Archive for the ‘HMRC’ Category

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Better

January 17, 2017

Yesterday I was in London for the launch of the joint Chartered Institute of Taxation, Institute for Fiscal Studies, and Institute for Government report on improving tax policymaking.

The report, Better Budgets: Making tax policy better, is here. There are ten suggested steps towards making tax policy better, the first of which – moving from two to one fiscal event each year – has already been adopted.

There was an interesting discussion at the launch including a response from the FST and contributions from Andrew Tyrie from the Treasury Select Committee and Edward Troup from HMRC.  There is even video – fortunately I was sitting out of sight of the cameras so it’s safe to watch!

The report is described as being the start of a conversation and I have some thoughts about that which I’ll put together later this week if I can.  However the interesting part of the discussion yesterday was, for me, the comments Edward Troup made about widening the conversation.  Because there was a feeling of familiarity about the collection of people in the room yesterday: I found I recognised a fair number of people and there was talk about “partnership” – between politicians and tax professionals – in making the Budget in future.  And, yes, I was tweeting that this horrified me, because tax policy is too important to be left to the wizards.  We need to bring the tax muggles on board too.  I was charmed – and immensely pleased and relieved – to find Edward Troup arguing for the inclusion of the muggles too.  Kudos!

Posted in Budget, HMRC, HMT | Leave a Comment »

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TIIN instructions

January 13, 2017

I have now received a response from HMRC to my Freedom of Information Act (FoI) request for the current TIIN instructions: there are some embedded in the TIIN template here:

170104_tiin_template

and some further guidance here:

170104_wendy-bradley_tiin-guidance

I am obliged to the HMRC FoI team for sorting this out, although of course it is evident from looking at the files that there are further instructions in the TIA (Tax Impact Assessment) guidance which has not  been included.  Nor is there any explanation of why this information isn’t part of the routine publication schedule – there really isn’t anything secret about it, and it’s useful data for those of us who take an academic interest in the way tax legislation is developed and produced, as well as for legal, accountancy and trade organisations who routinely give comments on tax proposals.  How about it, HMRC?

Posted in HMRC, Research, TIINs | 2 Comments »

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Open consultations

January 12, 2017

Oh look, there are still seven open consultations on gov.uk relating to the policy area “tax and revenue”.  Of course, it’s a slightly different list of seven from the last time I looked…

(Employment Allowance: restricting the allowance from employers of ‘illegal workers’ closed on 3 January

Withdrawal of extra statutory concessions – technical note and call for evidence opened on 10th January and runs till 7th March)

However as yet there is no sign of the promised responses to the seven consultations on the “making tax digital” proposals. And weren’t we supposed to be able to try out the free software in “autumn 2016′?  Er, hello?

Posted in Gov.uk, HMRC, MTD (Making Tax Digital) | Leave a Comment »

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Straws in the wind

January 9, 2017

You may remember that in 2012 I published the rules for production of a tax impact assessment here, after I obtained them via a Freedom of Information Act (FoI) request.  I remain surprised that they are not on the gov.uk publication schedule like the instructions for Regulatory Impact Assessments since they are the equivalent.  Well, 2012 is a while ago, so on 7th November I made a FoI request for an updated copy and received an automated response with a reference number.

A month went by, so I sent a little reminder that the twenty working days deadline had been breached, and received an email back which said

Unfortunately I am currently unable to confirm your request for information being received by the Freedom of Information Team.  I have noted the reference number you have provided would have been generated by one of the department’s online enquiry forms but am unable to trace your request…

The email went on to ask me for a phone number and I had a conversation with them where they said that my request – and, judging from the reference number, a number of others – had been lost in the system.  I emailed it again directly, and I’m still waiting for a response.

Except… well, last week I received this:

Please do not reply to this email.

Thank you for contacting HMRC. You have submitted an on line enquiry using an incorrect system to a mailbox which is no longer monitored. Due to this, I am unable to reply due to Data Security issues. Could you please direct your enquiry to the correct department by following the attached hyper-link or by reviewing your Personal Tax Account, details for which are below:

Is this a phishing email?  (Because who follows hyperlinks from emails, seriously?) Or is it a response to my original FoI request (which was made on the page I got from putting “FoI” and “HMRC” into Google – I find “incorrect system” a bit annoying tbh).  Am I ever actually going to get a response to my FoI request – which I made twice, once to the automated system and once in a clear email to the person who had phoned me, and I imagine the information commissioner will find at least one of those to be a valid request.  Look HMRC, what the hell is going on?

OK, but obviously the FoI form is a separate part of the HMRC computer system: a failure there won’t have any impact on the system they build for MTD, right?  I mean, right???

 

 

 

Edit: this morning I received this response from the HMRC phishing email address:

Thank you for contacting HM Revenue & Customs.

The e-mail / phone call you received was from HM Revenue & Customs and is nothing to be concerned about.

If you think this communication is incorrect, you may wish to contact the relevant HMRC business area. HMRC contact details are published within the link below:

https://www.gov.uk/government/organisations/hm-revenue-customs/contact

If your query relates to HMRC online services, you can contact our Online Services Helpdesk by telephone – 0300 200 3600 (opening times 08.00-20.00 Monday to Friday, 08.00-16.00 Saturday), or by following the link below

HYPERLINK “mailto:helpdesk@ir-efile.gov.uk” helpdesk@ir-efile.gov.uk
Regards

HMRC Online Security Team

I’m really none the wiser.

Posted in Gov.uk, HMRC, MTD (Making Tax Digital) | Leave a Comment »

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AQA

December 7, 2016

The Parliamentary Question is an arcane art: for the person asking, the art is to phrase the question as widely as possible so as to “fish” for at least some of the facts you might want to know.  For the person answering, it is to give the minimum amount of information compatible with not actually lying in the person’s face.

Why?  Why not just ask what you want to know and then answer the bloody question?

Here’s an illuminating exchange from the 5th December Small Business debate in the Lords, from Hansard, via the indispensable “they work for you” site:

Lord Vinson (Conservative)
To ask Her Majesty’s Government, in the light of the fact that most small businesses assess their profits annually in arrears, whether it is the intention of HM Revenue and Customs to make small businesses report their income and expenditure quarterly; and what assessment they have made of the feasibility of this requirement. (HL Deb, 5 December 2016, cW)

In other words, MTD, can it be done?

Lord Young of Cookham Lord in Waiting (HM Household) (Whip)
HM Revenue and Customs published a consultation document setting out the Government’s proposals on 15 August 2015 entitled “Making Tax Digital: Bringing business tax into the digital age”. The consultation included an initial assessment of the impacts on businesses. The consultation closed on 7 November. The government is currently considering the responses to the Making Tax Digital consultations and will publish its response and draft legislation in January, together with an updated Tax Impact Assessment.

In other words, we’ve done an initial impact assessment and we’ll refine it in January.

Let’s turn to that impact assessment, shall we?

Look at para 8.6 on page 60, for example:

…We recognise that many businesses will incur costs, including time costs in making the transition to a digital way of transacting with HMRC.  However we do not yet have a granular understanding of what those costs will be to provide an estimate at this time.

An impact assessment is about costs, not about feasibility.  The tax impact assessment process is about three costs: the cost or gain to the exchequer (i.e. the increase or reduction in tax due as a result of a change to the system), the cost or savings to the taxpayer (the administrative burden, in terms of the standard cost model – a very precise measurement of the average cost to the averagely competent business, but not a particularly robust or realistic assessment of the actual costs to an actual business) and, thirdly, the costs or savings to HMRC.  The question Lord Vinson asked was, I think, whether businesses would be ABLE to operate MTD.  The question Lord Young answered appears to have been an entirely different one.

Posted in HMRC, MTD (Making Tax Digital) | Leave a Comment »

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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 gov.uk 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?

Posted in Consultation, Digital, HMRC, MTD (Making Tax Digital) | Leave a Comment »

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MTD: it means “making tax digital”. (Why oh why would we want to?)

August 17, 2016

There’s a big hole in the heart of the seven consultation documents the government published on Monday about MTD, the plan to “make tax digital”, and it is this: why the hell are they doing it in the first place?

Seriously.  The overview document begins

The way you interact with the tax system is changing. From 2018 it will become increasingly digital and most businesses, the self-employed and landlords will need to use software or apps to keep their business records, and to update HMRC quarterly. The underlying tax rules will be simplified to support these changes.

Note the passive “is changing”.  Not the active “we are changing it…”

The main business document tells us baldly that it is consulting on how and not whether to MTD (make tax digital).

At Autumn Statement 2015, the government announced that, by 2020, it would require most businesses, self-employed people and landlords to keep track of their tax affairs digitally and update HM Revenue and Customs (HMRC) at least quarterly via their digital tax account. This consultation considers in more detail how these new processes should operate.

The Ministerial introduction tries to allay any fears we may have:

Freeing businesses from red tape and allowing them to flourish is a central part of our long-term economic plan for Britain. Businesses want a simpler tax system.

This is why at the 2015 Spending Review the government announced it would invest £1.3bn to transform HMRC into one of the most digitally advanced tax administrations in the world. We want to create something that is more effective, more efficient and easier for taxpayers.

OK then, but why (in the impact assessment chapter, on page 60) do we identify administrative burden savings for business of somewhere between £85m and £250m globally as against a saving to the exchequer (page 67) of £945 million – plus an uncosted benefit to HMRC from “significant operational changes”, including the orwellian “enhanced risk rules which will build in upstream compliance through nudges, prompts and personalised messaging for businesses” (page 71)

My problem is I think there’s probably a good idea in there somewhere, but HMRC have lost their mojo as far as communications are concerned.  They can talk to “stakeholder groups” all they like but they aren’t reaching the rest of us – and it’s human nature that commentators *cough* who aren’t on the “stakeholder” lists are going to be a bit pissed off that they had to find out about the condocs from twitter or from the Daily Telegraph.  My sole (thus far) academic paper is entitled “Tax Prats and Citizen Stakeholders” and “argues that othering non-professionals as ‘tax prats’ should cease in favour of inclusion of ‘citizen stakeholders’.”  In other words, we are all stakeholders in our country’s tax system and the conversation about a change as sweeping as this one shouldn’t take place only between professionals, whether they be professional tax practitioners or professional commentators.

What would I have done differently?

Well look at online tax returns.  In 2015 85% of us, over ten million people, filed tax returns online.  In 2002 it was seventy five thousand.  Why the change?  Because it’s easier, there’s no compulsion, and because there are benefits for both sides (you can do it later, and it works out how much you need to pay).

I’d have built an app and put it out onto the app stores and let people see for themselves whether it was better.  I’d have had a Hector the Inspector avatar walk you through what to click to get it to work and hired Ewan McGregor to do his Alec Guiness lite voice over.

I’d have made it simple as a game and made it work with all the most common accounting packages.  I’d have made it like a fitness app or a calorie counting app, where you can get the data from elsewhere (a fitbit or a barcode on your shopping, or in this case a bookkeeping app) or you can enter the data yourself… and then press a button to close it off/agree it’s correct.  I wouldn’t have linked it to the HMRC systems but I’d have had it tell users that “if your results for this quarter were repeated for the rest of the year you would need to pay [x amount] of tax and NIC”… and then I’d have worked out a way to make final result (“if you’re happy with the figures, click here…”) flow to the HMRC system, even if that bit had to wait a year or two.  I’d have spent half a million developing a clever, cute little app that did at least some of what the MTD project is supposed to do and put it out there free of charge for people to try if they felt like it, use if they wanted to.  And THEN we could have had a meaningful conversation about how to get people to use it, without arguing about whether we’re talking about four tax returns a year, compulsory photographing of receipts and using the system as a “cash cow”.  If you build it, they will come.

Posted in Consultation, HMRC, MTD (Making Tax Digital) | 1 Comment »

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Holiday reading?

July 20, 2016

If I’m reading the Parliament website correctly (and always assuming nothing has changed with the change of Prime Minister), then Parliament “rises” – goes on holiday – tomorrow, 21st July.  They will be off for the summer, coming back briefly for ten days in September before the party conferences, until term starts properly again on 10th October.   (And even then the poor dears will need a break for a week in November – what DO they do all day! – to see them through to Christmas.)

It really makes you wonder about the 65 open consultations listed on the gov.uk website today, doesn’t it?  Are people really going to give up some of their time to give their views on, say, the future of the inter-city West Coast rail franchise (closes 8th August) or the Personal Independence Payment (PIP) assessment: second independent review call for evidence (closes 16th September) when the Minister who signed off on the actual consultation may not be in place when the results are in, and in any event policy priorities are likely to have changed?

HMRC has six open consultations: each of them opened on 26th May and each has a closing date in August (and, great flying spaghetti monster, after all this time and a positive recommendation from the House of Lords Merits Committee why can gov.uk STILL not manage to let you list consultations in order of closure date???)

HMRC also has a new minister: Jane Ellison MP, the new FST.   Maybe the most useful thing she could do on her last day before the recess might be to have a quick look at the six consultations, check whether they still align with the new priorities she’s (presumably) going to be setting for the department, and decide whether they need to go ahead.  It’s my guess that a notice on the website (plus an email to “stakeholders” and other “usual suspects” who might be working on responses to the consultations) to the effect that they’ve been put on hold: take the summer off and come back in September… might be quite welcome.  What do we think?

Posted in Consultation, Gov.uk, HMRC | Leave a Comment »

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Industrial strategy

July 18, 2016

The new mission statement for the Department of Business, Energy and Industrial Strategy is interesting (read it here).  I’m particularly thinking about the first article:

developing and delivering a comprehensive industrial strategy and leading the government’s relationship with business

which is really two different things but they’re closely related enough that I can see why they put them together.

The new Minister, Greg Clark, has a statement on the website which basically could be translated as “squee!” which is all you would expect in your first day on the job.  However there are a couple of ways that a newly-energised BIS (oh all right, BEIS) could usefully interact with the tax and benefit system.

“Leading the government’s relationship with business”?  Maybe some bilateral talks with HMRC about their relationship with businesses, perhaps aiming to rebalance the energy which goes into large and small businesses.  What do I mean?  Large businesses get a customer relationship manager, they get to have “non-statutory business clearance” discussions (but never “sweetheart deals“): small businesses get self-service on a website.  What could they do in practice?  Are there any “quick wins”?

Well, maybe it’s time for an external look at the Administrative Burdens Advisory Board which is supposed to give HMRC an objective stakeholder view of the burdens they place on small business.  While they did sterling work back in the days of the Labour government, when HMRC had a series of “new relationship” papers at successive Budgets, setting out the work they were doing to cut the measurable admin burden by 10%… now?  Maybe the membership needs a refresh, the remit needs a wash and brush up… The telling thing for me was that ABAB – the small business champions – and the EU VAT Action Group – the quintessential small and micro business group – had never heard of each other when I posted the ABAB survey on the EU group Facebook page.

Secondly, as you will know if you have been a regular reader of this blog, my major bugbear with the HMRC relationship with taxpayers is the “stakeholder” model, which seems to me to resemble the pre-revolutionary France “estates” model.  It’s possible to make your voice heard in HMRC and the Treasury, but your voice will be listened to a lot harder if you’re a member of a big city legal firm, a major accountancy firm or body, or a trade association.  It doesn’t have to be that way: it would be perfectly possible for HMRC to get views and opinions from small businesses, but it takes time and money and effort: it takes going outside of London and outside of business hours and outside of the civil service comfort zone.  It takes explaining the issues in plain English to people who aren’t going to fall over themselves with delight at the thought of talking about tax but who are going to be interested when you let them know how it connects with them and their lives – and who are going to be bloody furious if they only get to read half-informed journalism instead.

So those are my suggestions for the new Department’s “we lead on relationships with businesses” chat with HMRC: have a look at the allocation of resource between small and large business, and at the “stakeholder” concept.  But by the rule of three, this sort of article ought to h ave three ideas, right?  Well here’s a Modest Proposal for the “industrial strategy” part of the remit.

Why don’t unemployed British people take jobs fruit picking?  Why do farmers complain that they only take on foreign fruit pickers because British people won’t take the work?

This is a question only asked by people who have never been unemployed (or at least not in the modern “austerity” age of unemployment).  If you are on JSA  or Universal Credit you’re in a binary system: either you have a job or you don’t.  Who would take the risk of taking on two weeks’ work picking fruit at minimum wage if they are then going to have to re-start their application for benefits from scratch, including waiting six weeks to get anything at all…

If you had a basic income (give everyone ten grand a year instead of a tax allowance or benefits, and tax them at a moderate rate on anything over that) then your fruit picker would be two weeks better off from their two weeks work.  And you could go back to having useful offices called Labour Exchanges, whose job was actually to find you a job…

Posted in BEIS, HMRC | Leave a Comment »

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Digitalis

May 25, 2016

I don’t want to say much about the NAO report on HMRC’s customer service, out today, except to note this:

As a consequence, though HMRC continued to live within its agreed budget, the quality of its service to taxpayers collapsed in 2014-15 and the first half of 2015-16. In hindsight, this was a mistake, and not value for money.
In other words, it prioritised “saving” money over customer service.  Because “taxpayers” are citizens with rights, but “customers” are economic units who can be ignored if they’re not profitable.

When compared to HMRC’s data on the annual cost of answering calls, the NAO estimates that the increased cost to customers was £4 for every £1 saved by HMRC over this period. (NAO)

In other words, there was – the NAO found – a direct correlation between HMRC’s “savings” and the administrative burden placed on taxpayers.

HMRC came back gamely this morning with the usual line about this all being in the past and everything today is rosy and bright…

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The problem is, that as we go forward into the Brave New Digital World, we don’t really believe them.  There is evidence that they prioritised cuts over service in the past.  There are firm plans to cut staff further and relocate them where pesky customers can’t get to them for the future.  Why should we believe that the “best customer service performance in years” won’t dive back down to rubbish in the next few months and years?  As Richard Murphy suggests:

Stop the office closures.

Stop the redundancies.

Make digital services optional.

Provide the support people need.

Make paying tax possible.

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

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