Archive for the ‘Equality’ Category


Pensions: WASPI women, check your tax account

March 11, 2017

Look, I’m one of the women who lost out when “pension age equalisation” turned out to mean levelling women’s retirement age upwards instead of men’s downwards, so I’m a bit sensitive about pensions, right?  And I’m a tax maven, so when the personal tax account was introduced I signed up (at here) and found I could also check my NI record.  So, out of curiosity, I did, although I was pretty sure that, after working more than 40 years, I had enough years’ NI contributions to qualify for the full flat rate state pension that will be in place by the time I collect mine.

This was widely reported to be a flat rate of £155 a week and I confidently expected that to appear on my personal tax account.

It doesn’t.

It’s explained, fairly clearly, here, or at more length here, that it’s not just the number of years you’ve been paying NI contributions that count but also whether or not you’ve been contracted out.  Put simply, I was “contracted out” for much of my career so my starting amount is less than the flat rate.  If I want to get the full rate when I retire I have to pay contributions for a few more years.  And, no, that’s not unfair – I’m already benefiting from those contracted out contributions as part of my occupational pension.  But it IS surprising.  Most of us get our news from the media, and I had heard “flat rate”, “35 years” and assumed I was OK.

So now occasionally I tweet that people in my position would be well advised to check their own personal tax account to see how many years’ NI contributions are recorded and what their state pension is likely to be.  No more surprises!

I thought I would make this a blog post, though, because it’s a bit too much to explain in 140 characters or fewer, and I also wanted to put in the links.  But also because every time the subject comes up there are a few pensions experts who turn up and tell me either that I’m wrong, I’m stupid, or I’m whining.  This does not amuse me.  Please stop it.  If a reasonably well educated reasonably intelligent retired tax inspector can be confused by the pension rules, it’s a fair bet that there are other people in a similar position.  I’m not saying the contracted out rule is unfair, I’m just saying it’s worth knowing it exists.  So if I tweet this at you in future, please accept it in the spirit in which it’s intended: happy to help (if it’s helpful) and please stop telling me I’m a whining crybaby if it’s not.  Sheesh!  Pensions experts, eh?  Tax mavens are MUCH nicer!


Let’s talk about Impact Assessment

February 16, 2017

I have seen this Independent article circulating on social media quite a few times in the last few days: Louise Haigh MP talking about the government’s “cavalier attitude” to equalities in not conducting an equalities impact assessment before announcing the closure of some 78 Jobcentres. The DWP helpfully agrees it “will be conducting a full impact assessment as part of our planning”.

Let’s unpack this a little.

First of all, what do we mean by an “impact assessment”?  The kind that I know most about is the Regulatory Impact Assessment.  This is an examination of the costs and benefits of bringing in a new regulation.  For tax, this is now conducted as part of producing the TIIN, tax information and impact note, which contains the table of impacts produced as part of the TIA (tax impact assessment).  See the instructions on how to prepare a TIIN and the TIA which forms part of it, published on this blog here and here.

However because there was a helpful modernisation back in the noughties, when the word “regulatory” was dropped so the process became known as “Impact Assessment” (IA), there is now some confusion about the different forms of assessment that are required for different types of impact.

Mostly, assessing different specific impacts is folded into the process of producing a (regulatory) impact assessment, under the “other impacts” section.  This is also true for a TIIN: the list of “other” impacts contained in the latest TIA instructions includes two different tests each, unblushingly, called PIA: the Privacy Impact Assessment and the People Impact Assessment.

Equality Impact Assessment is different.  There is actual statute involved, whereas the IA, RIA, TIIN etc are basically justiciable via the concept of “legitimate expectation” (there’s clear, public, commitment to undergoing the process so theoretically you could bring a judicial review to try to overturn a decision which was made without undergoing that process).

There are two big caveats, though: equality legislation requires equality to be considered (given due regard) when reaching a decision but this doesn’t require the publication of a formal equality impact assessment document.  And government is allowed to consider, yes, this will screw this particular group of people over, but – balancing the conflicting priorities of government – we’ve decided the overall policy objective is more important than the impact on [X] group of people so we’re just going to do it anyway.

So, dammit, DWP can probably get away with thinking about whether unemployed people with no money and multiple issues like disabilities can make it across towns without buses or bus fares to log onto the computers they don’t have to apply for the jobs that don’t exist and deciding, well, yes, but they have *all day* to walk miles and we’ll save money.  And do it any way.

What the legislation does require, however, is that they decide to screw their customers before they make the decision to close down the services they need, and not just assess how badly they’ve screwed them over after they’ve done it.


Equality again

January 16, 2017

Well this is interesting. Cat Smith, Shadow Minister for Women and Equalities,  asked in a written parliamentary question on 13th January

when the Government plans to publish the equality impact analysis of the Autumn Statement 2016 to comply with the Public Sector Equality Duty.

David Gauke’s reply said amongst other things that

 There is no statutory requirement to prepare this information in a particular form or to publish Equality Impact Assessments.

Now, there is no requirement to assess and publish the impact of the Budget or the Autumn Statement as a whole, a giant loophole in equality legislation that was opened up or at least exposed by the Fawcett case (when the Fawcett society brought a judicial review of the 2010 “emergency” Budget).  Nor is there a requirement to prepare a separate document called an Equality Impact Assessment.

However the outcome of the Fawcett case was – I always understood – an undertaking from the Treasury that they and HMRC would assess the impact of individual measures in a better, more systematic way.  And – I always understood – this was reflected in the design of the TIIN, which includes a specific field for the result of the work done on assessing the impact on equalities.  If you refer back to May 2012 where I published the TIIN instructions you will see they included this passage:

Equalities Impacts

This test concerns people with protected characteristics. All policies must be signed off as compliant with this statutory test. At each stage of policy development you must comment on what work you have done to see whether you have given due regard to any impact on people with these characteristics and say so explicitly if you think it has none. You must keep an audit trail of your consideration, and retain this written record in the policy area so that the Department can show it is fully compliant with the law, now and in the future.

The policy is likely to impact on Equality and therefore required to complete a separate equality assessment if you answer yes to any of the following five questions:

Will the policy or its implementation have a particular impact onindividuals with one or more of the equality groups below?

Are particular communities or groups likely to have different needs,experiences and/or attitudes in relation to the policy or itsimplementation?

Are there any aspects of the policy or the way that it is implemented that could contribute to inequality?

Could this policy or its implementation have a positive impact on equality groups?

Could the aims of the policy be in conflict with equal opportunity,elimination of discrimination, promotion of good relations?

There are 10 protected characteristics that you need to consider:

Racial Group, Gender, Transsexual/ Transgender, Disability, Carers, Age, Sexual Orientation, Religion or Belief, Marital Status/ Civil Partnership, Political Opinion (NI only).

It is important that you look at the Departmental guidance and liaise with [Personal data redacted under Section 40 of the FOI Act 2000] in ICD when considering Equalities impacts as they now ‘own’ this part of the process.

And this is what it says in the current TIIN instructions, which I published last week:

Equalities impacts

This box needs to show we have had “due regard” for equality to comply with section 149 Equality Act 2010 (and similar Northern Ireland legislation). So it is not enough to say that the measure does not discriminate. A mistake that is often made is to say that there is no equality impact when there is: just about any change to personal tax for example will have an equality impact, because it will tend to affect some groups differently to others. A lot of business tax changes do too.

If the measure affects people this box should be used to say what we know about who those people are (men/women, young/old etc). The Customer Equality team in Central Customer Directorate (CCD) can advise.

Has there been a substantive change?  The Minister asserts there is no statutory requirement to publish the equality impact in ‘any particular form’.  Well, no: there isn’t a statutory requirement.  But there is a reasonable expectation, surely? Equalities impact was and remains a fundamental part of the TIIN process, and a TIIN is published with all tax changes.  Amusing as it may be for politicians to play the great game of answering parliamentary questions with as little information as possible, might it not have been more helpful to have said that?


Google’s “Minor Tax Deal”

January 23, 2016

For once the headline says it all: Google Strikes Minor Tax Deal with UK Authorities.  Essentially it seems that Google has announced they’ve reached a settlement with HMRC (the timing is interesting: who decided to put it into the news cycle today?) They appear to have closed a six year enquiry covering ten years of activity by agreeing to pay an extra £130 million.

So roughly £13m a year?  (Are there any amounts in there for interest and penalties, I wonder?)

The point is, the amount is trivial in comparison with Google’s sales in the UK.  It’s one of the issues Margaret Hodge’s PAC did a lot of work on: remember this?

To avoid UK corporation tax, Google relies on the deeply unconvincing argument that its sales to UK clients take place in Ireland, despite clear evidence that the vast majority of sales activity takes place in the UK.

There are two changes that, in my view, need to be made.  First of all, if what the PAC found was in fact the case, then there was actual evasion rather than avoidance involved.  If there was “clear evidence” of evasion then we should have been looking at “perp walks” and prosecutions, not at a financial settlement.  Presumably there wasn’t, or there would have been, right?  I mean, right??  I assume Google weren’t guilty of evasion but HMRC need to be careful of the perception that evaders can get away with it if they’re big enough.  A way out of that perception would be for HMRC to be more ambitious about prosecutions: where are the large cases that involve direct tax, rather than the “quick wins” from smuggled fags?

Secondly, there are the usual calls for tax to be “simplified” so that people pay their “fair share”.  Quite.  Except this usually also falls into the mire of the citizen stakeholder asking for simplicity and fairness, and the tax professional saying it’s not so simple, and what is fairness anyway.

I have a suggestion how to get around that.  Episode two of the The Town that Took On The Tax Authorities.  Give me a budget, a camera crew and a bunch of engaged small traders like the people of Crickhowell.  And let’s see what happens…


Crickhowell: the town that went offshore

January 22, 2016

“Either we all pay tax, or none of us do!”

There are just three things I want to say about The Town That Took on the Taxman, the show originally trailed as the “Town that Went Offshore“.  I missed it when it was on BBC2 (9pm on Wednesday 20th) but caught up with it on iplayer.  If you haven’t seen it yet, I recommend doing the same.

First of all, I enjoyed it enormously.  We have seen the same material before: the production team fancies a quick weekend somewhere sunny so they pick their tax havens carefully.  Oh look, there are supposed to be thousands of companies in that little house with all the brass plates on the door… Yes, but this time the explanation of the Dutch Sandwich avoidance scheme was done by ordinary small traders from the Welsh town of Crickhowell.

Which is, really, my second point.  Arise, tax muggles!  The USP for this programme was that the avoidance scheme was devised and operated by a group of ordinary people, not tax specialists.  Crickhowell is, apparently, a small town with a unique high street ecology made up of local small traders, not multinational chains (except for Boots, who at least they managed to shame into joining in with the Christmas lights).  But by the end of the show they were also tax campaigners.

The production team set them up with meetings with tax professionals who explained how multinationals reduce their corporation tax bills with items like payments for intellectual property.  But it seems to have been the small traders themselves who came up with the idea of creating intellectual property in the form of the Fair Tax Town brand and then parking it in the Isle of Mann company they’d opened.

In other words, tax really doesn’t have to be taxing: ordinary people are perfectly able to understand tax schemes and issues when they are motivated to understand them and have someone able to communicate with them clearly.  HMRC’s stakeholder model involves talking to “stakeholder” groups: usually to tax professionals in accountancy and law firms and those employed by industry groups.  What they need to do, in my view, is talk to small traders like the Crickhowell independents, too.  One of the main grievances the group raised with Jim Harra was, indeed, the HMRC “relationship managers” large businesses have and why aren’t small traders treated to the same level of customer service.  Money, is the simple answer.  But it’s also an excuse: HMRC’s customer service offering needs a really good re-think in my view.  Good on the Crickhowell team if they can disrupt the system enough to get that done.  (And, bring back the Small Firms Impact Test!)

Finally, the elephant in the room.  You didn’t notice?  Well, there was an engaging team of Crickhowellians throughout the programme, men and women, so I suppose you could be forgiven.  But the presenter’s constant reference to “the taxman” grated, and made me notice. That they spoke to tax barrister David Quentininvestigative journalist Tom Bergin, author of The Great Tax Robbery Richard BrooksJim Harra, an actual taxmansceptical voice Richard Murphy , tax barrister Jolson Maugham

You see the common thread? #wherearethewomen?  It’s not as if Women in Tax are hard to find!


More equal than others

December 8, 2015

How not to do equality impact assessment.

  1. Throw together a ragbag of things which might conceivably have a positive impact on women or people with disabilities
  2. Relentlessly ignore anything else, particularly anything which might have a negative effect on women in comparison with men.
  3. Do not, whatever you do, think about things in a joined-up way so that you look at the cumulative impact of a number of smaller changes.
  4. Publish, smugly.

Yes, HM Treasury, I’m looking at you.

Here, by way of a little light relief, is the women’s budget group’s analysis of the Autumn Statement and Spending Review.  I’m not sure what else to say, except Grrrr!  Argh!!


Equal pay day

November 9, 2015

Today, Monday 9th November, is “equal pay day”.  The argument is that effectively women are now working for nothing for the remainder of the year, as women’s salaries are on average 14.2% lower than men’s.

You can read more about this in The Independent, and there is a handy guide to negotiating your pay rise in The Guardian and on taking the legal route in The Telegraph.  And don’t forget I’ve banged on about it before here and here and here.

But WHY, forty five years after the passage of the first Equal Pay Act, have we not achieved equal pay?  Well, in public services things are getting worse, largely because of the 1% cap on public sector pay rises and the obsession with wiping out increments – which would be fine, if it weren’t for the awkward fact that it means everyone is stuck on the point on the pay scale they were at when the music stopped, so people are doing identical jobs for widely different salaries (because they no longer progress over time to “the rate for the job”)

No, I don’t have a wrap-it-up positive ending for you.  But sometimes there are men who stand up and say “it’s not fair” and thank goodness for them.  If you’re a man, try being that guy.  If you’re a woman – take the rest of the day off.


Tax havens

October 16, 2015

I read this article in the Observer last week and immediately thought “yes!  This!” and tweeted the link:

Essentially, if I understand him correctly, Zucman argues that we should measure the profits of international companies in the same way that the US measures the profits of American companies trading in more than one of its states, by allocating profits in proportion to the customers of each state rather than by the location of the seller.

But, just as I thought “yes!  This!” to Piketty when I started reading Capital this summer, I nevertheless don’t think Piketty’s taxes on wealth are any more likely than Zucman’s taxes on companies, because neither of them addresses how tax law is made.

It may, indeed, be obvious to you and I that taxing the rich on what we used to call their unearned income (and isn’t THAT a term we ought to bring back into use?) and taxing companies on the proportion of their profits commensurate with the customer base that is located in the country doing the taxing, rather than in the tax haven where they have planted their brass plate, are reasonable and equitable.  But, frankly, you and I don’t make tax law.

As you may remember, I have been groping towards this question in this blog for some time, characterising a difference between tax wizards and tax muggles.  I’m now groping towards putting some academic language around this thinking, of which more, I hope, later.

But let’s look at a practical example.

The other recurring theme here is the VATMOSS VATMESS.  You’d almost think, wouldn’t you, that I agreed with the principle that VAT ought to be charged according to the location of the customer and not the seller, because is that not the very essence of the scheme Zucman proposes for international company taxation?

Well, yes: in the same way as the old joke about the country deciding to switch from driving on the left to driving on the right, and deciding to phase it in by making the switch only applicable to lorry drivers.

In other words, we have a principle that might be a better way of organising international taxation being applied piecemeal to a tiny corner of international trade.  A tiny corner least able to understand, apply and implement the change; and a tiny corner least able to contribute to the making of the regulations which burden it, because it consists of stakeholders not given an equitable voice in the stakeholder community.

I’m thinking aloud here, or, at least, groping towards an argument.  Feel free to join in, cheerlead or otherwise contribute in the comments.


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 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 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 landing page.


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 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:





(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:





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.