Archive for the ‘Digital’ Category


The oncoming storm

April 6, 2017

HMRC has a long record of enforcing compliance with direct taxes by hitting taxpayers with a bigger and bigger financial stick until they engage. Readers with long memories may recall the old method of estimated assessment, where a tax return was obtained by estimating income and profits and, if no return was received, estimating next years’ higher and higher and higher until finally we had little old ladies with tens of thousands of pounds of alleged income in tears on the doorsteps of accountants.

More recently there were cases of absurd penalties racking up under the C.I.S. system. And there is of course the notorious hundred pound penalty for failure to submit a tax return on time. This began as the lesser of £100 or the tax due: now it is simply £100 even if your tax bill as a result of the return is zero.

It is my contention that HMRC has very little understanding of the ecology of taxpayers with earnings at or around the nil rate band limit. This was evidenced in the last few years in the VATMOSS debacle (this blog, ad nauseam) where the tax authorities failed to engage with the very smallest digital entrepreneurs, principally because they had no idea that such businesses existed in the first place. The HMRC stakeholder model makes it hard for such people to engage because on an individual basis it takes up too much time and energy to deal with HMRC one-on-one, and none of the existing stakeholder organisations represent such businesses: the entry level for the Federation of Small Businesses, for example, at £99 for a start up or £172 thereafter, is prohibitively expensive if one is earning 10,000 a year.

So if we accept that HMRC’s pattern is to use disproportionate financial penalties on small businesses and it has little understanding of the very lowest earner, it is easy to see how the disastrous affair of the tax credits outsourcing program came to be. The PAC report published today goes into full detail but there are a couple of additional points worth noting.

Firstly the outsourcing of work which ought rightfully to be done by the civil service. It has always been thought morally dubious (and in my opinion rightly) to outsource the collection of tax to a profit making entity. How is it not incorrect, therefore, similarly to outsource the payment of small amounts to the poorest members of society?

Secondly there is the question of control of contracts and external work. As you will know, I am not sanguine about the possibility of Making Tax Digital for Business working as intended and this is largely because HMRC have over the years lost their in-house expertise in dealing with computerisation. Combine this with the rumoured walking away of their own consultants because of the changes to IR35 rules, it looks as though the problems with tax credit payments are merely a foreshadowing of a shit storm heading HMRC’s way.


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 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?



February 2, 2016

How long does it take for an issue to fall from “current affairs” into “history” or to be forgotten altogether?

I ask because I had an odd experience while completing my tax return on Sunday afternoon (well of course I left it to the last minute – I’m a retired tax inspector, after all, and you know what they say about the dentist’s children’s teeth).

Because I had checked (and written a smug blog entry about it) that I was able to log onto the HMRC system in good time this year.  But when I sat down on Sunday morning and typed “HMRC self assessment” into google I didn’t get back to the expected page with my details already saved.  Instead I found myself in at a page headed “sign in and file your self assessment tax return” which had a link to “sign into your online account“… which did NOT have my login details already filled in as I had hoped.

Now I had, of course, taken the precaution of writing down my “HMRC User ID” (and my UTR) inside the front cover of my account book.  But I had not written down my password and it seemed my computer had not helpfully retained it in its memory and it was now 11am on 31st January and ouch!  And, incidentally, if you need a new password (which was my first thought) you can only get one if you agree to have an “online Government account email address” which I have so far refused to accept.  This is because I suspect that signing into a government email address will be as much a bore and a chore as signing into one’s self assessment account, and I utterly refuse to have legal notices like notices to file and reminders to file sent to an address which it is unlikely I will remember to log into.  To me, a reminder goes to, you know, the thing you actually look at like your ACTUAL email address.

But this is beside the point, which was that time was getting on and I still hadn’t managed to log into my self assessment account and it didn’t look as if I was going to be getting a new password any time soon enough to make a difference.  Aha!  I thought, I can follow one of the other links on the “sign in and file  your self assessment” page which helpfully offers the option of signing in with “a GOV.UK Verify account”

I don’t know what that is, I thought, but it sounds like something I should have.

So I went to this page and clicked on “this is my first time using Verify” and arrived… here.

Now, if you haven’t clicked on any links so far in this blog, I suggest you click on this one, because it tells you that

A certified company will verify your identity. They’ve all met security standards set by government.

A “certified company”.  Not HMRC.  Not any arm of the government.  A “certified company”.  They are:

  • Verizon
  • Experian
  • Digidentity
  • Post Office

I failed to register with the Post Office, and then I failed to register with Experian, mainly because I had already given them a remarkable number of details from my drivers licence and my debit card and they then wanted my passport details as well which I refused to give them.

I realise that 2006 is a long time ago, but do we recall the protests against the introduction of a national identity card scheme?  I seem to recall that the one of the principal objections was that it would enable government to join up different databases and put together an enormous mass of data about our individual movements and activities.  There was a campaigning group, NO2ID, which still seems to be operational.

I was never quite sure which side of the argument I was on.  I used to be a tax inspector, after all, so I could see just how bloody useful being able to join up government databases would be.

But to me, if there’s one thing worse than having a government identity card scheme, it’s having a privatised one.  Great flying spaghetti monster, I’d rather have a democratically elected government tracking me than… an American mobile phone company, a credit reference agency, a private Dutch company or the bloody Post Office!

(After lunch I tried again.  I googled “HMRC login”, which took me straight to this page, where my HMRC User ID and the password were already helpfully in place.  Phew!  And, yes, I’ve done my tax return, on time, thanks.  Inner peace my eye!)

So.  What do we think about Verify accounts?


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.