It’s Plough Monday, the start of the new working year (the first Monday after Twelfth Night and Epiphany). So here’s a nice piece of intellectual work for you, a research question: how much does it cost to pass a piece of legislation?
No, not the cost of administering the law after it has passed or preparing it before it is presented to Parliament. How much does it cost to print and promulgate a Bill, to give it a First Reading, to discuss it in the House of Commons, to call a vote, to discuss it in the House of Lords… how much does the parliamentary process cost, and then how much does it cost to, what, courier it over to the Queen for her to sign? (How does that part actually work?)
What I am getting at is, this is a fixed cost which doesn’t seem to me to have been factored into the impact assessment process.
An impact assessment – for tax, a TIIN – should tell you how much a piece of legislation will raise in taxes or cost in tax foregone, and how much administrative burden it will impose or relieve for those it impacts, and how much it will cost or save the administering department.
What it won’t tell you is that base cost of passing the legislation in the first place.
Why should we care?
Well, there are several measures in the latest OOTLAR where the TIIN shows no cost or benefit to the general population, the taxpayer or the department, and that the impact is on only a handful of businesses.
For example, Income Tax: Venture Capital Schemes: relevant investments (page 69 of OOTLAR) says it will affect “a maximum of 100 individual investors” and “fewer than five companies have been affected by the provisions since November 2015”.
I understand that, following the Wilkinson case, there was a change in HMRC and the Treasury’s approach to extra-statutory concessions, so that a number of useful but trivial exceptions from strict application of tax law have either been lost or have been legislated.
It seems to me, though, that HMRC ought to have a base figure for the cost of the legislative process (divide the annual cost of running the Houses of Parliament by the average number of days it takes to pass a piece of legislation, say?) and a clear power to set and promulgate extra statutory concessions where certain rules are met.
What kind of rules? What about the total costs and benefits of the change are smaller than the cost of passing a piece of legislation? Perhaps an overall limit of one (two? five?) ESCs a year so that they don’t become an easy way out of messing up your drafting in the first place? Perhaps a “one in/one out” rule so that they don’t become another overcomplicating factor (three pages of tax legislation accompanied by a thousand pages of ESCs is an undesirable an outcome as a thousand and three pages of tax legislation, after all). Perhaps an “affects no more than x number of people/businesses, impacts of no more than y cost on any one business” rule?
But in any event: more options appraisal, less legislation, more ESCs.
What do we think?
tiintax 