the total comes up as 18 – four from the Treasury.  Query: why are some tax consultations badged from the Treasury and some from HMRC?  Answers on a postcard…

The first is a review of travel and subsistence rules.  It was published under the coalition government, in July 2014, but says that it closes at quarter to midnight on 1st May 2016.  I find this rather improbable, and I wish gov.uk would have a look at it.

You have until 30th September to respond on the taxation of performance linked rewards paid to asset managers, employment intermediaries and tax relief for travel and subsistence, ISA qualifying investments and crowd funding, and the IR35 discussion document

You need to get motoring to respond to the implementation of the Personal Savings Allowance and the deduction of income tax from interest in peer to peer lending which both close on 18th September.  The other handful all have closing dates in October.

But I could have read and perhaps responded to one of them in the time I’ve taken today trying to identify which one to prioritise.  Because apparently listing consultations with a visible closure date and/or in the order in which they close remains beyond the wit of a twenty first century government.  Or, as I said on Facebook yesterday, you’d almost imagine they didn’t want responses from Jo Public.

 

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Citizens and tax justice

September 15, 2015

How are citizens to engage with tax policy?  One method, the one which led to the foundation of this blog, is to seek out and respond to tax consultations.  In theory, any citizen can find, read, consider and respond to the government’s proposals for the tax system via the list of consultations published on the gov.uk website.

In practice…?

Well, a few weeks ago I saw a couple of tweets about a proposal to charge fees for taxpayers to challenge HMRC decisions at tax tribunals.  It started here:

and more detail came from this:

Because here it is: the actual consultation document is on the Ministry of Justice site under the splendid title of “Enhanced fees for divorce, possession claims and general applications in civil proceedings and consultation on further fees proposal

Now, I don’t know about you, but to me this does not immediately say “there’s a section about tax tribunals!  You need to read this, honest!”  It does not come up if you filter the “open consultations” section of the “consultations” page on gov.uk by the “tax and revenue” policy area, for example.  How were we to know it was there?

Having found the page (from the links provided on twitter) I was rather taken aback to see it described, in the overview, as “the government response to the consultation on enhanced fees for possession claims…” and it took me a while to work out that it was the final paragraph that must refer to the tax tribunal proposals (“In addition, we have today published a further consultation on a number of new fees proposals. This consultation proposes new or increased fees in a range of court and tribunal proceedings and the detailed proposals can be found in chapters 3 and 4 of the document provided below.”

The “document provided below”??  There are some documents “below”, three listed under the heading of “previous consultations” and seven under “related documents”.  It is not at all obvious which document contains the new proposals.  Where, then, are we to look for details of the proposals on tax tribunals?

Well, I’m an Impact Assessment wonk, so I started with the final document, the Impact Assessment for the “introduction of fees” to (amongst others) the “First Tier Tax Chamber, Upper Tier Tax Chamber” (IA No: MOJ008/2015)

What do we learn from this?  Well, first of all the perceived problem seems to be that the tribunals don’t cover their own costs and that government action is required to “reduce the burden on the taxpayer”.  Now to me this is begging rather a number of questions.  When, firstly, did we require courts to cover their own costs?  Isn’t the cost of justice precisely one of the reasons for having a tax system in the first place?  Isn’t it part of the deal we make in living in a functioning state, that the state will collect money from us in taxes but in return will provide us with security including a system of justice?  In other words, I reject the basic premise of the IA: this is not a problem that requires government action.  Collecting fees from applicants for justice is not justice: it is commerce.  It is the Ritz Hotel model of equality, where we all equally have the right to dine at the Ritz but only those with sufficient cash in hand are able to exercise that right.

Next, “what policy options have been considered, including any alternatives to regulation? Please justify any preferred option.”  Now this looked promising, at least in the sense that there are five options listed.  They are, however, different strands of the SAME proposal: there is a “do nothing” option, option zero, and then there are five separate options listed, the second of which is the tax chamber proposal.  These are not alternative options, they are different elements of the same proposal, the proposal to impose fees.  There is no suggestion that the perceived “need” to make the tax tribunal cover its own costs might be met in several different ways.  Off the top of my head, you could meet the court costs by a grant from HMRC, by a charge to anyone losing a case where tax at stake was more than £x million, by a percentage levy on the losing side in proportion to the tax at stake or by, I don’t know, starting a court tv service, televising the tribunals and selling bloody advertising. My point is, those are four different alternative options.  “Do this or don’t do it” isn’t presenting options at all: it’s a statement of intent.  Particularly when you say, as the government does in the impact assessment (under “Will the policy be reviewed?”) that once charges have been introduced the decision “will not be reviewed”  Why the hell not???

Turning to the “evidence” base, the scant material has been repeated five times so it looks as if someone has given it consideration, but a cursory glance at the actual material suggests otherwise.  Look at the bottom of page 15 where the evidence base for the tax tribunal proposals begins.  It reads:

45.  When cases are first issued in the First Tier Tribunal, they are assigned a case category (Paper, Basic, Standard or Complex) by the tribunal.  This is

However if you turn to page 16 hoping to find the end of that sentence, you will see instead what appears to be a misallocated footnote numbered 11 and then section 46.

This is a miserable, shoddy excuse for an impact assessment for what seems to me from reading it to be a miserable, shoddy excuse for a policy.  The consultation closes today.  There was an article about it in last week’s Taxation, so I expect at least some tax practitioners will have been alerted to what is proposed.  But, honestly, how would it serve justice if someone wanting to challenge the imposition of a fixed penalty of £100 for a late return were to be required to pay £50 for the privilege of challenging the state’s view of the case?  Follow this link to the electronic form…. Oh.  Actually the bloody thing closed at noon today.  No, it doesn’t tell you that on the consultation website.  But it does on the gov.uk landing page.

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Three more things

September 9, 2015

Three more thoughts, at a little more leisure, after Sunday night’s call to arms on the government’s consultation on the gender wage gap (see previous entry).

Firstly, how is it that gov.uk still doesn’t produce the list of open consultations in a usable format?  Seriously, look at the list here which shows you all consultations which are currently open.  At the time of writing there are 119 and, if you scroll down the list, you’ll see that they are in fact in date order.  But they are in order of the date on which they were published.  To find out when any of the consultations close, you have to click on the link to the specific consultation, open up the new page, and look for the closure date.  In the great scheme of things that might not seem like much, but it means that you can’t extract a list of open consultations, order them by date of closure, and then concentrate your efforts on the ones which are closing soon to make sure you don’t miss something.  You’d almost think they didn’t want consultations responses from individual citizens…

Secondly, on the format of the consultation, what on earth was the thing with the electronic form all about?  Why do you have to provide an email address, a snail mail address AND a contact phone number in order to respond?  Any one of three ought to be sufficient, surely?  And, while I can see it might be administratively convenient to have responses on an eform so that you can easily aggregate the responses, I can’t say that I came away from it with any sense of having contributed to a serious debate on the issues.

Third and finally, what were the issues?  In retrospect, this was a consultation on whether and how the commitment to require employers of more than 250 staff to publish their gender pay gap details was to be fulfilled.  The gender pay gap in this context is the difference between the average hourly pay of male and female employees.  So you can see that a firm with a largely female workforce in something like a caring profession, perhaps with a largely male boardroom and management cadre, might have a substantial pay gap explained by the makeup of the workforce.  You can also see how companies might be temped to game the figures by adding a few highly paid female board members to their roster, and I should mention here that I’m open to non-exec positions…  Ahem.

However the condoc tells us that the National Statistics Office uses the median hourly rate (excluding overtime and bonuses) to calculate the gap.

Why exclude overtime and bonuses?  There have been a number of high profile court cases about female high flyers in the feral professions nevertheless being denied the seven figure bonuses paid to comparable males.  Let’s add that in, surely?  And excluding overtime surely again offers chances to game the system by paying men for overtime not available to women?

The main point, though, is whether it’s more useful to have the pay gap measured by use of the average or the median rate.  Say you had 100 female employees earning £10 an hour and ten male managers on the kind of salary that averages out as £60 an hour, with three male and one female board members on an hourly equivalent of £200.  The average hourly rate for women would be ((100 x 10) + 200) / 101 = 11.88.  Most women earn £10 an hour, but the one very highly paid woman raises the average slightly.  The men average ((10×60)+(2×200))/12 = £83.  In this very crude example there are fewer men in higher paid positions and a lot of women in lower paid occupations – the wage gap is 83-11.88 = £71.12

If you use the median hourly rate, you find the one in the middle.  You rank the women in order of hourly salary and pick the middle one:

200

10

10

10…

(I’m not going to list that 100 times but you get the idea.  The middle woman, the 51st on the list, still gets £10 an hour, so that’s the median hourly rate.)

The men:

200

200

60

60

60… etc etc

Again, the middle number (the seventh man) gets £60.  The wage gap is £60-10=£50.

These two figures tell you different things.  (As well as the median and the mean, you might also want the mode, the most frequently occurring number, but in this artificial example it gives the same figure as the median)

You could, for example, envisage tweaking the figures.  If the company took on some men in its general workforce and appointed some female managers it could fairly easily arrive at a median wage gap of zero.  Appoint another female board member and you might wind up with an average wage gap of zero.  And perhaps those are the kinds of actions we might want to encourage businesses to take; I don’t know.

My point is, though, that this is what the consultation ought to have been about.  What IS the real gap between men’s and women’s pay, how best can we capture and promulgate it, in order to nudge companies to do something about it?

What a missed opportunity.

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Luck of the draw

September 6, 2015

I’m writing this rapidly, at around half nine on the evening of 6th September, because – while idly flicking through twitter – I saw a tweet from @Govt_Women (“the official feed for the UK Government Equalities Office”) reminding people there’s a consultation on the Gender Pay Gap closing in three hours.

Actually according to the consultation document here, it closes at 11.45pm tonight, so you’ve still got a couple of hours, just.

Here’s my brief summary of the condoc:

  • the gender pay gap is the gap between *average* salaries for men and *average* salaries for women
  • pay discrimination doesn’t wholly explain it (because “pay discrimination… is already unlawful” – bless!)
  • causes can include women being concentrated in lower paid occupations, women not being promoted to senior positions, and women losing seniority if they take time off for childcare

The consultation, however, is purely on how the tories achieve their manifesto commitment of requiring employers of more than 250 people to publish the figure.  It’s already in the 2010 Equality Act, but it’s a “power to introduce regulations” power.  The consultation is on what the regulations should contain.

Responses are requested on an eform which you can find here, and it’ll only take you a few minutes.  Let’s try to get a few hundred “just get ON WITH IT”s in the last hour???