Archive for the ‘Consultation’ Category

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Intrastat

February 27, 2014

You’re going to have to bear with me.  I’m going to talk about Intrastat, and about Administrative Burden, and unless you’re a statistician by trade or inclination, they’re about the most snooze-worthy topics imaginable.  Try and stay awake at the back  –  I’ll smuggle in a joke or a quiz somewhere- (or consider printing this entry out and reading it in bed and you’re almost guarantzzzzzzzz…)

I’m awake.  Honest!

OK then, look at this page of incredibly boring trade statistics.  Or don’t, but DO read this explanation:

These statistics record the movement – for trade purposes – of goods between the UK and both EU and non-EU countries.

They are collected from the EU-wide Intrastat survey and from Customs import and export entries, both administered by HMRC.

Now, I read this as meaning we’ve got trade statistics collected by two different methods; within the EU via Instrastat, and outside the EU from “Customs import and export entries”.  So my first thought is, are we comparing like with like?  I’m guessing that there are good reasons why not, because the EU is supposed to be a free trading zone and there are different customs duties applied to goods from outside the EU.

Intrastat is statistics (the “stats” part) from trading inside, “intra”, the EU.  With me so far?  But there’s no need, theoretically, for people to tell the authorities what they’re exporting and importing within the EU, so the Intrastat process seems to be finely balanced between forcing people to provide data that gives them no individual benefit, and obtaining data which does have some kind of collective benefit.  The benefit or otherwise of having trade statistics at all is left as an exercise for the class.  Write on one side of the paper only, and, please, refrain from showing your workings.

Now the UK is pretty groovy in the field of administrative burden; we have a high threshold for VAT registration (is it still the highest in Europe?  Anyone?  Bueller?) We used to have a serious programme of reduction in administrative burden …

All right, it’s probably time to talk about administrative burden now.  Get an expresso, I’ll wait.

“Administrative burden” is a way of conceptualising the cost of regulatory action.  Think about it this way.  If the government makes you spend one afternoon a year filling in your tax return, you lose an afternoon out of your life.  You could have been reading a book, watching bad telly, taking your kids to the park…  But there isn’t – theoretically – a monetary value to stick on that.  But if a business has to spend an afternoon filling in forms, there conceptually is a hard monetary cost to that.  The three hours your hairdresser spends filling in her tax return is three hours that she isn’t cutting hair, so she’s theoretically lost 3 x her hourly profit.  That’s the measure of the “administrative burden” of regulation.

(Sidebar for the excessively caffeinated; in 2010 the government decided  your time in the “reading a book, watching bad telly…” example does have, if not a cost, at least a value.  It’s £14.20 an hour.  So there.)

So.  There’s an “administrative burden” – a cost to business of the time they spend filling in and sending off the forms – to “intrastat” – the statistical information about movement of goods inside the EU.

Now interestingly enough the last government had a five year mission… I mean, it set up a five year programme to reduce the administrative burden on business by 10%.  Although, rather heartbreakingly for those of us who might have agonised over some of the work on it, by the time they’d gloriously achieved the target there was a new government who didn’t give a hoot about what the previous government had done but certainly wasn’t going to let anyone crow about them having reduced the regulatory burden when the new narrative was all about the red tape challenge.  So the results were in an unpublicised Budget paper called “Delivering a new relationship with business” and oooh look at paragraph 2.5 on, would you believe it, Intrastat:

2.5 On 1 January 2010 the exemption threshold for completing Intrastat forms for arrivals was reduced from 97 per cent to 95 per cent. All VAT registered businesses who reach the threshold for their value of arrivals or dispatches (goods arriving from or going to other Member States) are required to submit Intrastat declarations on a monthly basis. The threshold reduction means that around 6900 businesses will no longer have to complete the arrivals declaration and will benefit from a share of the estimated £1.8 million admin burden savings.

Now my calculator says that £1.8m divided by 6900 is £260.  So it cost £260-ish to fill in an Intrastat survey each year back in 2009?  It says it in the impact assessment, so it must be true.

Well if we look at the consultation into a further “simplification” of intrastat (closing date for comments 8th April) there are a couple of draft TIINs for the options under consideration.  Tick v.g. to the policy team for correct use of TIIN to cost out the options under consideration, by the way – the idea of doing an impact assessment is to look at the costs and benefits of options and decide on the best policy action according to the balance of costs and benefits.

So we are currently looking at options.

One of them, is the EU proposal to collect data only from exporters.  You can see the benefits: if you only ask one side of the transaction to report, you can halve the amount of data collected.  So I sell a million widgets to France and there’s only one form to fill in, the one saying I sold them, and not two – one by me and one by them – but provided the data is shared across europe the total information collected is still the same.

However we don’t seem to like that idea.  I’m not sure why, but the condoc drips condescension towards it:

“Theoretically, there are superficial benefits to be achieved by doing this…”

and

“It also appears to make the existing asymmetries between Member States data disappear overnight.” (and no, not my emphasis!)

Let’s have a look at the options and what they’d cost.

Option One – SIMSTAT proposal – removal of the requirement to submit arrivals declarations (with additional data requirements at dispatch)

In other words the EU proposal, to make the data collection one sided, from the sender only.  So you’d only collect information from exporters (and not from both importers and exporters) but you’d made the exporters give a bit more detail.

If you look at page 12 of the consultation document you’ll see the impact assessment suggests HMRC would have to spend £1.1m on computer equipment and the administrative burden on businesses would go UP by £0.6m.

(Irrelevant joke insert: What do you call a man with a plank on his head?  Edward.  I told you I’d smuggle in a joke if you stayed awake till the end.)

Then there’s option two, which seems to be the worst of all possible worlds: increase the data requirements on exporters and (slightly) reduce the numbers required to give information on imports, or, as the condoc has it

Option Two – SIMSTAT proposal (with additional data requirements at dispatch) – reducing coverage for arrivals to 90% to meet national requirements

This one still costs HMRC £1.1m AND increases the admin burden by £2.3m.  So let’s not do that, eh?

(oh, and Irrelevant Joke data: you have to pronounce it ‘ead wood)

Then there’s the Third Way.

Option Three – Alternative simplification proposal: 93% coverage for arrivals and dispatches (used for illustrative and comparative purposes)

This one apparently doesn’t cost HMRC anything AND it reduces the admin burden by £3.6m a year.  Oh, and it takes 8500 of the smallest businesses out of having to produce stats at all which, my calculator suggests, will save them £423 each and that seems quite a lot more than the £260 it was costing businesses in 2009 but there you go.

Now impact assessment theology would suggest it’s a no-brainer that you simply do that one; achieves the same objective and costs less.

So why are we having a public consultation on it?

The consultation is directed at people who either have to produce intrastat declarations, or make use of the resulting trade statistics.  But it’s the “how did we get here” bit of the consultation that interests me:

The EU Commission have put forward a proposal to modernise the Intrastat system which is targeted for implementation from 2017.

To offer a more immediate simplification, during 2013 HMRC informally consulted with businesses required to submit Intrastat declarations and users of Intrastat data on a proposal to reduce the coverage of trade on which data must be collected by the Intrastat system for arrivals from 95% to 93%. The UK, along with other Member States, worked with the EU Commission to deliver this change and as a consequence the EU legislation has been amended resulting in an increase to the Intrastat Exemption Threshold for arrivals from £600,000 to £1,200,000 from 1 January 2014.

So are we saying that we’ve already achieved option 3 and we don’t want any further change?  And that further change will add to HMRC and to businesses’ costs?  And we’re trying to persuade our fellow states that we don’t need to make any further change?

Well then, I go back to, why the consultation?

Are we – I wonder – hoping that affected international businesses will kick up a fuss in other european states and get them to back the UK proposal/status quo?  Or are we genuinely looking to confirm or refine our costing data, since there seems to be some question over the cost of the increased data requirements on the exporters if we went to the asymmetric method.

Speaking as a PhD student, wouldn’t it be cheaper, or at least more efficient, to spend some money on getting some research done?  Stick a few grand in the pot, get the other member states to do the same, and get someone to lead a research project and send a bunch of eager young PhDs and post-docs out to get some actual data from some actual businesses and write it up in a comprehensible way?  (And dear god no, I’m not pitching for the work!)

In other words, while Oliver Letwin might not think that consultation is the place to gather “views”, I’m not entirely certain it’s the right place to gather “data” either.  And maybe this is an instance where data would be more valuable than views.

(Irrelevant joke insert: What do you call a man with three planks on his head?  Edward Woodward.)

Thank you for staying awake.  As you were.

Posted in Bit of politics, Consultation, HMRC, Regulation | Tagged | Leave a Comment »

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Call for evidence

January 22, 2014

I should have mentioned earlier that the House of Lords Economic Affairs Committee has set up a sub committee which is looking at the 2014 Finance Bill.  They are looking in particular at two things: the taxation of partnerships and at the progress of the changes to tax policy making set out in Tax Policy Making: A New Approach.  The call for evidence closes tomorrow, 23 January, so you have JUST got time.  (Why do you think I’m blogging about it so late in the day???)

I’m rather conflicted about the partnerships thing: I have Strong Opinions on the subject, but not direct experience of being a member of a partnership.  I acted as deputy for one of the participants in the Office of Tax Simplification’s consultative committee at one meeting, but of course I was speaking to a brief.  So I think I’ll give that part of the call for evidence a miss: my opinions aren’t the same as evidence.  Damn you, academic rigour!

Posted in Call for evidence, Consultation | Leave a Comment »

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Update

January 17, 2014

By the power of twitter,

turns out that the Budget Representations page is now open.  Thinking caps on!

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Simple question

January 16, 2014

It’s now 62 days  (44 working days) till the 2014 Budget on 19 March.  Which isn’t long really.  So when is the Budget suggestions portal going to open?  My suggestion last year didn’t make it through the portal so didn’t get even the cursory examination that suggestions from mere individuals are given.   I’m keen to make sure my idea gets through the portal and onto someone’s desk this year.

So.  When is it?  Anyone?  Does anyone even know where it’s going to turn up on the gov.uk site?  I’d imagine it will be an update to this page – but then I imagined that the consultation on the Finance Bill would be on the consultations page, so what do I know?

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Three. Probably.

January 15, 2014

A search on “open consultations” in the category “HMRC” on gov.uk today tells me there are three open consultations.  I’m not sure I believe them after the shenanigans I reported on in my 7th January post (customer service tip: if someone tells you a site isn’t working, the least helpful response is “I don’t currently see any technical problems…”) but let’s roll with it.

The three are:

Real time information: legislative changes.  Opened 29th November (so why didn’t it show up when I searched on the same terms on 7th January?) and it closes on 24 January.  Incidentally, wouldn’t it be really, really helpful if you could search on closing date on gov.uk?  Or at least that you could tell from the search results when the consultation closes and didn’t have to click through to find out?

Onshore employment intermediaries: false self-employment.  Opened 10 December, closes 4 February.

Assistance with electronic filing of VAT returns.  Opened 20 December, closes 14 February.

So let’s start with the Real Time Information (RTI) one.  RTI, in case you didn’t already know, is the PAYE equivalent of Universal Credit – it’s the New! Improved!  All-singing!  All-dancing! method of making sure that Universal Credit will work because the government will know, from timely information from employers, who has worked where and when, so people will – perhaps, if it all works, fingers crossed – finally be able to dip in and out of paid work without screwing up their benefits for six months.

But from an employer’s viewpoint, it’s a royal pain.  You have to report payments to employees when you make them, not at the end of the month or quarter or year or whenever you can stop to draw breath.

There’s little point looking at the actual consultation, because this is one of the Finance Bill consultations – in other words, the policy has already been decided and we’re not being asked for our opinions on whether it’s a good idea or not, just for technical comments on whether or not the regulations that have been written will actually work as described.  And I don’t really feel like doing the government’s unpaid copy-editing for them this morning so we’ll skip that.

There are a few interesting things we might want to think about, though.

First of all, the TIIN (surprise!)  They aren’t publishing a TIIN with this because they’ve already published one.  In fact they’ve published two, one for the penalty regime here and one for the actual policy change.

The one for the penalty regime says that there will be no actual exchequer impact.  In fact the government says it doesn’t expect to get any money in from these penalties at all, or at least an amount which shows up as “nil” on a TIIN.  If memory serves, that’s something like a quarter of a million threshold (grateful if anyone can confirm or amend this figure please?)

That’s a good thing, of course.  The point of penalties is to change behaviour, not to collect money.  The idea is that people should make the change to RTI and get used to sending the same information they would always have sent, just a bit earlier and in a different way.  I can see two problems with that.

First of all the level of the penalty.  It needs to be a “smacked wrist” amount – enough that you know not to put your hand into the fire but not so great that your parents get done for child abuse.  So if you’re a small business with up to nine employees, it’s a hundred quid.  Enough to make you want not to incur it, but not enough (one hopes!) to bankrupt you.

But look at paragraph 16 of the condoc:

16. Regulation 67I sets the size of the late filing penalties as follows:

 £100 for schemes with 1 – 9 employees;

 £200 for schemes with 10 – 49 employees;

 £300 for schemes with 50 – 249 employees; and

 £400 for schemes with 250 or more employees.

If I have 300 employees on the average wage of £26,500 then I’m paying out over half a million in wages every month (£26,500 x 300 / 12 = 662,500).  Now, in comparison to £662,500, is £400 a “smacked wrist” or is it, well, peanuts?  An amount which it might very well be worthwhile my incurring so I can sort out my RTI submission at my own pace?

In other words, I think they got the gearing of the penalties a bit wonky.  But it’s too late now, we’re not being asked to comment on that.

Secondly, as I have commented before, there’s not a great deal of point charging “smacked wrist” penalties if you don’t actually go out and collect them, and is HMRC now committed to sending someone round to knock on the employer’s door if they incur a £100 or £400 penalty and explain to them how it arose and, more to the point, what they can do to avoid incurring another?  Otherwise I think that “exchequer effect – nil” may turn out to be, shall we say, optimistic?  Or should that be pessimistic?

And finally, what about the equalities impact?  I said in my response to the consultation on the actual policy that I was worried about the impact on “care and support” employers, which is HMRC jargon for people who have employees but who aren’t businesses.  People who employ nannies, for example, or, more worryingly, people who are given a “care budget” instead of a home help and have to get on and organise their own support package including paying their carers and working out the tax due on their pay.

In the TIIN for the actual policy it says under equalities impacts that

Care and support employers will also have the option to file RTI on paper, and those wishing to use this option will report RTI from April 2014. This date has been deferred from April 2013 in line with customer feedback, to allow more time for HMRC to thoroughly test the new paper forms and guidance with customers who will use them.

So.  We’re not publishing another TIIN.  We’re not updating the equalities impact, then?  Has there actually BEEN any testing of the impact on care and support employers?  Are they happy, or at least confident they’ll be able to comply?  Does anyone know?

Sigh.  I’d write to my MP again, but it’s Nick Clegg and I think he’s probably getting sick of hearing from me about inadequate government equality impact assessments by now.  Over to you.

Posted in Consultation, Employment, HMRC, Regulation, RTI, TIINs | Tagged , , | 2 Comments »

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Due Consideration

January 10, 2014

I have to admit, I didn’t get far looking at the “consultation” on the 2014 Finance Bill.  Being an impact assessment specialist I started with those, at page A1 (actually page 22 – of 176) of the “Overview of Legislation in Draft” document to be found here.

The first TIIN is for the government’s support-for-marriage measure, the transferable personal allowance for married couples.  A person with earnings below the tax threshold will be able to transfer £1000 of their personal allowance to a spouse or civil partner, potentially increasing the couple’s joint take home pay by about two hundred quid a year.

I got stuck at the equalities impact, which says:

Couples will benefit as a unit, but the majority (84 per cent) of individual gainers will be male.  This reflects earning patterns in the population more generally.

Now let’s just stop there for a doggone minute.  Remember when the Fawcett Society tried to bring a judicial review of the so-called “emergency” budget at the start of the coalition?  They didn’t succeed in getting the Budget overturned but they put the wind up the Treasury which was forced to concede it hadn’t done an equality impact assessment of the Budget as a whole… but it had looked at the impact of most of the measures and promised to do better in future.

So here we are looking at the equality impact of an extremely expensive change (495 million in 2015/16 and then 600, 660 and 775 million, according to the exchequer impact section of the TIIN) and the best we can come up with is that it will mostly be men who benefit, but that’s just how society works?  Seriously?

I mean, I’m not imagining it, the Public Sector Equality Duty is still in force, right? The thing that says (and I checked my memory against the Equality and Human Rights Commission guidance) that a public body like HMRC or the Treasury has to give “due consideration” to equality in developing policy?  That “due consideration” means conscious thought while the policy is being developed (and not a quick run round the equality issues when all the decisions have been taken)?  That the point of it all is to reduce, not to perpetuate, inequality?  I mean, that IS what the legislation is all about, yes, I haven’t just dreamed it?

Now it’s not perfect.  It doesn’t mean that equality has to be the overriding consideration.  The government has left itself perfectly capable of saying, in effect, “yes, I’ve thought carefully about it, but, no.”  It just has to have due consideration – is any negative impact proportionate, and are there any positive impacts that could be incorporated, and have we done everything reasonable to mitigate the negative impacts we know about?

So due consideration of the gender impact of the couples allowance might be something like, well, “it perpetuates and perhaps reinforces negative financial impacts on women by giving a financial reward to men whose partners are in particularly ill paid employment and after careful thought we have decided that our desire to encourage traditional gender stereotyped marriage arrangements outweighs the financial advantage this gives to the men affected.  We also believe they’ll share, honest.”

What isn’t – is seems to me – “due” consideration is to say, in effect, “yeah, we’re giving four times as much of the money to men;  suck it up dear.”

However since this is a consultation on how the legislation works and the TIIN is intended as a decision making tool, well, perhaps there’s time to do something about it?  Because I’m sure, she said sincerely, that the Treasury will have done some proper research into the possible gender impacts of this change and the brief line in the TIIN is just a rather infelicitous summary of some complete and careful work, right?  So how about, say, we all go here (a nifty little website that will give you your MP’s email address) and drop our MP a line asking them to bring up the equality impact when they debate the Finance Bill?  In fact, come to think of it, a Freedom of Information Act request ought to get us the underlying research in good time to inform the Finance Bill debate anyway, right?  Right?  (Goes to write FoI request.  Watch this space!)

Posted in Bit of politics, Consultation, Equality, TIINs | 1 Comment »

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Unlocked

January 8, 2014

You will see that a kind commentator has given the link to the 2014 Finance Bill consultation documents which are here: https://www.gov.uk/government/collections/finance-bill-2014#consultation-on-draft-legislation

We’ll come back to that.  For the moment, though, look at the address.  It’s on the gov.uk site, right enough.  It’s described as a consultation-on-draft-legislation.  The “collections” part is interesting.  Here.  Let’s try an experiment.  Open up another browser window, right now, and go to “gov.uk”.  You should find yourself on a page headed “welcome to gov.uk”, yes?  With a nice search box underneath it?

Now, in that search box, put “finance bill 2014”.  I just did, and it returned three results:

  • Finance Bill 2014 TIINs
  • Finance Bill 2014: documents relating to Finance Bill 2014
  • Finance Bill 2014 New Guidance

The three links given are, respectively,

And what do we notice?  No sign of the “consultation-on-draft-legislation”.

You’d almost think they didn’t want us to know…

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New Year, same problem

January 7, 2014

“But look, you found the notice didn’t you?”

“Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard’.”

Hitchhikers Guide to the Galaxy

As you will know by now, I can bore for England on the subject of tax consultations and, in particular, on the interesting way that they’re brought to our attention on the Gov.uk site.

Let’s have a first look of the new year at what tax consultations are out there, I thought.  So I went to gov.uk and hit the link that says “get involved”, which helpfully takes you straight to the consultations page.  Today, it proudly informs us that there are 93 open consultations and 578 closed ones.  So I clicked on “open consultations”… which was a link to the page with the filter options, but which told me it had 148 open consultations from which to choose.  Hmmm…  So filtering by open consultations in the “tax and revenue” subject area?  Brings up 6 consultations – all closed!  Open consultations in any subject from HMRC?  Four – all closed.  From HMT?  Another four (not the same ones), also all closed.

In other words…

Well, frankly, I don’t know.  At this point in the policy cycle I’d imagine there won’t be much around on which the government is asking our opinions.  Although strictly speaking I’d have thought the legislation for the 2014 Finance Bill ought to be out for consultation – not on the policy itself, but on whether the wording works.  Or have I missed that?  I don’t know.

I don’t know, and at this point, using the publicly available resources the government have put into the citizen’s hands, I can’t seem to find out.  Which is a bit poor, actually.  I may write to the House of Lords Secondary Legislation Scrutiny Committee again, as they seem to be the only people interested in the mechanism of legislation.  But then, they reported in November that the government “are prioritising administrative convenience over effective consultation“.  And if they can’t get anyone to listen to them, well, what hope do the rest of us have?

Posted in Consultation | Tagged | 4 Comments »

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Not a penny more.

October 20, 2013

The consultation into MPs’ pay and conditions closes today, Sunday 20th October.  If you do one thing today, please take a moment either to email your thoughts to ipsa (mppayandpension@parliamentarystandards.org.uk) or add them in the comments here.

This is what I sent them.

You are consulting on proposals to increase MPs’ salaries and pay . My response is that MPs should have not a penny more during the life of the current parliament.

In Mrs Thatcher’s day the pay of MPs was tied to that of senior Civil Servants:

“On 21 July 1987, the House agreed a resolution that set Members’ pay at “89 per cent of the rate which on 1st January in that year represents the maximum point on the main national pay scale for Grade 6 officers in the Home Civil Service” from 1 January 1988 and maintained that linkage from 1 January 1989 onwards.” (from http://www.parliament.uk/about/faqs/house-of-commons-faqs/members-faq-page2/)

The current HMRC Grade 6 London max is 74209 and 89 per cent of 74209 is of course 66046. This means that the current 66396 which MPs receive is very much the rate for the job and I cannot see any justification for increasing it.
Indeed the Coalition Government has operated under a narrative of an austerity crisis which overrides all other fiscal arguments: Francis Maude wants a Civil Service which is “fit for the future: faster, flatter, focused on outcomes not process, more accountable for delivery, more capable, more commercial, more digital, more effective in delivering projects and managing performance, more open, with modern terms and conditions, smaller and more unified.” Why shouldn’t this also apply to MPs? Let them have performance pay: if the economy improves, the welfare state runs effectively, the NHS works effectively, unemployment reduces and the happiness of the people increases, then they can have a pay rise. They have demonstrably failed to achieve any of these ends to date.

I reject your argument that MPs are “at the pinnacle of our democracy. This is a fact that we ought to record and respect.” I believe that MPs are public servants and should be rewarded and valued as much as any other public servant. In hard times, they need to understand they are subject to the same hardships as the rest of us, that we are “all in this together”. So: not a penny more.

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Stand by your spreadsheets

October 18, 2013

So whether there is one tax consultation outstanding or nine, we at least have some idea about what happens next.

A Ministerial Written Statement by David Gauke, issued yesterday (17th) tells us that the government now has consulted on “over 30” areas of policy since the Budget.  (I’d factcheck that if they published them coherently enough to tell – but I’d point you again to my spreadsheet of 23 consultations published in July.  I wouldn’t have called those 23 separate policy areas, although I suppose we could debate whether – say – “simplifying national insurance processes for the self employed” is actually a separate policy area from “national insurance and self employed entertainers”. And where are the other seven???)

Anyway, looks like the autumn statement will be around December 10th or at least that’s when all the paperwork will be published.  The statement says:

Draft clauses to be included in Finance Bill 2014 will be published on 10 December 2014, together with responses to policy consultation, explanatory notes and tax information and impact notes. The consultation on the draft legislation will be open until 4 February 2014.

So whatever’s open now, the next batch will be open for consultation (although only on whether the draft legislation actually works or not) between 10 December and 4 February.

Clear?

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