h1

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.

 

Posted in Bit of politics, Equality | 1 Comment »

h1

Mischief managed

August 21, 2015

Let us put away the metaphor of comparing tax knowledge to wizardry for the moment.  What would a functioning democratic tax system look like?  How would we get from where we are now to where we would like to be?

I can’t remember whether I posted this link before, to an article I wrote in The Conversation, drawing on a piece of academic research I published over the summer.  In it I, rather impertinently, offer some advice to Meg Hillier as she takes over from Margaret Hodge as chair of the PAC.  There are two things I think are essential: first, there has to be some way of including those who don’t speak the language of tax in debates about tax.  And, second, we have to form a collective view of the morality of tax: what is and is not acceptable behaviour by businesses, individuals and their advisors.

Which is all very nice, but where would we start?

Well, if I were Meg Hillier I’d start with a concrete example – say the patent box.  (Other tax measures which annoy different people for different reasons are available).  I’d take the TIIN and look at how much it said the measure would cost.  I’d ask whether the costs and benefits had been reviewed yet.  I would ask, specifically, whether the cost for 2014/15 had in fact been £800 million or some other figure, and what economic benefit had been achieved by giving businesses this tax break.  Can the government provide details of factories built, jobs created and protected, research invested in and proving productive, products in the pipeline or other positive results that flow from this decision to allow businesses to save £800m of tax last year?  I’d want to ask what the final compliance costs to business and to HMRC had turned out to be, and then I’d want a new cost benefit analysis prepared to show whether the measure had been worth doing.  And then I’d want to advise the government that either this was an economically sound decision which – although it looks like corporate welfare – was actually doing the job of boosting the economy.  Or that it wasn’t.  So it ought to be sunsetted (or, in plain English, repealed).

Then I’d make it very clear that my committee would be looking systematically at tax changes, at the cost benefit analysis which validated the decision to introduce them, and at the evidence of whether those analyses had been accurate, and recommending repeal of the ones which weren’t working.

The general public can understand this kind of discussion, surely?  The government said it would change the rules in a way which would save businesses £800 million last year.  Was it actually £800 million?  Or more?  Or less?  And what did we, the rest of the country, get as a result?

Move the conversation into this space, using the tools which are already there in the TIIN and the other supporting documents from the introduction of a measure, and we can all look at the government’s decision making.  And, since sunlight remains the best disinfectant, this would also improve its decision making in future.  (Crosses fingers)

Posted in Bit of politics, TIINs | Tagged , | Leave a Comment »

h1

Dispatches from the Ministry of Magic

August 20, 2015

On August 17th Richard Murphy and Jolyon Maugham published this blog entry headed “Labour needs to take tax seriously”.  (Richard is the accountant behind Tax Research UK and Jolyon is a tax QC).  And of course Labour does: all parties do.  But the passage which interested me was this:

We know that the Labour Party in opposition lacks the technical resource at the disposal of a sitting government. This affects profoundly its ability to make the right interventions and develop sound policy. It also has, to our knowledge, no Parliamentarians with a detailed technical knowledge or who communicate confidently in the field. Vitally, it has no retained advisers who are expert in tax.

Clearly all opposition parties lack the technical resource available to the government, because they do not have the resources of HMRC and the Treasury or another Department at their command.  I am not so confident that Richard and Jolyon are correct in the conclusions they seem to draw from this however: civil servants are required to develop and implement the ideas the government asks of them.  So behind the scenes they might advise ministers they are making, in the words of Sir Humphrey in Yes Minister, a “brave decision” and do their best to point out any pitfalls in what is proposed.  Nevertheless anyone who has worked on a Budget will also have worked on making some mad idea work as well as it can work once the advice to think again has been rejected.

Similarly different civil service cadres may have their own shopping list of pet policy ideas which they try to get into the “Budget possibles” list time and again…. but Ministers decide.  In other words, the development of sound policy does not necessarily require the technical resources of government, and more often than you think governments push forward their policy agendas in the teeth of their own technical advice.

The more interesting, to me, comment is the reference to the Labour party lacking “Parliamentarians with a detailed technical knowledge or who communicate confidently in the field.”  Yes; look at any Hansard report of a “debate” on any Finance Bill and you will see the level of discussion is absurdly poor.  I have long wondered why this is the case, particularly as the last few years of my own Revenue career were devoted to producing the documents which would allow parliamentarians to debate the proposals they were being asked to implement on a level playing field with Ministers.

The whole purpose of the “better regulation” agenda is to produce fewer, better regulatory burdens on business by requiring policy makers to consult before their introduction and publish cost/benefit analysis to enable a considered decision to be made of whether a regulation is proportionate and effective.  Tax has never quite fitted into this framework (is a tax also a regulation?  discuss, using both sides of the paper) but the “new approach to tax policy making” comes from a better regulation perspective.  In other words, when MPs debate tax changes, they have available to them background documents which should set out, in plain English, why the change is desirable, what it is designed to achieve, how much it will cost or raise in tax and how much it will cost to administer and collect.  If they cannot achieve a reasoned debate under those circumstances, then perhaps a “detailed technical knowledge” isn’t going to help much either?

To me, the real question is at heart the one I have posed in this blog time and again.  How are we to include the tax muggles in the tax conversation?  It is of little use to say that one side of the debate has more tax wizards than the other.  The analogy is a good one, I think.  If detailed technical knowledge of tax is considered as an arcane magical power (almost as if, like Rowling’s magic, some people are just born with it but they are all trained in the same schools) then the question isn’t whether Dumbledore or Voldemort will prevail.  (You may, of course, see the Dark Arts emanating from whichever party you prefer!)

Imagine for a moment that Rowling’s magic were real.  Would we, the muggle world, sit by and let Dumbledore and Voldemort’s forces duke it out and be grateful we weren’t involved?  Or would we, more likely, look for ways to uncover, understand, and neutralise the lot of them?

Nuke Hogsmeade?

The reaction of tax experts to (for example) tax justice campaigns seems to me to exist on that sort of level, as if the proposal weren’t to put trade unionists and civil society representatives on the Board of HMRC but to nuke the entire tax profession.

I wish Richard and Jolyon well with their suggestion that the Labour Party should take on some retained advisers who are expert in tax.  (I imagine they might want to apply for the posts: I know I would!)  But the real question to me is, how are we to involve the people who don’t understand tax but nevertheless have to pay it, and who depend on its collection to pay for services.  In my view, that’s where the tax conversation needs to go next.

Posted in Bit of politics, Tax Justice | 1 Comment »

h1

Democracy. And money.

August 13, 2015

Many years ago – we had a New Labour government at the time, so you can tell it was a geological age ago – there was a requirement in government to “think small first”.  A lot of work was done to embed thinking about the very smallest businesses before governments made changes to regulations, and, in particular, government departments were told in no uncertain terms to think about impacts on small and micro businesses from the businesses’ point of view.

So, no, calling a meeting in London, in office hours, wasn’t going to capture the views of the one-person business in York or Newcastle.  A one person business has to shut down if the one person is travelling to London for a day, and a day spent talking to civil servants is a day spent NOT earning profits.  When we were introducing the CIS scheme for example I made sure we held public meetings outside London and remember being surprised that the people at the meeting in Llandudno weren’t *grateful* that we’d come out of London to talk to them, but *resentful* that we weren’t meeting in Bangor and Wrexham and they’d had to travel what seemed to them unreasonable distances to hear us.

Fast forward through the coalition years and here we are with, yes, VAT MOSS again.  The EU got it wrong.  The UK government got it wrong.  As I have detailed ad nauseam there were impacts on the very smallest businesses from the changes to the VAT place of supply rules for electronic businesses which threaten their entire viability.  A group of micro business owners have been tirelessly campaigning on the issue and have, finally, got the EU to the point where they will at least actually talk to them.

So here’s the thing.  Not only are they taking time out of their own profit-seeking ventures to act on behalf of themselves and others in a similar position.  No, they’re actually having to pay their own travel costs as well.  So there’s a meeting in Dublin where they need to persuade all 28 EU finance ministries of the strength of their case.  They need three grand to get there.  Read Juliet McKenna’s account of the issues here.  And then go to their crowd funding page here and open your wallet, please.

I’d like to address a special plea to the tax profession here.  We’ve failed them.  We’ve failed to take account of these businesses because they’re too small to pay professional fees.  So they haven’t had a voice in the usual “stakeholder” consultation machinery.  No-one in the profession has been arguing their corner, no-one has reminded HMRC of their existence except when they’ve stood up and argued for themselves.  We owe them.  I’m astonished HMRC hasn’t offered them the funds they have (or at least that they used to have) specifically for this kind of stakeholder.  I’m surprised Taxation or Tax Journal haven’t offered them sponsorship.  And I’m disappointed none of the professional firms has offered to give them some help.

So.  Wallets out, please.  They only want three grand.  Renew my faith in the tax profession’s sense of fair play and let’s see them fully funded by lunchtime, shall we???

 

 

 

 

 

UPDATE: Well, I had a late and leisurely lunch today but, YES!  they raised their three grand by the time I came back, so kudos to everyone who contributed.  It turns out, however, that the modest target of three grand only covers some historical costs and the cost of ONE person going to Dublin.  Now, I ask you, would YOUR organisation send only ONE person to lobby the EU?  Would you be happy going on your own to talk to 28 European finance ministries?  Self-evidently they need to be able to send a delegation, so don’t hold back on donating further so that more than one person can go.  As Saint Sir Bob memorably didn’t say, give ’em your ****ing money!

Posted in Bit of politics, HMRC | Tagged | 1 Comment »

h1

Sheffield Bus Partnership

July 30, 2015

No, I’d never heard of it either, and I actually live in Sheffield.  But I noticed a pale sign on the bus that read

NETWORK CONSULTATION

We’re improving Sheffield’s bus services.

Tell us what you think about our proposed new network in our public consultation from

6 July to

31 July 2015

Travelsouthyorkshire.com/sbp

Now, let’s take a moment to spot the weasels in that notice.  First of all, it was a pale blue notice with no graphics of any kind on it; nothing designed to catch the eye.  The text was white on blue, but the dates of the consultation were black and I had to look twice to see them.  The whole thing might as well have said “nothing interesting to look at here: move along please”

And we’re “improving” Sheffield’s bus services: so no need to worry your pretty little heads about it?

Tell us what you think about a “proposed new network”: sounds like something boring and bureaucratic that doesn’t have anything to do with you, probably.

Travelsouthyorkshire.com/sbp – not even a “for more details go to…”, just the web address.  Which, I might point out, is hardly helpful to people without net access.  Who tend to be older, poorer, less well educated than the average of the population.  (And, if we are to believe the ageist and classist quote, might align with the bus user demographic, if it’s really true that “A man who, beyond the age of 26, finds himself on a bus can count himself as a failure” attributed to Thatcher  Speaking as a regular bus user myself, I don’t think so…)  But my point is that the consultation itself is unlikely to reach the very people on whom it might have an impact.

Note also that the consultation is open for less than a month, and that Sheffield University’s 2014-15 session ended on 13th June – so all the students, another big bus user demographic, had already gone home.

Right then: let’s have a look at the actual consultation.

First thing to notice? Well, there are face to face drop in sessions – definitely following best practice there – but how is anyone supposed to know about them?

Secondly… well, where IS the consultation?  There isn’t a consultation document that I can find – nothing with a summary explaining what the rationale for change is, what changes are being proposed and what will be the likely impact.  Instead there are two leaflets; one for the north of the city and one for the south – what if your bus journey crosses this imaginary boundary?

Let’s have a look at the north first.

Your views are important and will be used to help us make sure the network offers the best travel options for the people in the city before it is introduced at the end of October 2015

OK, what’s wrong with that sentence?  If our views are important, why are they being sought only to confirm the changes before they are introduced? Isn’t best practice in consultation to consult only on things which you have the capacity to change?  If everyone emails in today saying these plans are awful, is there the capacity to pause the implementation date and re-think the plans?

Then there’s a map.  I can’t read it online (it’s either too small to pick out any of the detail, or else too detailed to pick out the overall picture.)

Then there is a table of individual route numbers and a brief note about the changes made to each.

The document for the south is identical: same rubric, different map, different table; full of helpful details like

20 Hemsworth – Norton Lees – Heeley – Lowfields – Sheffield – Burngreave – Northern General – Southey Green – Parson Cross – Ecclesfield: Revised route replacing 97/98 between City centre and Ecclesfield

20A 9A,18,20 See route details for 9A, 18, 20 — — — Service replaced by 9A/18/20

There is no overall document, no explanation of the rationale for the changes and their impacts.

How do you respond to the consultation?  The ONLY method offered is to complete a form, either online or on paper.  I had a look at the form.  Here it is.  Go on, have a look.  Now, I’m a better regulation specialist, and in my professional opinion that is NOT a consultation response document: it’s a consumer survey.

3.4 How much would you be willing to pay for a multi-operator ticket allowing you to use all buses?

Nothing
5% more
10% more

(Yes, London friends, I know you manage to have an Oyster Card system you can use on buses and local trains and trams, and there are a billion journeys.  We in the sticks have two rival bus and tram companies who can’t manage to share ticketing revenue from, er, quite a lot less)

On a purely selfish basis I won’t be responding, as the only bus which I regularly use is “service unchanged”, and I don’t respond to marketing surveys.

But as an example of How Not To Do A Consultation?  I think I’ll be referring back to this quite a lot.

Posted in Consultation | Tagged , | 1 Comment »

h1

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…

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

h1

Have your say…?

July 22, 2015

“Have your say on the Finance Bill” is the headline on the Parliament website.  The Finance Bill went through its first and second readings in the Commons and is now to be scrutinised by the House of Commons Public Bill Committee.  Question for scholars: does anyone have an example of a Finance Bill being amended as a result of a submission to the scrutiny committee by a member of the public?

Posted in Uncategorized | Tagged , , | Leave a Comment »

h1

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.

 

 

Posted in Equality, HMRC, TIINs | Leave a Comment »

h1

Schadenfreude

July 16, 2015

I shouldn’t laugh, but I used to be the person in charge of project managing and proof-reading OOTLAR (the Overview of Tax Legislation and Rates) document.  I took voluntary redundancy, which of course implies that the post was abolished.  I’m not suggesting this means that no-one proof read OOTLAR for the Summer Budget but I had to laugh when I got to page 102 and found the fonts starting to wander.  The second paragraph of the impact on business for the reform of Vehicle Excise Duty is clearly in a different font than the rest of the document.  While I can’t of course say what happens inside 100 Parliament Street now, in my day that kind of error would have meant a last minute change to the document by the Treasury (because of course you couldn’t have HMRC and HMT – in the same building – being on the same computer system) .

What other last minute changes can we infer?  Well there’s a heinous page break at Insurance Premium Tax (pages 104-105) where the table of impacts loses its first two rows and becomes hard to read, and, oh look, there are the small and micro business impact and the monitoring and evaluation sections in the different font again.

My favourite one, though, is the table of impacts for the Simplification of HMRC debtor and creditor interest rates at pages 121-122 where the impacts are not quite blank but certainly empty of meaningful content.  Robust estimates of the exchequer impact are not available.  The measure is not expected to have any economic impacts.  There is no impact on individuals, households or families.  There are no equality impacts and a negligible impact on businesses and civil society organisations, no operational impact on HMRC and no other impacts.  Well why the bloody hell are you doing it in the first place then???  The point of a TIIN is supposed to be to explain what you are doing, why you are doing it at all, and why you are doing it in this particular way.  The policy rationale for this particular change is given in this lovely paragraph:

The measure ensures that rates of interest payable on tax-related debts to which HMRC is a party are all contained within tax legislation.  It also reduces the rates of interest on tax-related judgement debts owed by or to HMRC to an appropriate level given prevailing interest rates.

To which I respond: WFT?

(No, seriously, if you know why they introduced this one at all, please enlighten me in the comments!)

 

Posted in TIINs | Tagged | 5 Comments »

h1

What it says on the TIIN (which never gets old, seriously)

July 8, 2015

I won’t say that calling them TIINs was motivated by the line, but I do remember we were talking for a while about what to call the new document that combined the newly-invented Tax Impact Assessment with the now obsolete Budget Notes, and someone’s joke about doing what it says on the TIIN came around the time we lighted on TIIN.

But if you found your way here after seeing my piece about TIINs in this week’s Taxation, can I also draw your attention to this entry, where I published the internal Treasury and HMRC instructions on preparation of TIINs after obtaining them via an FoI request?

At this point I usually say something scathing about the way the 64 pages of instructions on how to prepare and produce an Impact Assessment are in the public domain and isn’t it interesting/annoying/suspicious that the instructions on how to prepare a TIIN which performs the same function for tax changes are hidden from view.  Except suddenly I can’t find the instructions on how to prepare impact assessments any more either.  Have they just been quietly downgraded on the gov.uk site or is it my google-fu that’s letting me down?  But whatever the case, why can’t I find the old instructions on the National Archive site either?  <puts on tinfoil hat, retreats to bunker>

Posted in TIINs | Leave a Comment »

« Newer Entries
Older Entries »