Archive for the ‘HMT’ Category

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Summertime blues

August 23, 2017

It’s August, Parliament is not in session, Big Ben’s bongs are silent: yet there are still 62 open consultations listed on gov.uk.  Less is more, guys, please!  (At least, in the sense that we want less legislative activity and more administrative competence from our government, not that we want fewer consultations on what legislation they DO introduce, of course.)

However there are currently zero, count them, zero consultations listed from HMRC. Hurrah!  and, is this unprecedented?  Enquiring minds want to know!  The sole HMT consultation is on developing the supply of capital for “innovative firms” (Bank of Dave, anyone???)

However – should you still be sitting in an office somewhere idly reading blog entries and pretending it’s work – there is another way you can contribute to the government’s developing policy and administrative agenda: yes, you too can Help Make Gov.uk Better by joining the panel of service users contributing to their research.

Yes, I’ve joined.

No, they still haven’t found a way of listing consultations in the order in which they close.  Sigh.

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Good news, bad news?

July 14, 2017

Great news yesterday, with the announcement that Making Tax Digital has been postponed and that only businesses with a turnover over the VAT threshold will have to keep digital records until, well, this government has either gone or has consolidated itself enough to be able to get the legislation through.

This is the best of all possible worlds – or at least it is at first sight.  Because of course HMRC needs to have a modern computer system that isn’t held together with string, prayer and for all I know a couple of  floppy disks.  Of course we should be able to log on and see our tax returns already pre-populated with the information HMRC already knows about us, the stuff from our P60s and bank interest and what have you.  MTD is a customer service imperative.

The problem is that the Treasury won’t pay for that kind of thing: it had to be pitched as a project that would pay for itself, and that’s when you get into the ridiculousness of trying to make teeny tiny businesses that keep perfectly adequate paper records move online or perish, in the absurd belief they’ve all got seventeen grand or so stuffed down the back of the sofa.

So keep the good stuff, the modernisation of the online interface, and ditch the bad, the mandation/penalty routine?

I wish.  The HMRC annual report and accounts for 2016/17 came out yesterday.  I know it’s a couple of hundred pages so I can’t pretend to have done more than skimmed it so far, but for me the key question is this:

do they still get the money?

Does HMRC still get the funding to upgrade its computers to MTD and to do the necessary work on pre-population without the spurious promise of resultant tax gap closure?  I can’t tell from the accounts.  Did they get MTD funds in 16/17 and will they get the rest in 17/18 and beyond.  I can’t tell.

Anyone?

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Tax simplification and better regulation.

January 18, 2017

My PhD-in-progress asks the question whether using better regulation techniques produces tax simplification, a question to which the glib answer is, of course, “it would, if they did”. So in keeping with the Making Tax Policy Better report and the suggestion that this is just the start of a conversation, I have been wondering what progress we might make towards a simpler tax system by making better use of the tools we already have.

Look, for example, at the 51 TIINs published on 5 December to support the draft 2017 Finance Bill.  If you take these and put them into a spreadsheet, listing the three quantifiable fields (exchequer impact, administrative burden and HMRC costs) what do you find?

The measures fall into three crude categories.  Firstly, there are those measures whose overall impact will be greater than £100 million.  Insurance Premium Tax: increase of standard rate, for example, or Abolition of Class 2 National Insurance contributions.  The Chancellor must be allowed to determine how and where he raises the money he needs to fund the expenditure he incurs: decisions about these large measures is political, and we can leave them alone for these purposes.

Secondly there are the measures which have smaller impacts. Personal Tax: changes to bands for ultra-low emission vehicles in company car tax for example will raise some tax, save some admin burden and cost HMRC some money.  Personally if I were an MP debating the Finance Bill I would want these relatively trivial measures to balance out: I would only allow as many measures which increase tax by amounts less than £100m as there were measures which decreased tax or administrative burden by similar amounts.  I suspect if this balance were demanded, the number of such measures might significantly decrease.

Finally there is the category to which I would wish to draw your attention today.  There are fully twenty measures where, so far as I can see, the exchequer effect (the actual tax raised or foregone) is zero, and both the administrative burden on taxpayers and the cost increases or savings for HMRC are either nil or negligible.

The question then is – why the hell are we doing them?  Here is a random selection:

Tobacco Duty: Illicit Trade Protocol – licensing of tobacco manufacturing machinery is a provision to licence tobacco manufacturing machinery.

Co-ownership authorised contractual schemes: reducing tax complexity seems to be a tidying-up of capital allowance rules for operators of co-ownership authorised contractual schemes (CoACS) and their investors, and yet will have a “negligible” impact on the tax they pay or on their administrative costs.

Landfill Tax: definition of taxable disposal will affect approximately 150 specialist disposal firms in England (the tax is or will be devolved in Scotland and Wales) and they will “incur negligible on-going savings through the removal of the requirement to inform HMRC about certain non-taxable activities.”  (HMRC couldn’t have just written them a letter??)

The Treasury and HMRC have an easier ride than other Departments in getting legislation before Parliament: they do not have to bid for space in the legislative programme, and Finance Bills are counted as “money bills” and subject to an easier passage through Parliament as the Lords can only delay rather than amend them.  There is a broad definition of “money bills”  which includes one “which in the opinion of the Speaker of the House of Commons contains only provisions dealing with … the imposition, repeal, alteration, or regulation of taxation…”  Perhaps someone should have a word with John Bercow?  It seems to me that, were he to declare that in his opinion no measure which produces neither tax, administrative burden saving nor government cost saving was a provision regulating taxation… and therefore no Finance Bill containing such measures could be certified as a money bill…

…well, perhaps he might, at a stroke, become tax personality of the year for his services to simplification of the tax system?

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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!

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Clearing the decks

March 15, 2016

It’s the day before the Budget. You would think that HMRC and the Treasury would have cleared the decks ready for the raft of new measures presumably coming towards us after the speech.

So I was rather surprised when a quick check of the “open consultations” tab on the gov.uk website brought up one outstanding HMRC consultation and four for the treasury.

The HMRC one is mildly interesting: “a consultation on the control of tobacco manufacturing equipment and possible licensing of those involved in the supply chain for tobacco products.” Woah, you might think: we’re going to have licensed tobacconists??? Turns out from reading the consultation document that there are already arrangements in place for tobacconists in Scotland, Wales and Northern Ireland to be registered: the issue for most of us will, I imagine, be how to get an equivalent process in place for England without on the one hand opening up a market in cross border arbitrage and on the other slapping an enormous administrative burden on some relatively marginal small businesses.

The four Treasury ones? The first two: Reforms to the investment bank special administration regime and Insurance linked securities are Letwin consultations. By Letwin consultations I am of course referring to Oliver Letwin’s explanation that the point of consultation isn’t to get “views” but to look for unintended consequences. No-one at the Treasury cares what you or I think about the investment bank special administration regime or about index linked securities. What they want from the consultation is for investment banks, accountancy bodies and major law firms to do some work for them on whether their proposals – whatever they are – work at all, work as intended, and will pass through parliament without annoying lobbying from the industries affected.

I sort of feel that, as this started as a blog looking at consultations, I really ought to read both consultation documents and attempt to form a view whether they are good proposals. I feel, however, that a Letwin consultation is designed to induce somnolence in the general reader, and I just don’t care enough today to even try, sorry.

I will reserve my indignation for the other two Treasury consultations. If you have the time and the inclination, I recommend looking at this one: the proposal to create a National Infrastructure Commission, or at least to put the “shadow” one that has already been set up onto a statutory footing.

This consultation closes on Thursday night (11.45pm 17th March) and asks, in effect, if we think it’s OK that the Treasury sets up a quango – sorry, that’s not politically correct these days, is it? Now we call them “non-departmental public bodies”. The Treasury will set up an NDPB which will produce a National Infrastructure Assessment (NIA) and do we agree that a GDP envelope would provide the most effective fiscal remit for the commission…

Can we imagine the post-war Attlee government setting up the National Health Service like this? The National Health Infrastructure Board would still be holding meetings to decide whether the GDP funding envelope would allow them to start building a hospital at some point in the not too distant future, if the existing providers didn’t mind too much and the government accepted their latest Health Infrastructure Advisory Report…

And the final Treasury consultation? They want to make public sector exit payments “fairer, more modern and more consistent”. In other words, they want to get rid of huge swathes of the civil service and they don’t want to pay the going rate for doing so. What? You thought any of those weasel words meant that they were suggesting consistent or modern fairness to their workers?

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More equal than others

December 8, 2015

How not to do equality impact assessment.

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

Yes, HM Treasury, I’m looking at you.

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

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State of play

September 16, 2015

So there are fourteen open consultations listed as relating to HMRC on the gov.uk website today.  If you filter instead for the “tax and revenue” policy area (all departments) the total comes up as 18 – four from the Treasury.  Query: why are some tax consultations badged from the Treasury and some from HMRC?  Answers on a postcard…

The first is a review of travel and subsistence rules.  It was published under the coalition government, in July 2014, but says that it closes at quarter to midnight on 1st May 2016.  I find this rather improbable, and I wish gov.uk would have a look at it.

You have until 30th September to respond on the taxation of performance linked rewards paid to asset managers, employment intermediaries and tax relief for travel and subsistence, ISA qualifying investments and crowd funding, and the IR35 discussion document

You need to get motoring to respond to the implementation of the Personal Savings Allowance and the deduction of income tax from interest in peer to peer lending which both close on 18th September.  The other handful all have closing dates in October.

But I could have read and perhaps responded to one of them in the time I’ve taken today trying to identify which one to prioritise.  Because apparently listing consultations with a visible closure date and/or in the order in which they close remains beyond the wit of a twenty first century government.  Or, as I said on Facebook yesterday, you’d almost imagine they didn’t want responses from Jo Public.