Remember the complaint that was settled on 24th March with an offer of £25 compensation? The cheque arrived this morning, eight working days later.
Is that good, or is it a bit much? The cheque is actually dated 25/3 so it doesn’t look like delay by the complaint handler but merely another example of HMRC’s notoriously labyrinthine mail system.
So tell me. Is that a long time, or have we just got used to waiting a fortnight and feeling lucky if it’s less?
Today, some interesting rumours reach me of proposals to de-merge HMRC and restore the historic brands of HM Inland Revenue and HM Customs and Excise. I hear that the proposals, which are to go out to consultation in the next few months, will also include a clever exit from the once-controversial Mapeley contract and a move out of leased and into properties owned by the taxpayer, saving millions in rent and services payment and creating several thousand jobs in providing building and other services direct by newly-appointed staff who will also be available to perform “back office” functions at times of need.
The de-merger will also herald the de-industrialisation of tax, as both restored departments return to a local office structure. The main change that taxpayers will see is that they will once more be able to speak to someone, face to face or over the phone, who actually knows what they are talking about, will give their name, extension number and email address, and will then take responsibility for working an issue through to its conclusion.
I hear that the de-merger will come with a hefty staffing and budget increase, to be paid for by the expected rise in collection and compliance yield and narrowing of the tax gap. There is also likely to be a new task force bringing long-standing disputes to a conclusion via rapid litigation, following which the task force will direct its expertise into prosecution of all tax offences resulting from the new alignment of prosecution thresholds for tax, customs, excise and benefit cases.
Whether the coalition can bring this off in time before the election is, of course, in considerable doubt, but I hear that the timetable is
May 2014 consultation
July 2014 consultation ends. Enabling legislation passed
September 2014 contracts signed for new local office accommodation
December 2014 first District Inspectors appointed and begin appointment of supporting staff
February 2015 New offices occupied and shadow operations begin while skeleton staff winds down the last of HMRC operations
1st April 2015: New IR and New C&E begin operations.
So I got my tax repayment on Friday, so I don’t have to spend the day on the phone tomorrow following up on my “chase repayment” phone call. Well, I say I got my repayment – I got the money in my bank account, and the paperwork will (presumably) follow? All I’ve had so far is a bill for the trivial amount of tax for 2012-13 which they had automatically repaid when I put in my return, which has presumably been paid from the rather larger amount they have repaid from the carry back of losses to 2011-12 which they have now actioned. But, fair’s fair, if it’s a choice between getting the money and getting the paperwork, I know which one I’d prioritise.
And then there is my complaint…
I made a complaint. HMRC grudgingly agreed I was correct (or at least that they wouldn’t try to collect the disputed amount) and then tried to collect the disputed amount via my tax code anyway. So I had to make a second complaint.
Now I have a letter from the same complaint handler as the first time, apologising for the incorrect code and offering me £25 compensation. Again, I haven’t had either the £25 or the revised coding notice. But, again, it’s a timing issue and I’m prepared to believe they mean it this time.
But, be careful out there!
*edited Monday lunchtime 24 March 2014. The postman called… and brought me my new tax code. And it’s right! Hurrah! Well done complaints handler!
I was surprised at the response to my post yesterday about the four week time lag for HMRC repayments. Because four weeks isn’t necessarily a ridiculous amount of time for HMRC to take to check a repayment. Yes – if you’re thinking about the old-fashioned pre-decimal Inland Revenue kind of check, where an actual human being would look at your accounts every year and decide where they were in the ERA classification. A for accepted, carry on and process, R for review, where someone would look at them and check the technicalities of the computation, and E for examine, where the basis of the accounts figures would be investigated.
Only we aren’t there, are we? We’re in the post-merger, industrial processing, minimal handling era, where accounts should be processed now and checked later, and the only intervention should come from an actual risk assessment from someone other than the person who would be addressing any risks that had been identified.
So why would “process now, check later” take four weeks to process?
Well, being even handed about it, because you wouldn’t want to set up a system where someone can enter a tax return that shows they are owed a bazillion quid, process it, hand over a bazillion quid and then only later go knocking on the door to say, er, actually, can we have our ball back Mister? So it’s absolutely right that HMRC have some kind of “wait a minute…” check in place before they give me my money.
And four weeks isn’t THAT long…
There’s an easy fix.
Let’s have a proper consultation and decide on a maximum amount of time that HMRC and taxpayers can live with (not a target time, a maximum time) for a repayment to be made. Let’s say we fixed on, what, 14 days?
Write a piece of code that ranks all waiting repayments in order of value, and assesses the current average processing time.
And then repay the ones that would fall out of that time limit, starting from the smallest.
You would have a job gaming the system because it would be a dynamic limit, depending on how fast HMRC were going over a given period of time. But the repayments of a bazillion quid would be guaranteed to stay at the top of the “check before repaying” list. And my repayment would have a reasonable chance of popping out of the system before the end of four weeks.
Except you’d have to stop HMRC from gaming the system too – make the system dependent on them dealing with the cases in order of value, largest amounts first. So then there would be a proper decision-making process within the department over what resources to devote to pre-repayment checking, so they could make an operational decision what size of repayment would trigger them putting in extra resources. Would they be happy with repayments up to a fiver, a grand, ten grand… being processed automatically?
Damn and I’m too late to put it in as a Budget suggestion for this year too! But that means you have a year or so to pick the holes in the idea – go!
I try the HMRC automated system again. This time, because I’m trying to do something it understands (“chase repayment”) it’s actually kind of cool. Or at least it would be, if you were a science fiction buff who enjoys living in the future and so gets kind of a kick out of interacting with intelligent sounding machines. And not, say, someone who actually needed the money.
It asks me if I know when I last contacted HMRC about the repayment. I enter the figures on the telephone keypad (rather disappointingly, since it breaks the illusion that you’re speaking to a machine that might pass the Turing test. Because, you know, counting?)
The recorded voice informs me HMRC are currently taking up to [robot pause] four [robot pause] weeks to deal with repayments and sternly requests me not to contact HMRC again until [robot pause] twenty. fifth. march.
It didn’t actually SAY “get stuffed”. But, honestly, I think I might have respected it more if it had.
You’re going to have to bear with me. I’m going to talk about Intrastat, and about Administrative Burden, and unless you’re a statistician by trade or inclination, they’re about the most snooze-worthy topics imaginable. Try and stay awake at the back – I’ll smuggle in a joke or a quiz somewhere- (or consider printing this entry out and reading it in bed and you’re almost guarantzzzzzzzz…)
I’m awake. Honest!
OK then, look at this page of incredibly boring trade statistics. Or don’t, but DO read this explanation:
These statistics record the movement – for trade purposes – of goods between the UK and both EU and non-EU countries.
They are collected from the EU-wide Intrastat survey and from Customs import and export entries, both administered by HMRC.
Now, I read this as meaning we’ve got trade statistics collected by two different methods; within the EU via Instrastat, and outside the EU from “Customs import and export entries”. So my first thought is, are we comparing like with like? I’m guessing that there are good reasons why not, because the EU is supposed to be a free trading zone and there are different customs duties applied to goods from outside the EU.
Intrastat is statistics (the “stats” part) from trading inside, “intra”, the EU. With me so far? But there’s no need, theoretically, for people to tell the authorities what they’re exporting and importing within the EU, so the Intrastat process seems to be finely balanced between forcing people to provide data that gives them no individual benefit, and obtaining data which does have some kind of collective benefit. The benefit or otherwise of having trade statistics at all is left as an exercise for the class. Write on one side of the paper only, and, please, refrain from showing your workings.
Now the UK is pretty groovy in the field of administrative burden; we have a high threshold for VAT registration (is it still the highest in Europe? Anyone? Bueller?) We used to have a serious programme of reduction in administrative burden …
All right, it’s probably time to talk about administrative burden now. Get an expresso, I’ll wait.
“Administrative burden” is a way of conceptualising the cost of regulatory action. Think about it this way. If the government makes you spend one afternoon a year filling in your tax return, you lose an afternoon out of your life. You could have been reading a book, watching bad telly, taking your kids to the park… But there isn’t – theoretically – a monetary value to stick on that. But if a business has to spend an afternoon filling in forms, there conceptually is a hard monetary cost to that. The three hours your hairdresser spends filling in her tax return is three hours that she isn’t cutting hair, so she’s theoretically lost 3 x her hourly profit. That’s the measure of the “administrative burden” of regulation.
(Sidebar for the excessively caffeinated; in 2010 the government decided your time in the “reading a book, watching bad telly…” example does have, if not a cost, at least a value. It’s £14.20 an hour. So there.)
So. There’s an “administrative burden” – a cost to business of the time they spend filling in and sending off the forms – to “intrastat” – the statistical information about movement of goods inside the EU.
Now interestingly enough the last government had a five year mission… I mean, it set up a five year programme to reduce the administrative burden on business by 10%. Although, rather heartbreakingly for those of us who might have agonised over some of the work on it, by the time they’d gloriously achieved the target there was a new government who didn’t give a hoot about what the previous government had done but certainly wasn’t going to let anyone crow about them having reduced the regulatory burden when the new narrative was all about the red tape challenge. So the results were in an unpublicised Budget paper called “Delivering a new relationship with business” and oooh look at paragraph 2.5 on, would you believe it, Intrastat:
2.5 On 1 January 2010 the exemption threshold for completing Intrastat forms for arrivals was reduced from 97 per cent to 95 per cent. All VAT registered businesses who reach the threshold for their value of arrivals or dispatches (goods arriving from or going to other Member States) are required to submit Intrastat declarations on a monthly basis. The threshold reduction means that around 6900 businesses will no longer have to complete the arrivals declaration and will benefit from a share of the estimated £1.8 million admin burden savings.
Now my calculator says that £1.8m divided by 6900 is £260. So it cost £260-ish to fill in an Intrastat survey each year back in 2009? It says it in the impact assessment, so it must be true.
Well if we look at the consultation into a further “simplification” of intrastat (closing date for comments 8th April) there are a couple of draft TIINs for the options under consideration. Tick v.g. to the policy team for correct use of TIIN to cost out the options under consideration, by the way – the idea of doing an impact assessment is to look at the costs and benefits of options and decide on the best policy action according to the balance of costs and benefits.
So we are currently looking at options.
One of them, is the EU proposal to collect data only from exporters. You can see the benefits: if you only ask one side of the transaction to report, you can halve the amount of data collected. So I sell a million widgets to France and there’s only one form to fill in, the one saying I sold them, and not two – one by me and one by them – but provided the data is shared across europe the total information collected is still the same.
However we don’t seem to like that idea. I’m not sure why, but the condoc drips condescension towards it:
“Theoretically, there are superficial benefits to be achieved by doing this…”
and
“It also appears to make the existing asymmetries between Member States data disappear overnight.” (and no, not my emphasis!)
Let’s have a look at the options and what they’d cost.
Option One – SIMSTAT proposal – removal of the requirement to submit arrivals declarations (with additional data requirements at dispatch)
In other words the EU proposal, to make the data collection one sided, from the sender only. So you’d only collect information from exporters (and not from both importers and exporters) but you’d made the exporters give a bit more detail.
If you look at page 12 of the consultation document you’ll see the impact assessment suggests HMRC would have to spend £1.1m on computer equipment and the administrative burden on businesses would go UP by £0.6m.
(Irrelevant joke insert: What do you call a man with a plank on his head? Edward. I told you I’d smuggle in a joke if you stayed awake till the end.)
Then there’s option two, which seems to be the worst of all possible worlds: increase the data requirements on exporters and (slightly) reduce the numbers required to give information on imports, or, as the condoc has it
Option Two – SIMSTAT proposal (with additional data requirements at dispatch) – reducing coverage for arrivals to 90% to meet national requirements
This one still costs HMRC £1.1m AND increases the admin burden by £2.3m. So let’s not do that, eh?
(oh, and Irrelevant Joke data: you have to pronounce it ‘ead wood)
Then there’s the Third Way.
Option Three – Alternative simplification proposal: 93% coverage for arrivals and dispatches (used for illustrative and comparative purposes)
This one apparently doesn’t cost HMRC anything AND it reduces the admin burden by £3.6m a year. Oh, and it takes 8500 of the smallest businesses out of having to produce stats at all which, my calculator suggests, will save them £423 each and that seems quite a lot more than the £260 it was costing businesses in 2009 but there you go.
Now impact assessment theology would suggest it’s a no-brainer that you simply do that one; achieves the same objective and costs less.
So why are we having a public consultation on it?
The consultation is directed at people who either have to produce intrastat declarations, or make use of the resulting trade statistics. But it’s the “how did we get here” bit of the consultation that interests me:
The EU Commission have put forward a proposal to modernise the Intrastat system which is targeted for implementation from 2017.
To offer a more immediate simplification, during 2013 HMRC informally consulted with businesses required to submit Intrastat declarations and users of Intrastat data on a proposal to reduce the coverage of trade on which data must be collected by the Intrastat system for arrivals from 95% to 93%. The UK, along with other Member States, worked with the EU Commission to deliver this change and as a consequence the EU legislation has been amended resulting in an increase to the Intrastat Exemption Threshold for arrivals from £600,000 to £1,200,000 from 1 January 2014.
So are we saying that we’ve already achieved option 3 and we don’t want any further change? And that further change will add to HMRC and to businesses’ costs? And we’re trying to persuade our fellow states that we don’t need to make any further change?
Well then, I go back to, why the consultation?
Are we – I wonder – hoping that affected international businesses will kick up a fuss in other european states and get them to back the UK proposal/status quo? Or are we genuinely looking to confirm or refine our costing data, since there seems to be some question over the cost of the increased data requirements on the exporters if we went to the asymmetric method.
Speaking as a PhD student, wouldn’t it be cheaper, or at least more efficient, to spend some money on getting some research done? Stick a few grand in the pot, get the other member states to do the same, and get someone to lead a research project and send a bunch of eager young PhDs and post-docs out to get some actual data from some actual businesses and write it up in a comprehensible way? (And dear god no, I’m not pitching for the work!)
In other words, while Oliver Letwin might not think that consultation is the place to gather “views”, I’m not entirely certain it’s the right place to gather “data” either. And maybe this is an instance where data would be more valuable than views.
(Irrelevant joke insert: What do you call a man with three planks on his head? Edward Woodward.)
Thank you for staying awake. As you were.
Oh dear. HMRC have gone and got themselves one of those automated phone response thingies that sounds at first like a human being. So you don’t have to listen to an endless menu and press one for self assessment, two for VAT… Oh no, instead you can talk “naturally: to it.
For some values of “naturally”…
I spoke to two extremely courteous, helpful, and knowledgeable (about their area, anyway) HMRC people this morning. They pretty much solved the problems I had, or at least once I get the information one of them was going to send out to me I”ll be able to amend my return and actually get all the figures in the right spaces (and STOP laughing at the back, there!)
But before I got to them…
I know they record calls – they warn you about it while you’re still listening to the blah blah blah you have to endure before you get to the human being. But I really hope they don’t record your transactions with the IDIOTIC INFURIATING AUTOMATED SYSTEM THAT DOESN’T UNDERSTAND A WORD YOU SAY. Ahem. Because I for one have much less patience with them than I do with, you know, people.
Here we go again. Tax wizards get to have opinions about tax and are listened to by HMRC and the Treasury. Well, sometimes, anyway. And the rest of us – the tax muggles – can just stop worrying our pretty little heads about our tax codes and pay up when required.
Yes, HMRC has published some lovely HMRC Stakeholder Research … which, as Richard Murphy points out, may have been conducted by Ipsos Mori, an independent organisation, but was conducted using a sample “provided by HMRC”. Er… I might not have got very far in my academic research, but that one rings all the ethical bells they’ve been at pains to install in me!
So who are the hand-selected stakeholders whose opinions are so important to HMRC? Why, they are:
Hmmmm…. sounds more like market research to me. You know, where you go to your biggest customers and check whether your corporate brand is on the up or not.
Maybe we just differ on what we mean by “stakeholder”? There are dozens of academic articles on stakeholder identification and stakeholder salience backed up in my reading queue. I’m pretty sure, though, (without getting even half way down the list) that “stakeholder” doesn’t actually mean what HMRC seems to want it to mean in this report.
Look at it this way. It’s a perfectly legitimate object for a large organisation to want to know how it is seen by the people who will influence its future. If you were a government department, you’d want to know how MPs and journalists viewed you. If you were a government department dealing with finance, you’d also want to know how your biggest payers viewed you. It’s no different from a TV channel taking more notice of its advertisers than of the people who watch the programmes. We’re all stakeholders in the channel, but you’d expect them to take more notice of, you know, the ones with the money.
Oh, and look here: HMRC did the same survey with a similar group of “stakeholders” last year. Only LAST year they asked about consultations:
Opinion was split among stakeholders on HMRC’s consultations. While most felt that HMRC understood their needs, similar proportions felt consulted and not consulted on issues that affect them. While many consultations were felt to be relevant, useful and well run there was a sense that some were a matter of “box-ticking”. These are then seen as a waste of time and potentially serve to damage relationships as feedback may not be listened to or acted on – especially if many consultations arrive at the same time so stakeholders do not feel they have the resources to respond to them all.
Stop laughing at the back, there!
HMRC have done this before, of course. Remember the “stakeholder conference” last July? Have a look at the link here and scroll down to see the names of the “stakeholders” who were invited. Who represents you in that list? (The Daily Mail? The Prince’s Trust?? TaxAid???)
There’s the thing. There are nearly thirty million people paying income tax in the UK. Aren’t they – aren’t we – also stakeholders of HMRC’s? Of course we are. The difficulty is, how do they find a way of talking to us? We express our opinions via the ballot box, but which of us voted for “tax competitiveness” (and how do we vote against it?)
But look at the “future challenges” identified in the first piece of “stakeholder research”, and quietly ignored in the second:
The main challenge facing HMRC, according to its stakeholders, is improving its public perception and trust. In particular, this seemed driven by a negative perception that HMRC does not treat all customers and taxpayers in the same way (particularly comparing its treatment of ‘ordinary’ individuals or small businesses with its attitude towards large firms…)
If HMRC doesn’t talk to the ordinary, the small, the muggle… then we have a problem.
A search on “open consultations” in the category “HMRC” on gov.uk today tells me there are three open consultations. I’m not sure I believe them after the shenanigans I reported on in my 7th January post (customer service tip: if someone tells you a site isn’t working, the least helpful response is “I don’t currently see any technical problems…”) but let’s roll with it.
The three are:
Real time information: legislative changes. Opened 29th November (so why didn’t it show up when I searched on the same terms on 7th January?) and it closes on 24 January. Incidentally, wouldn’t it be really, really helpful if you could search on closing date on gov.uk? Or at least that you could tell from the search results when the consultation closes and didn’t have to click through to find out?
Onshore employment intermediaries: false self-employment. Opened 10 December, closes 4 February.
Assistance with electronic filing of VAT returns. Opened 20 December, closes 14 February.
So let’s start with the Real Time Information (RTI) one. RTI, in case you didn’t already know, is the PAYE equivalent of Universal Credit – it’s the New! Improved! All-singing! All-dancing! method of making sure that Universal Credit will work because the government will know, from timely information from employers, who has worked where and when, so people will – perhaps, if it all works, fingers crossed – finally be able to dip in and out of paid work without screwing up their benefits for six months.
But from an employer’s viewpoint, it’s a royal pain. You have to report payments to employees when you make them, not at the end of the month or quarter or year or whenever you can stop to draw breath.
There’s little point looking at the actual consultation, because this is one of the Finance Bill consultations – in other words, the policy has already been decided and we’re not being asked for our opinions on whether it’s a good idea or not, just for technical comments on whether or not the regulations that have been written will actually work as described. And I don’t really feel like doing the government’s unpaid copy-editing for them this morning so we’ll skip that.
There are a few interesting things we might want to think about, though.
First of all, the TIIN (surprise!) They aren’t publishing a TIIN with this because they’ve already published one. In fact they’ve published two, one for the penalty regime here and one for the actual policy change.
The one for the penalty regime says that there will be no actual exchequer impact. In fact the government says it doesn’t expect to get any money in from these penalties at all, or at least an amount which shows up as “nil” on a TIIN. If memory serves, that’s something like a quarter of a million threshold (grateful if anyone can confirm or amend this figure please?)
That’s a good thing, of course. The point of penalties is to change behaviour, not to collect money. The idea is that people should make the change to RTI and get used to sending the same information they would always have sent, just a bit earlier and in a different way. I can see two problems with that.
First of all the level of the penalty. It needs to be a “smacked wrist” amount – enough that you know not to put your hand into the fire but not so great that your parents get done for child abuse. So if you’re a small business with up to nine employees, it’s a hundred quid. Enough to make you want not to incur it, but not enough (one hopes!) to bankrupt you.
But look at paragraph 16 of the condoc:
16. Regulation 67I sets the size of the late filing penalties as follows:
£100 for schemes with 1 – 9 employees;
£200 for schemes with 10 – 49 employees;
£300 for schemes with 50 – 249 employees; and
£400 for schemes with 250 or more employees.
If I have 300 employees on the average wage of £26,500 then I’m paying out over half a million in wages every month (£26,500 x 300 / 12 = 662,500). Now, in comparison to £662,500, is £400 a “smacked wrist” or is it, well, peanuts? An amount which it might very well be worthwhile my incurring so I can sort out my RTI submission at my own pace?
In other words, I think they got the gearing of the penalties a bit wonky. But it’s too late now, we’re not being asked to comment on that.
Secondly, as I have commented before, there’s not a great deal of point charging “smacked wrist” penalties if you don’t actually go out and collect them, and is HMRC now committed to sending someone round to knock on the employer’s door if they incur a £100 or £400 penalty and explain to them how it arose and, more to the point, what they can do to avoid incurring another? Otherwise I think that “exchequer effect – nil” may turn out to be, shall we say, optimistic? Or should that be pessimistic?
And finally, what about the equalities impact? I said in my response to the consultation on the actual policy that I was worried about the impact on “care and support” employers, which is HMRC jargon for people who have employees but who aren’t businesses. People who employ nannies, for example, or, more worryingly, people who are given a “care budget” instead of a home help and have to get on and organise their own support package including paying their carers and working out the tax due on their pay.
In the TIIN for the actual policy it says under equalities impacts that
Care and support employers will also have the option to file RTI on paper, and those wishing to use this option will report RTI from April 2014. This date has been deferred from April 2013 in line with customer feedback, to allow more time for HMRC to thoroughly test the new paper forms and guidance with customers who will use them.
So. We’re not publishing another TIIN. We’re not updating the equalities impact, then? Has there actually BEEN any testing of the impact on care and support employers? Are they happy, or at least confident they’ll be able to comply? Does anyone know?
Sigh. I’d write to my MP again, but it’s Nick Clegg and I think he’s probably getting sick of hearing from me about inadequate government equality impact assessments by now. Over to you.
Am I just hungover or is there something wrong with the HMRC TIIN archive? If you go to the HMRC website and look at the library page here: http://www.hmrc.gov.uk/thelibrary/tiins.htm there’s a chronological list of TIINs but it stops at December 2012 and says
All recently issued TIINs can be accessed from the chronological list below, and earlier publications are available on the National Archives (Opens new window).
But if you click on the National Archives link it takes you here: http://webarchive.nationalarchives.gov.uk/+/http://hmrc.gov.uk/thelibrary/tiins.htm … which is just the archived version of the page you’re looking at in the first place and doesn’t get you to the older TIINs at all.
Is it me? I think I’ll come back to this when my head’s stopped throbbing quite so much. Sigh.
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