Archive for the ‘Equality’ Category

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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???

 

 

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The Taxman

August 28, 2015

Fair warning, if you ever meet me face to face and start telling me about the Laffer Curve (the idea that taxing above a certain level stops people bothering to getting out of bed) you should know that I consider this theory to be entirely exploded by history.  This history is admirably illustrated by The Beatles’ song “The Taxman“, and I will more than likely sing a few verses of it at you until you admit defeat.

George Harrison could do as he liked, of course, but for the rest of us, times have changed, and the use of the term Taxman to refer to members of Her Majesty’s Revenue and Customs, and, by synecdoche, the institution itself is now somewhat offensive.

I say “somewhat”, because there are few absolutes in linguistic useage (I am aware that I have used the term myself when I have been unable to think of an alternative) and I say “offensive” because HMRC had a 58% female workforce (when they had 74,000 staff: I’m assuming this was a couple of years ago – anyone got more recent figures?)

“The Taxman” is a term which includes female tax inspectors?  Yes, quite: and “who for us men and for our salvation came down from heaven” never bothered me in the creed either.  It’s an archaic usage: get with it grandad and just stop it please!

Let us be practical, however.  What can we say instead of the lazy sexism of “the taxman”?

Well how about:

  • HMRC
  • the Revenue
  • Customs
  • taxfolk
  • taxpeeps
  • the taxers
  • taxbods
  • tax professionals
  • taxworkers
  • the tax office
  • tax officials
  • tax inspectors
  • HMRC officers
  • tax/customs authority

Pick an appropriate one for your context (and, no, using one inappropriate to context will not persuade me that I’m asking the impossible).  And, please feel free to add your further suggestions, serious and… more left field…. in the comments.

 

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Accessibility?

July 27, 2015

Don’t mind me; I seem to have reached the Grumpy Old Git stage of my convalescence.  This morning, for example, I thought I would read the Tax Assurance Commissioner’s new Annual Report – I know, I know, but there’s only so many episodes of Bargain Hunt and Time Team you can watch before your brain melts and dribbles out of your ears altogether.

Here it is: on gov.uk of course, on a page of “collections”, where the 2012-13, 2013-14 reports are collected along with the new one, for 2014-15.

Click on any of them, however, and you get the message that “This file may not be suitable for users of assistive technology”.  Now, wait a minute, wasn’t the government’s own website supposed to meet the government’s own standard for accessibility?  Why is the report a PDF document (which is a bugger to get to a reasonable size for comfortable reading) rather than HTML, which – as the government’s own Service Design Manual points out – is a more accessible option:

For written reports, the native format of the web (HTML) should be your default option. PDF can be an excellent display format, but without additional effort it can be inappropriate for users of screenreading software.

A pdf document should only be used where there is “no other option“:

HTML is quicker, easier and more widely usable/accessible than PDF, but where no other option is possible this PDF guidance should be followed.

I’m lucky enough not to require use of specialist software to read this document: I’m just pissed off that the text shows up on my laptop in a font too small for me to read comfortably without a lot of fiddling about, and that it took me a good ten minutes to find the control to increase the magnification.

But I wonder why there are so many HMRC and HMT documents which pop up as PDFs instead of HTLM.  Is there really “no other option”, or is there a default to seeking an easier life and not worrying about it till someone makes a fuss?

Answers on a postcard…

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Here we go again: equality impact assessment

July 17, 2015

The Summer Budget OOTLAR (Overview Of Tax Legislation And Rates) contains 124 pages, including 110 of TIINs (Tax Information and Impact Notes). They are signed off (on page 12) by David Gauke as containing “a reasonable view of the costs, benefits and impacts of the measures”

No, bear with me, it’s important.

Remember 2010, when the Fawcett Society took a judicial review against the coalition’s “Emergency” Budget? Although they were denied permission (mainly, as I understand it, on the grounds that the Budget had been debated by Parliament by the time the judicial review proceedings were launched and, as any law student knows, Parliament trumps judges).  However the Treasury were pretty much caught with their trousers down as regards conducting equality impact assessment of budget measures and promised to do better in future.

One of the “doing better” changes was to include reporting on equality explicitly in the TIINs that accompany any changes.  The equalities impact field in the TIIN is the only guarantee we have that the Minister responsible for making the decision has had the question of the public sector equality duty put before him or her at the moment of decision.

In that light… David Gauke’s view of what is a “reasonable” view of the equality impact doesn’t have a great deal in common with my own, shall we say?

Take for example page 24 of OOTLAR where there is the table of impacts for the changes to personal allowances. In the equalities impact field there are figures showing clearly that there are more lower paid women than men and more higher paid men than women. The public sector duty in the equalities act requires the government to have due regard to the need to eliminate unlawful discrimination, advance equality of opportunity and foster good relations between those who share a protected characteristic and those who don’t. The equalities impact field of the TIIN is the government’s evidence it has done so: on this evidence it has noted the facts of inequality but given no consideration to advancement of opportunity.

Or look at page 27, which has the table of impacts for the reduction in corporation tax.  It is noted that by 2020-21 the change will give away an anticipated £2,475 million.  The equalities impact shows “changes to the CT rates affect corporate entities and therefore do not have equalities impacts” in spite of the fact that this single measure gives away an enormous chunk of the tax base, for an unquantified economic benefit of making the UK “more attractive as a destination to locate business activity.” They can probably get away with this, because the judicial review proceedings held that equality could be considered on a measure by measure basis rather than looking at the Budget as a whole.  But a bit of common sense and political nous might lead us to wonder whether that was a good decision, when consideration of whether a corporate tax cut is a priority over, say, tax credits for those in working poverty is left unaddressed.

Then there are the changes to inheritance tax: “the government has no evidence to suggest that the measure will have any significant adverse equalities impacts”. (p34) This is not the public sector equality duty and does not provide evidence that the government has paid “due regard” to the right issues. Does “due regard” require consideration of what evidence the government doesn’t have, but could reasonably acquire?

The “exploding head” moment for me came when I reached page 118: yes, the idea of HMRC having power of direct recovery from bank accounts is back!  And apparently “will not impact disproportionately on people with any of the legally protected characteristics” – so the government is confident it won’t be trying to take money directly from the bank accounts of people in mental distress or illness, are they?  We have been here before when HMRC thought they would only be using the power around 17,000 times a year and I suggested, well, in that case, why not limit the power so that it can ONLY be used 17,000 times a year?   So that they would have to prioritise the serious cases and not introduce mission creep.  And it would be used to recover debts from individuals, businesses and partnerships, so I suggested a three year trial of the power applying it only to non-natural persons, ie to companies and LLPs and the like, before they let it loose on the rest of us.  I observe that the current proposals are suggested to affect

 11,000 individuals (including self- employed taxpayers) and businesses a year.

And yet (look at the last field of the table of impacts) the power won’t affect small businesses?  I believe someone’s trousers are on fire.

 

 

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Sometimes, good news is bad news.

January 6, 2015

I was watching the Autumn statement in the gender studies institute of the LSE alongside other members of the Women’s Budget Group when George Osborne said  “And what’s happening to the gender pay gap? It’s just fallen to its lowest level in the entire history of this country.” I’ve never actually heard the sound of so many collective jaws dropping before.

What actually seems to have happened is that the gap went up a bit the year before, and then back down a bit last year.  But only if you take the government’s preferred measure, of the difference between men’s and women’s full time median earnings.  If you actually take into account the actual wages of actual people – you find that women tend to work part time more often than men because, biology (and sociology).  And the government’s “gender pay gap” doesn’t include them ohoh.

And then again as the Joseph Rowntree foundation noted:

So effectively what we were looking at was a bullshit statistic covering downwards convergence.  Trust me, the kind of feminism represented in the WBG isn’t about wanting to close the pay gap by making men poorer but by women richer.  Or as one tweeter pithily put it:

Anyway, the Women’s Budget Group report on the Autumn Statement is out now and can be read here.

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Twitterstorm: a Modest Proposal

November 27, 2014

Twitter has its uses.  How else could a number of angry individuals get the attention of HMRC and bring their concerns to the table?  The “stakeholder engagement” concept that HMRC uses to decide who to talk to breaks down when the affected taxpayers are micro businesses who typically don’t belong to any of the representative bodies who have a seat at the stakeholder table.  All power, then, to the knitters, musicians, authors and others who have created a twitterstorm over the VATMOSS/VATMESS changes I described in my last post.

HMRC have responded by using their new @HMRCcustomer twitter presence to offer a “twitter clinic” on the changes, today (Thursday 27th November 2014) …. between 3.30 and 5pm.  This is another enormous brick they’ve dropped, as many of the affected businesses are part-time one-woman businesses fitted in around domestic responsibilities or full time jobs, so that during the school run is the worst of all possible times to offer to talk.  Sigh.

I have been thinking a bit about the proposed changes over the last few days and I have a Modest Proposal for a solution.  First of all, HMRC need to be absolutely explicit that, where someone sells via a platform (Amazon, Etsy, Ebay…) then it is the platform’s responsibility to sort out the VAT, and saying “we aren’t responsible for VAT” in their terms and conditions (as several smaller platforms apparently do) isn’t going to cut it.  It would be helpful if HMRC were to give some kind of clear assurance that people selling via (a list of platforms) needn’t worry about/engage with MOSS at all.

However.  Clearly it’s iniquitous that changes to close a tax avoidance loophole (allowing ebook sellers to use a platform registered in Luxembourg to avoid other jurisdictions’ higher VAT on ebook sales) are being introduced in a way which drives micro businesses into the arms of the platforms that caused the problem in the first place.  People who sell below the existing VAT threshold should continue to be able to sell the odd download off their own website without having to become VAT traders for a turnover that’s often below £80, let alone the £80,000 that would require them to be VAT registered.

So.  What we need is a platform which is

  1. revenue neutral (doesn’t cost you money to use)
  2. is co-operatively owned (on the Wikipedia or AO3 models perhaps) and
  3. does the job.

Now we could probably make one, given enough time (Kickstarter, anyone?)  But HMRC have regular meetings with their software development community stakeholders.  And they have modest funds to assist charitable causes connected with tax.  So maybe they could convene a meeting, urgently (seriously, next week) between interested software developers and the micro businesses who have contacted them via twitter, and they could kick in the first hundred grand or so to get the kickstarter off the ground.

Because really the easiest solution to the #VATMESS would be for the paypals and worldpays of this world to sort out the VAT when they collect the micropayments for the affected microbusinesses.  And if there were another, independent, cooperative payments organisation available who guaranteed that they did, well… competitition is supposed to be how capitalism produces innovation, right?  Let’s just give the micros a hand up.

There isn’t time before the changes are brought in on 1st January, you say?  Well, the Judicial Review process is there for anyone who feels that the legitimate expectation has not been met that a statutory instrument would only be introduced after the government has fulfilled the commitments it has made in the past to

  • consult with affected parties
  • “think small first” by taking into account the impact on micro businesses, and
  • give due regard to equality impacts

Judicial Review is expensive (who do we know who might be affected and has “willing to bet their house” kind of sums available?  The Prince’s Trust?  J K Rowling??) but (in my opinion as a former better regulation specialist in HMRC) there is an arguable case.  One remedy the courts could provide would be to send the government back to do the consultation again properly.  Which would delay implementation.  So they could, you know, just be good guys anyway and delay implementation for anyone below the VAT registration threshold for three months while an independent platform was developed via kickstarter.

Or they could just come up with a better idea on their own…

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Dear Tax Wizards: see, this is why you can’t have nice things

September 25, 2014

I really wish I had got around to reading the consultation on VAT and adapted motor vehicles before it closed, actually.  It’s about a proposal to alter the conditions under which wheelchair users can buy adapted vehicles without having to pay VAT.  Let’s pause for a moment and think about that.  Wheelchair users – and it’s clear from the condoc we’re talking about people using a wheelchair because of a permanent disability, not a broken leg, and that mobility scooters aren’t counted as wheelchairs for the purposes of this relief – can buy a car (or a boat – bizarrely, I first thought, but that was just my ignorance speaking) that is specially adapted for their use and they don’t have to pay VAT – on the cost of the entire vehicle, not just of the adaptations.

Now I’m going to pause there and point out that disability isn’t a simple binary, and some people might use a wheelchair some times and not others (People with relapsing-remitting MS, for example) and some people might have mobility problems yet find crutches and a mobility scooter better adapted for their needs.  Nevertheless the policy aim, of relieving people with disabilities from this particular tax burden, seems laudable.

And what happens?

1.18 The relief is being targeted and abused by individuals and organisations that purchase vehicles at the zero rate of VAT in order to sell them on for profit. This is clearly not what the relief was designed or intended for.

So… we have a laudable policy aim, a piece of legislation that is being clearly abused, and we tweak the law to try and delineate more clearly between the virtuous and the sinner?  This is how tax law becomes complex.

However.

3.5 Rather than adapting vehicles to meet the needs of the individual disabled wheelchair user, some dealers add the same low cost, easily removable, item to all the vehicles they zero-rate using the relief. These adaptations do not meet the individual needs of wheelchair users that require the vehicle to be substantially adapted.

Does HMRC have evidence to back up this assertion?  Because if they have, why are they not prosecuting the fuck out of the “some dealers” who are doing this?  I mean, what kind of person sees a piece of tax legislation that is supposed to help out people with disabilities and thinks to themselves “hey, if I get one of the lads to weld a bit of junk on the side I can make 20% on this!”  How do you sleep at night?

And then.

3.16 HMRC and the police have found that the relief is being abused by individuals and organisations purchasing expensive vehicles with minor, low cost, adaptations at the zero rate of VAT. They remove the adaptations immediately after purchase and sell the vehicles on for profit.

3.17 Some motor dealers have colluded in purchasing vehicles at the zero rate of VAT from one another. They then sell the vehicles on for significant profit.

3.18 Criminal gangs have been exploiting the relief to launder money and finance other illegal activity.

And again, why are we faffing about tweaking the law and not prosecuting the “individuals and organisations” to the full extent of the law, listing them on the “most wanted” website and showing us the thrilling details on “Saints and Scroungers“?

From the impact assessment:

The best estimate is that annually the adapted motor vehicles relief costs £65 million, of which about £25 million could be from fraudulent sales.

£25 million quid? How many people are working on hunting these people down, collecting evidence, and getting them in front of the courts?

Not enough.  A couple of years ago the ARC union said that if they could have £45.5m invested in another 150 trained lawyers and 50 legal assistants, they thought they could bring in £2,000m. (Line 7 of the table)  How about we just do that, and see?

 

(For the avoidance of doubt, yes, I think tweaking the law to make it a bit clearer – only one vehicle per person every three years – is a good idea.  But faffing about with mandatory declarations and fussy attempts to define the permissible adaptations aren’t.  Prosecute the bastards, please, and remember that disability isn’t a binary)

 

 

 

(Edited 25/9 to remove the duplication of “consultation” in the first sentence)

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Minimum wage

June 5, 2014

Could you live on the minimum wage?  Do you even know what the minimum wage is?

It’s £6.31 an hour, if you’re over 21.  That’s £227.16 a week if you’re on a 36 hour week.  Just under twelve grand a  year.  (And a couple of grand of that is still taxed, too)

Now imagine you’re in a crappy job that doesn’t quite pay you twelve grand a year, and you have to drive around to old people’s houses and make their dinners or get them in and out of bed, and you’re not paid except for the time you’re actually in the room with the client, because the rest of the time you’re on a “rest break” (because driving from one side of the city to another in the middle of the day is so restful) and you’re vaguely aware there’s something wrong with your wage packet because you seem to have been working like a dog for forty seven hours, counting from when you left the house till when you got home, but you’ve still got barely two hundred quid in your wage packet.

What are you going to do?

Because if you complain, if you stick your head over the parapet, why, you aren’t going to work again next week, are you?  And when you go to sign on, you’re as like as not to be told you’ve made yourself voluntarily unemployed so go away and starve quietly…

There’s an asymmetry, in other words, between the employer and the employee.  In the twentieth century you might have said, well, they ought to join a union, but Thatcher did for unions, didn’t she, so these days you’d say, well, there’s minimum wage legislation.  Ring the HMRC hotline…

Which is good, but HMRC have issued a “look how brilliant we are” press release today which has really got my goat.

First thing: is is legal to refuse to pay travelling time under those circumstances?  I don’t know, but the practice is so widely reported that I had assumed it must be.  But look at the middle of page 14 of this HMRC report which says that “time work” includes

travelling in connection with their work. This includes time spent:

o travelling between appointments (but not rest breaks)

o travelling from work to a training venue

Well, if travelling time IS included in minimum wage calculations, why not clearly say so?  Instead of issuing a press release bragging that you have

recovered average arrears of around £205 per worker.

Two hundred quid???  I mean, if it’s money they’re entitled to then, yes, they should have it – but I’d be a lot more impressed if there had been some prosecutions or that the

issued 652 financial penalties, worth £815,269

had been 652 penalties averaging £800 grand instead of totalling £815k – and so averaging £1250.  I mean, scary, right?  Plenty to keep some bastard employer from screwing his poorly-paid staff out of the money they’re entitled to in order to bump up his massive profits.  Oops – sorry, I’m being normative again…

Let’s look at the worked examples in that HMRC paper for a moment again, shall we?  Turn back to page 14 and look at example 1.

Example 1 Domiciliary care worker A is paid £6.35 per hour and is paid weekly. The employer has paid the worker £190.50 for 30 hours worked. Time records show the worker spent a total of 45 minutes that week travelling between clients that had not been recorded as working time.

How to check compliance with NMW legislation

The minimum amount paid to the worker should be £6.31 x 30.75 hours = £194.03

The worker was paid £190.50 so therefore has been underpaid the NMW by £3.53 that week (£194.03 minus £190.50).

Now, just hold on a minute there – the worker is paid £6.35 per hour.  They have been paid for 30 hours when they should have been paid for 30 hours and 45 minutes.  So they have been underpaid by .75x £4.76, but HMRC will only pursue for the difference between the NMWxhours worked and pay, and not for the difference between ACTUAL pay rate x hours worked and amount paid?  In this instance (and the 45 minutes is a pretty unbelievable travel time but let that go) it only amounts to a few pence but how is the worker to collect it?

Look at example two:

Example 2 Domiciliary worker B is paid £7.50 per hour and is paid weekly. The employer has paid the worker £225 for 30 hours worked (30 x £7.50) Time records show the worker spent 2 hours that week travelling between clients that had not been recorded as working time.

How to check compliance with NMW legislation

The minimum amount paid to the worker should be £6.31 x 32 hours = £201.92 As the worker was paid above £201.92 (i.e. above the NMW amount) no arrears are due even after taking account of the additional 2 hours working time spent travelling.

They have, however, been stiffed out of £15 – two hours’ pay – they should have been paid £240 (32 x £7.50) rather than £225 (30 x £7.50).  But because the amount they have been paid is more than the legal minimum, the HMRC NMW enforcement team is going to be no use to them.

That’s like saying everyone’s entitled to £57.35 a week, so if I come along and mug you and nick fifty quid out of your purse, the police won’t do anything about it if I leave you with £57.35, isn’t it?

Ah yes, but the administration of the benefits system and the justice system are different, and so are the administration of the NMW and employment law, right?  So the HMRC team that enforces National Minimum Wage can’t get involved if your employer is ripping you off in some way that doesn’t involve breaking the NMW legislation, right?

Sod that.  There’s an easy fix.  First, make it crystal clear that travelling time – except home to the first visit, and last visit to home – is working time.  Publicise THAT and the press release might be worth having.  Second, issue the workers and the employers with an official HMRC document at the end of any investigation which says clearly the rate of pay and the number of hours worked.  This then would be prima facie evidence that the worker could use to sue the employer for the rest of it, the amount they’ve ripped off that isn’t covered by minimum wage legislation – the five pence not enforced by HMRC in the first example, and the fifteen quid HMRC weren’t interested in, in the second example.

How would the worker make use of that?  Well, an individual worker could sue separately, but it’s likely to be too small an amount for an individual to take the risk.  But maybe for a collection of workers you might get, god help us, the claims management companies stepping in and suing the employer on behalf of a number of workers.  Or – and here’s a thought – how about some kind of collective worker organisation picking up the slack and advertising their services?  Anyone know any trades unions???

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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!)

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Get Carter

November 11, 2013

One of the things I am becoming increasingly interested in academically, and which you may have noticed as a recurring theme in this blog, is the disjuncture between people-who-know-about-tax and everybody else.  The most useful terminology I have found for this so far is to use a simile taken from Harry Potter and call the two groups “tax wizards” and “tax muggles”, particularly as the Potter analogy allows for people like me, a “squib” who knows about the existence of the tax wizarding world but doesn’t lay claim to any of its powers.

Let us thank goodness, then, for the Low Incomes Tax Reform Group, a charitable offshoot of the Chartered Institute of Taxation, which aims to be, well, I suppose the Potter analogy would be the Ministry of Muggle Affairs – to

‘Target for help and information those least able in the community to afford to pay for advice and make a real difference to their understanding of the systems of taxation and related benefits whilst working to make them more equitable and accessible for their needs.’

They supported and won a test case, TC02910: L H Bishop Electric Company Limited and related appeals (I’m afraid I can’t find a link to this that isn’t on a paid website but here’s LITRG’s press release about it) about mandation of VAT reporting online.  In other words, some people can’t, won’t or at least find it very difficult to, conduct their VAT relationship with HMRC purely over the internet and wanted the same exemption that people with religious beliefs that prevent them using computers have.  (Incidentally, I had always rather lazily believed that this exemption was in place for the Plymouth Brethren but I see from their website that apparently they have been using computers for five years now… in which case, who DOES get the “religious” exemption?  Does anyone know?)

The argument was, essentially, that people who don’t use computers because they’re old – they didn’t learn at school and they have no particular desire or need to learn now, and they find it harder to take on board new information by reason of their age – and people who have a disability – either a cognitive disability that prevents them absorbing the information on a computer screen or a physical disability which prevents them using a screen or keyboard – ought to be exempt from having to file online.  In addition, people who live somewhere that doesn’t have a broadband service sufficient to get them onto the HMRC system, again, ought to be exempt.

The HMRC argument can be summarised as: “tough.”  Or, at least,

  • ask a friend or family member to do it for you on their computer
  • use a computer in a library
  • pay an agent
  • use a computer in an HMRC enquiry centre, or
  • use the Sekrit Phone A Friend service they invented just for this case (don’t ask)

The tribunal, it’s fair to say, wasn’t impressed.  Libraries are closing left right and centre.  HMRC enquiry centres are either closed or scheduled to close.  Asking or paying someone else to make a return has privacy implications.  And HMRC inventing a telephone filing method but then not telling anyone about it, well, this is what the tribunal had to say…

435.
The current version of telephone filing, as offered to the joint appellants, requires the taxpayer to agree three months in advance with HMRC a day and time (in HMRC’s business hours) when HMRC will ring the taxpayer in order for the taxpayer orally to state the figures on the VAT return…

440.
HMRC does not accept that telephone filing is inconvenient. They point out that the HMRC agent would ring back if the taxpayer was engaged. But the protocol established by HMRC for telephone filing is that the agent will only ring back twice, and will then write a letter to the taxpayer in an attempt to re-arrange the phone call.
441.
I find reliance on the postal service to re-arrange a phone call is unrealistic: VAT returns are due on set days. Unless the taxpayer arranges the first call to be on a date long before the due date, he would run the risk that if the call has to be re- arranged, the new date will be after the due date.
442.
HMRC do not suggest that the arrangements for the re-arranged call can be made over the phone. It is not part of the protocol, and as evidence above has shown it is very difficult to contact HMRC by phone.
443.
I find telephone filing is not a very convenient option for submitting a time sensitive document, the late submission of which will incur penalties.
and then (and this is my personal favourite part of the judgement)

496. Its concessionary status was not the only controversy over telephone filing. There are (at least) three reasons why it might be unlawful:

  • It may ignore s 25(4) Value Added Tax Regulations 1994;
  • It is an unpublished and largely secret concession;
  • It may be “Wednesbury unreasonable” in that HMRC do not appear to have considered all relevant matters
Unfortunately, though, the judgement isn’t going to be much use to most people, since (as far as I understand the rather detailed technical arguments) the litigation was only possible because there was a decision by HMRC (to put the taxpayers into the first tranche of people, those who had to file their VAT returns online from 1 April 2010) whereas most people will have to file online from April 2012 by generally applicable legislation and not by an appealable HMRC decision.So…  judicial review of the legislation, would seem to be the next step for people who are affected by the change to online filing but unable to make the change by reason of age, disability, or inadequacy of broadband.

Now moving HMRC’s services online was part of a programme of change that came out of the 2006 Carter Review (which noted that:

3.7 Some people still expressed opposition, as a matter of principle, to compulsory use of online services, especially for certain groups, such as pensioners.

so HMRC can hardly claim they hadn’t been warned!)

Carter also was reporting from a different world, where online services would be accessible via free publicly funded services like libraries and HMRC enquiry centres:

5.9 We also recommend that HMRC should work with other public and voluntary organisations to ensure that access to the internet, and appropriate assistance with using IT, are available locally, for example at libraries and UK Online centres, for taxpayers who wish to file their returns online but do not own a computer.

The impact assessment for the Carter changes was updated in March 2009 and contains (at Annex C) a rather good suite of specific impact assessments including an Equality Impact Assessment and an assessment of the extent to which the proposals have been subjected to “rural proofing”.  My problem with these is that they are just words: it is no earthly use to anyone to identify that the solution may be:

through a visit to an Enquiry Centre (EC) to file (if mobility permits) or a visit by an HMRC employee with a laptop  [IA p34]

if you then close down the enquiry centres and fail to set up a mobile service of HMRC employees who can come round to your house with a laptop.

However the TIIN for the specific requirement for VAT to be filed online dismisses any concern for equality altogether:

Equalities impacts

Equalities impacts were considered in July 2008. This covered all the business taxes covered in Lord Carter’s report and concluded that the requirement to file online and pay electronically did not, of itself, disadvantage any specific group of customers from an equality standpoint (although, as with any change, some customers might need help to adjust).

Or, to put it another way, “we did this already, didn’t we?  Get stuffed.”

I look forward to seeing if the Ministry of Muggle Affairs chooses to fund a judicial review of the regulations mandating online filing.  If so, I’d be interested in seeing what they make of the equality assessment and its oh so helpful assumption that Carter is OK because HMRC thought about equality a bit in the noughties so we don’t have to bother with all that stuff any more.

Oh, and the rural proofing?

Other impacts

None.

Yeah.  Right.