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Trackless wastes

August 1, 2012

Yes, I know I wrote on Monday about the Tax Tracker and yes, I know they published another iteration of the tracker ON Monday, sigh.

Turns out I missed one, anyway – there’s a formal consultation due “in the summer” on “Life insurance policies: time apportionment reductions”.

I had another look at the list of consultation closing dates over the summer and the only alteration I could find was the addition of:

Closes 22 October: The attribution of gains to members of closely controlled non-resident companies

I note in passing that there’s a remarkable number of “informal” and/or “technical” consultations, which I take to be officialese for “yes, I know we said we’d consult on tax changes, but we don’t want your opinions, peasants; we just want to talk to knowledgeable tax specialists who will Understand.”

You think I’m exaggerating?

I obtained some internal HMRC correspondence under an FoI request which contained amongst other things the interesting news that my response to the consultation on the proposals to add a top up to Gift Aid “is of rather poor quality”.  While the ex-Civil Servant in me finds this extremely funny, the Angry Citizen in me finds this… less so.

Because what are we consulting for, please?  I mean, if all that is wanted is to crowd-source the bread and butter work of policy making – to save the government money by getting rid of civil servants so that instead the government can rely on the tax and legal professions and interested industry bodies to do the tedious work of updating and checking legislation for them, well then, yes: my response on the Gift Aid consultation was, indeed of “rather poor quality”.

Because I didn’t do that.  I didn’t try to do the job of the policy team for them and work out any kinks in their proposals.  Because, you know, I used to do that kind of thing for a living and I’d be a scab if I now started doing it for free!

What I did try to do, was to give my response as a citizen to a proposal which will affect me, as a citizen, a taxpayer and as a person who gives to charity.  The fact that I thought it was a misconceived proposal should have been a useful datum.  I’m not saying it should in any way be decisive; but it should be part of the picture.

And any other citizen who chooses to comment on the workings of government and the development of policy ought also to be able to feel that their contribution is taken on board as part of the picture.  It’s government of the people, by the people, for the people; not GCSE civics.

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Use the mike

July 31, 2012

Yesterday I went to Sheffield station to buy some railway tickets.  My mother is deaf, so she doesn’t like to transact on the phone, and she’s in her eighties, so she’s not comfortable transacting on the internet.  So we jumped in a cab and went down to the station so she could renew her senior railcard and buy the tickets for us both to go down to London next month to see the Queen’s Diamonds.

There’s a sound system in place, so when we finally made it to the counter she set her hearing aid to the T setting and was able to hear the clerk (although she couldn’t, then, hear me, standing next to her, and had to switch back and forth).  But after she’d done the railcard transaction and we’d selected the dates and times we wanted to travel, the clerk told us the price.

“Sorry, I’m not hearing you,” I said.  The clerk gave me That Look – you know the one.  The “are you stupid or something” look.  And repeated what she’d said, at exactly the same volume.  Just move the mike, I thought – I could hear the guy at the next counter, perfectly loud and clear, because he had the mike an inch from his mouth and the volume turned up.  But this lady obviously didn’t think using the mike was necessary.  “Sorry, I still can’t hear you,” I said, and again got The Look and another repetition, this time with an eyeroll.  My mother, being of the “don’t make a fuss” generation, simply put her credit card into the machine, paid the amount we couldn’t decipher, and we checked it all later.  No big deal, right?

Well, have you ever tried to get your employer to make a reasonable adjustment to your working conditions on account of a disability covered by the Equality Act?  If the simple action of getting someone to use correctly the equipment that’s already there is a problem, imagine what it would be like trying to educate your employer on what their duties are and your reasonable requirements might be, while you were feeling ill in the first place.  I’m exaggerating?  I’ve just written and then deleted (because they aren’t my stories) a paragraph detailing three different examples I know of from my personal acquaintance of people who have had grotesque difficulties getting different employers to abide by the law in the last year; partly because, when you’re ill, you’re not really in a good place to provide a teachable moment to your employer in the first place, let alone the assertiveness to insist they comply with the law that’s in place for your protection.  It’s easier to be quiet, don’t make a fuss, make do.

Living with a disability must be hard.  Working with a disability is hard enough when you acquire the disability after you acquire the job, are a valuable source of knowledge and ability for your employer, and know and exercise your rights.

Well, what about Remploy, the business that employs workers with disabilities in an inclusive environment?  Oh, yea, being shut down.  Because, apparently, there are better ways of supporting people with disabilities in mainstream employment.

OK.  But what IS that support?  Well, if you were watching anything except the Olympics last night, you’d have seen either the Dispatches programme: Britain on the Sick or the Panorama programme, Disabled or Faking It?  Both programmes showed DWP film of people who had been prosecuted for faking disabilities but reminded us that this amounts to less than half a per cent of the people actually claiming disability allowances.  The real problem identified by both programmes was the mechanism the government has put in place to assess whether people needed to be “on the sick” or were “fit for work”.  Dispatches concentrated on ATOS and secretly filmed a GP taking the ATOS assessors’ training.  Panorama concentrated on the claimants – including the gentleman found fit for work while he was sectioned under the Mental Health Act!  Lucy Mangan spoke for me and, I believe, for millions watching, when she wrote in the Guardian:

‘Why don’t you just stop it,” you wanted to say. “Just stop doing this cruel, pointless, terrible thing to people. Stop adding to the sum of human misery in the world and start working for our betterment instead.”

Because it was all about finding people were capable of work – if they had one finger they could push a button, if they could sit or stand they could work a checkout, if they could theoretically propel themselves in a wheelchair they were mobile, even if they didn’t actually have a wheelchair.  And while I see the government’s argument that it’s better to think about what people can do rather than what they can’t do, none of this amounts to a hill of beans if there isn’t a job for them to move into, an employer willing to take on a one-fingered, invisible-wheelchair-using person.
One final thought.  Chris Grayling said that “there are no targets anywhere in the system“.  In other words, ATOS don’t have a fixed target of people to find fit for work (or, unfit for financial support).  This is a pusillanimous equivocation.  There may not be a “target” – find 12% of them fit for work or we sack you.  But there is an “average“: the average number of people found fit for work is 12% and if you’re outside of the average you’ll be audited.  And then look at table 1 on page 36 of the 2010 Budget Costings document which shows the expected exchequer impact of “reforming (sic) disability living allowance”.   Next year we’re taking £360 million from sick people and, the year after, £1,075 million.
Well, not in my name.  If this makes you, too, into an #angrycitizen, take a few moments to sign the epetition here.  And write to your MP.

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Diary time

July 30, 2012

No, not a post advocating the reintroduction of the Milk Marketing Board – that would be dairy time (although, incidentally, I do wonder why the farmers don’t join together and form local cooperatives and sell their own milk…)

No, no – today is just a quick run round the latest tax tracker which was published last Friday.  And, oh look, remember those consultations “to be published” in May, and then June, and then July?  Well we’re now down to a mere seven which are to be published “in the summer” (or even “in the autumn”), and only three of those are “formal”, ie will come with a consultation document open to all of us, and (one hopes) a TIIN showing the costs and benefits.

They are:

  • Personal Independence Payments: trusts for vulnerable people
  • VAT: exemption for education providers, and
  • Integrating the operation of income tax and National Insurance contributions

Because none of those sounds at all controversial or difficult, right???

Also, I have written before about the frustrations of trying to work with the Direct Gov consultation website and its multiple links to departmental pages, and the frustration of finding the Treasury consultation page gives an unsortable PDF rather than something that’s usable – although there’s a fuller list on the web page, in order of publication.  Well, here, for your diary, is a list of the tax consultations which are open over the summer in what I hope is a more useful format, ie in the order in which the consultation closes!!!  Because, complaining apart, the slow-motion car-crash that was the last budget does at least have the saving grace of being subject to consultation before it gets enshrined in law.  So don’t miss the consultation you’re interested in because you were on holiday when the consultation closed!

16 Aug Consultation into the Taxation of Controlling Persons (HMRC led)
16 Aug Withdrawing a notice to file a self-assessment form (HMRC led)
20 Aug Taxations of unauthorised unit trusts (HMRC led)
23 Aug Ensuring fair taxation for residential property transactions
30 Aug Consultation on a disincorporation relief
6 Sep Securing compliance with Real Time Informaton (RTI) (HMRC led)
6 Sep Life insurance: Qualifying Policies (HMRC led)
10 Sep Corporation tax reliefs for the creative sector
13 Sep Statutory residence test/ ordinary residence/ statement of practice 1/09 Disclosure of tax avoidance
14 Sep General anti-abuse rule (GAAR) consultation (HMRC led)
18 Sep Enterprise Management Incentives: extending access for academic employees (HMRC led)
18 Sep Office of Tax Simplification’s report on tax advantaged employee share schemes (HMRC led)
1 Oct Decommissioning Relief Deeds: Increasing tax certainty for oil and gas investment in the UK Continental Shelf
5 Oct Use of rebated fuel for gritting activities in rural areas (HMRC led)
5 Oct Delivering a cap on income tax relief: a technical consultation
5 Oct Inheritance tax: simplifying charges on trusts (HMRC led)
9 Oct Stamp duty land tax: sub sales (HMRC led)
15 Oct Foreign currency assets and chargeable gains (HMRC led)
15 Oct Lifting the lid on Tax Avoidance Schemes (HMRC led)
17 Oct VAT treatment of small cable-based transport (HMRC led)

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Red RAG

July 27, 2012

So there’s this thing called a “capability review”.  You get someone external, neutral and dispassionate to review a government department – and, in particular, its management – and assess its capability.  Could it cope with a crisis?  Could it react appropriately to change?  Does it have the confidence of its staff?  Does it have the confidence of its Ministers and of the general public who pay its wages?

It happened three times.  Once in 2006-7, once again in 2008-9… and now the third and final round, covering 2011-12.  (No, I don’t know what happened to 2010 either.) But the Institute for Government have crunched the numbers and raised some interesting questions about the answers.

Because, oh look, this is going to be the last time we do capability reviews (because Gus O’Donnell, who invented them, has retired now?)   And, oh look again, we had someone external doing the first two but the last one was based wholly on self-assessment.  And, knock me down with a feather, it turns out that not one department awards itself a “red” rating on the red/amber/green “RAG” rating system – where green is “strong”, amber is either “well placed” (amber/green), “development” needed (plain amber) or “urgent development” needed (amber/red), and red is “serious concerns”.

Yes, not one department has serious concerns about its own capability. Excellent news?  Or more a case of, altogether now, “well, they would say that, wouldn’t they?”  (Note in passing the first comment on this report of the results, suggesting that DECC’s apparently poor performance might correlate to their being the only department to use an external assessor this time around)

So what of HMRC?

After the MoJ they showed the most improved score in the third round.  They reported a clear green for “build capacity/develop people” and “collaborate and build common purpose” while achieving the lowest score across Whitehall in the separate staff survey.  In other words… the senior management thinks it’s doing marvellously, and its staff and customers beg to differ.  Its action plan, though, tells us that the external assurance was provided by the non-execs on the Board:

The Board has been very involved in this Capability Review, with all non-executive directors playing an assurance role throughout the process. We provided challenge during the review and support the final report and scores.

Oh, these guys??? Well that’s all right then! {sarcasm mode off}

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Have I got news for you? (Well, have I?)

July 23, 2012

There’s been some very poor reporting of the speech David Gauke made this morning at the Policy Exchange – “cowboy” tax advisers will be forced to “name and shame” their clients, for example.  No they won’t, and, don’t be daft.  Some journalists need to do some research that doesn’t involve google once in a while.

The speech itself is interesting, though, in part because the Minister has a go at what’s acceptable and what isn’t in terms of tax planning:

Legitimate use of reliefs is not tax avoidance:

Claiming capital reliefs on investment is not tax avoidance – when those reliefs were introduced precisely to encourage the investment in question.

Claiming reliefs against double taxation is not tax avoidance – when the alternative would be taxpayers paying tax twice on the same income.

Claiming back tax on legitimate charitable donations is not tax avoidance – any more than ticking the ‘gift aid’ box is.

Not paying tax on your pension contributions is not tax avoidance.

Taking out a tax free ISA is not tax avoidance.

Quite.  (Although you then ask yourself why we then had the ill-conceived consultation on capping charitable tax reliefs…???)  

Buying a house for personal use through a corporate entity to avoid SDLT is avoidance.

Channelling money backwards and forwards through complex networks for no commercial reason but to minimise tax is avoidance.

Paying loans in lieu of salaries through shell companies is avoidance.

And using artificial ‘losses’ deliberately accrued to claim back tax is avoidance.

To which we say “yes!!!!” (And, when are you going to give HMRC the resources to do something about it??)

Where, though, do we find the announcement that leads to the “name and shame” the “cowboys” headlines?  Well, a consultation IS announced:

Today we consult on ways to improve the information available to the public on avoidance.  Publishing warnings for all to see, and making it easier for taxpayers to see if their adviser has promoted failed avoidance schemes in the past.

(which, you will note, suggests that it’s information about advisers that might be made public, not about their clients)

Let us turn, then, to the Tax Updates and Consultation Tracker helpfully provided by HM Treasury, which lists as To Be Published in July a consultation on “Disclosure of tax avoidance schemes (DOTAS)” Hmmm…. the accompanying PDF helpfully elucidates that this will be

Consultation on extending the DOTAS hallmarks so as to capture avoidance schemes that do not currently have to be notified.

Because, as anyone who works in tax would already know, there is already a regime which says that, if you’re going to market an avoidance scheme, you have to tell HMRC about it.  You have to give it a reference number, and you have to tell the people who buy the scheme from you what the reference number is, and they have to include the reference number on their returns.  Avoidance, not evasion, remember?  These are people who are trying to outsmart the taxman, not hide from him.

So have I got news for you?  Or, to put it another way, is this consultation “news” at all?

Well we don’t know what it’s going to say yet, do we.*

But…

Well…

Look at the briefing note which the Law Society produces for its members, telling them what their responsibilities are if they are the promoters of a scheme and reassuring them that they aren’t going to be asked to violate their professional ethics by disclosing privileged information and they aren’t going to be caught by the legislation if they simply give advice to their clients on a scheme that someone else is promoting.

And turn to section 9, “more information”, and the list of legislation on disclosure of tax schemes.  There are thirty two of them.  So far. Including

I seem to recall that David Gauke said, in the foreword to Tax Policy Making: A New Approach that

Business and tax professionals have previously criticised the tax policy making process as piecemeal and reactive, pointing to the wide range of policy announcements in recent years that have been unexpected and insufficiently thought through.

We could discuss whether this vast train of DOTAS legislation is the result of “piecemeal” policy development that hasn’t been sufficiently “thought through”, or is a sensible use of an iterative approach.  Or we could just say that it’s the tax authorities and the tax avoiders playing whack-a-mole.

As the Minister himself said in his speech today:

There are some who might say that consultation documents on tax administration are often an effective cure for insomnia, but this is one consultation that will keep the promoters of aggressive tax avoidance schemes awake at night.

Um… are you sure, Minister?

 

[*Update: not twenty minutes after I’d posted this, I saw in my twitter feed a tweet from Tax Journal which had a link to the consultation itself.  So we DO know what it says.  But – having read through it – I’m afraid the rest of this still stands.  Sorry and all that.  Oh, and could someone from the Treasury please explain why they bother having a tax consultations tracker at all if it isn’t up to date, please?  Thanks!]

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Response on behalf of Mark Prisk. Sort of.

July 20, 2012

You may remember that, on 26 June, I published an Open Letter To Mark Prisk about the small firms impact test, in which I wondered whether he actually knew that such a thing existed, and that he was the Minister responsible for it.  I suggested that he ask his officials to arrange for him to sit in on the next SFIT focus group that was organised, and that he might find it was a long time in coming.

Because I thought it was only polite, as well as publishing it as an open letter I also sent him a copy via his Department, BIS, the Department for Business, Innovation and Skills.  Here is the reply I received yesterday

Dear Ms Bradley

Thank you for your e-mail of 26 June to Mark Prisk about Impact Assessments and the Small Firms Impact Test. I have been asked to reply and I apologise for the delaying in replying to you.

I was very interested to read your perspectives on the SFIT – and indeed other aspects of regulatory and tax appraisal mentioned on your website. As you will be aware from your previous career, assessing the impact of new regulatory proposals on small firms is not straightforward, and we are always looking to improve our approach both domestically and in the EU. I am sure that the independent scrutiny of IAs through the Regulatory Policy Committee should in the medium term help drive up the quality of appraisal. We are of course always interested in new research or initiatives in this area that would be helpful in improving how things work in the future.

You’ll also be aware that aside from appraisal the Government has taken a number of other actions to minimise new regulatory burdens on small business, including the micro-business moratorium and parallel initiatives at the EU level.

Many thanks again for your email. I hope the new novel is also making good progress.

Yours Sincerely

Well, let’s look at the work of the Regulatory Policy Committee for a moment then.  Their latest report (which covers the calendar year 2011) is published here (although you may find that the link on their website doesn’t actually work but you can get at it via google).  And a quick word search of the document (no, I’m not claiming to have speed read all 63 pages, sorry) finds no entries for the terms “small firms impact”, “small firms” or “SFIT”.  The RPC’s own website explains that

The RPC assesses impact assessments against well established guidance set out by the BRE IA Guidance, IA Toolkit, One-in, One-out Methodology, and HM Treasury’s Green Book.

and we all know that the SFIT – the small firms impact test – is a mandatory part of the “well established guidance” – you can find it in the IA toolkit, with a link to the BIS page here.

Does the RPC think that checking whether impact assessments contain a reasonable assessment of the impact on small firms is part of their remit?  I’d be interested to know.

 

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Self defence?

July 19, 2012

I am grateful to Ian Brownhill for his article on the Justice Gap blog with the news that the government is changing what happens if you are accused of a crime.  From this autumn, if you are accused and found innocent, you will no longer be able to claim reasonable costs of your defence but only an amount equivalent to the amount which would have been paid out if you’d been on legal aid.  So no fancy forensic work and no high profile barrister and you might at some point have to make a Sophie’s Choice between keeping your house and keeping out of prison.

Where does this come from?  The legislation is in The Costs in Criminal Cases (General)(Amendment) Regulations 2012.  So, yes, I thought I’d have a look for the impact assessment.  And, no, there isn’t one.  This is what the Explanatory Memorandum says:

10.1 The impact on business, charities or voluntary bodies was set out in the final Impact Assessment that was published with the Legal Aid, Sentencing and Punishment of Offenders Act 2012 which can be found at www.justice.gov.uk/downloads/legislation/bills-acts/legal-aid-sentencing/ia-central- funds.pdf

OK, so there’s no impact assessment for this particular statutory instrument, but the impacts were taken into account in the IA for the enabling legislation.

Let’s look there, then.

What is the problem under consideration?  Why is government intervention necessary? Individuals who are found not guilty (or acquitted) in criminal cases and who have paid privately for their defence may have their expenses reimbursed, including legal costs, from central funds.  The central funds budget is a Ministry of Justice budget.  The problem under consideration is that central funds spending has exceeded its set budget, which cannot be extended because of the Government’s fiscal deficit reduction objectives.  Government intervention is required to maintain central funds within budget.

All right, that’s plain enough.  There’s no more money.  The budget is fixed.  The problem is how to stay within a fixed budget with a fluctuating and presumably increasing set of costs.

The impact assessment should then go on to consider the options available to meet that objective. (para 58 of the IA toolkit:)

it is Government policy to regulate only as a last resort, having demonstrated that satisfactory outcomes cannot be achieved by alternatives, self-regulatory or non- regulatory approaches. These options should be considered during this step.

What do we think?  “The government should give them more money” is one obvious option that’s ruled out by the way the question is framed; what we’re looking at is ways to stay within the set budget limit.  Well what about using money that we get from elsewhere?  Fines and penalties, for example?  There was a spare 59.5 million from the Barclays fine that was only going to be used to lower the fees the other bankers paid for self-regulation, as I recall – couldn’t we use that?

The impact assessment doesn’t contain any options other than cap the fees or do nothing.  Hmmmm.

It also suggests that the amount to be raised by making the change is about fifty million a year – hey, Barclays could pay for this year and we could set a higher budget next year?  No??  Just a thought!

Legal Aid Clients and Providers: An estimated loss of up to £50m in nominal cash from central funds payments. £10m of this is from companies being excluded from central funds on the basis that they might be able to buy insurance. £40m is from paying only legal aid remuneration rates. The burden would be shared between providers and clients depending on whether clients choose to pay their provider over and above legal aid rates.

All right then – this is the important bit.  The change means that companies can’t claim back their expenses any more but are expected to have (or obtain) insurance, which saves around £10m a year.  The remaining £40m is shared between providers and clients.  Track that thought, it’s important.

Because impact assessments are all about the impact on businesses.  The theory is that if the state makes you and me fill in a form on a Sunday afternoon, well, we’re annoyed but we haven’t lost anything financially.  But if the state makes a business fill in a particular form, then – the theory goes – the business has suffered an “administrative burden” – has been forced to pay someone to spend some time doing something that doesn’t earn them profits.

And that’s why impact assessments are all about the costs and benefits to business – you and I, as citizens, may think that it’s unconscionable that we wouldn’t be reimbursed our legal fees were we to be falsely accused of something but, in Impact Assessment terms, that doesn’t matter.  What does matter here, I think, is that the government hasn’t followed its own rules.

Part of the impact assessment, as I’ve said before, is to look at the impact on small businesses.

Now, it says clearly that the burden of this change will fall on both “clients and providers” – both the people wrongly accused and the people who defend them.  The people who defend them who might be solicitors or barristers, in small or large firms.

Because what is a “small firm” for the purposes of the small firms impact test?  It’s a firm with fewer than 20 employees.  Not partners, not members; employees.

How many solicitors are in small firms within that definition?  I don’t know, but I’d suspect a large number.  How many barristers?  I don’t know, but I’d suspect nearly all of them.  And the government has made this regulatory change without taking that into consideration.

Look at clauses 56-60 on the impact assessment for the main legislation.  Most of it is about the removal of repayment provisions for companies accused of wrongdoing: the only consideration of small firms who are legal services providers is in paragraph 60:

Small firms which are legal services providers may be affected by these proposals if their income and/or levels of business is lower in future.

Well big hairy woo – how many of them might be affected and in what way?  We don’t know and we don’t care, seemingly.  But look again at the explanatory memorandum to the actual SI making the change:

11. Regulating small business

11.1 The legislation does not apply to small business.

I put it to you that this is nonsense.  The statutory instrument fixes “the amount to be paid to the accused”: how many wrongly accused people are also small business owners (one man or “micro businesses” in the jargon)?  We don’t know, and MoJ doesn’t care.  How much of the impact of this change will affect legal services providers who are also small businesses?  Again, we don’t know, and MoJ doesn’t care.

Yes, I agree, I’m finding a piece of legislation I don’t like and trying to find a way of overturning it on a technicality.  But for heaven’s sake, the government makes these rules to regulate its own conduct, because it knows that some of its members and servants think it appropriate to say “Yes, Minister” when they ought to be saying “are you sure, Minister?”

One final thought.  I had a not tremendously helpful response from BIS to my Open Letter to Mark Prisk on the subject of the small firms impact test.  It tells me that “independent scrutiny of IAs through the Regulatory Policy Committee” ought to drive up the quality of IAs in the medium term.  I did look on the RPC site for their opinion on the Central Funds IA but couldn’t find it, and to date they haven’t answered my phone message or email asking them for  a link.  But if you look here, at their last annual report, and turn to pages 60-62, you’ll see the MoJ has a less than stellar record of having not one impact assessment scored as “green” on the RPC’s red/amber/green ratings grid at its first attempt, and it only managed to get two of its twenty eight listed IAs through the “green” hurdle on the second attempt.  Maybe a nice little judicial review of whether this legislation should be sent back and its impact on small firms given proper consideration might encourage them to pay more attention in future?

Posted in Bit of politics, Consultation, SFIT | Tagged , , , , | 1 Comment »

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Olympics: tax dodge?

July 17, 2012

I’ve had an interesting email from the 38 degrees organisation asking me to sign a petition against an “Olympic tax dodge” and then another, excitedly explaining that McDonalds had already agreed not to take advantage of the so-called dodge.

So, I thought, what’s all this about then?

I had already vaguely heard that a country wasn’t able to apply to host the Olympics unless it also agreed to include a tax exemption, essentially so that athletes could go to the country where the games were held without having to worry about a tax grab over things like image rights that they might already have in place.

How did this, I wonder, apply to corporates like McDonalds?

Well, there’s an interesting article here from the Ethical Consumer which sets out their understanding of the “dodge” – that explains there’s also an exemption from corporation tax for “certain non-resident companies”.  Leaving aside the question of why would the Olympics be using non-UK-resident contractors in the first place, it seems not unreasonable to legislate so that the simple fact of working on the Olympics wouldn’t make a non-resident company into a resident company, doesn’t it?

The relevant legislation seems to be The London Olympic Games and Paralympic Games Tax Regulations 2010 (No 2913) (which can be found here, if you speak legislative-ese).  Let’s have a look, I thought, at the TIIN – the Tax Information and Impact Note, the impact assessment which would let you know the costs and benefits of the legislation.

Ah.  There isn’t one.

Look instead at paragraphs 10, 11 and 12 of the Explanatory Memorandum (the “plain English” explanation of the legislation)  First of all the explanation of where the Impact Assessment might be:

10. Impact

10.1 An Impact Assessment has not been produced for the Regulations as they have a negligible impact on business, charities or voluntary bodies.

10.2 The impact on the public sector is negligible.

Ok then, what do we mean by “negligible”?  The answer is to be found in the TIIN instructions which I obtained via a Freedom of Information Act request and published here.  The relevant limits are £100,000 or £3 million (presumably annual costs or benefits of £100,000 or overall cumulative costs/benefits of £3m):

“NEGLIGIBLE IMPACT (that is below £100k/£3m) then DO NOT commission analysis but instead explain what analysis has already been done e.g. any sectoral impacts or populations already known.”

So we conclude that no analysis was commissioned to support this piece of legislation because it was already known/assumed that its costs or benefits would be below the “negligible” threshold.

And then there’s:

12. Monitoring & review

The Regulations implement tax commitments made by the UK in bidding to host the Games. The tax commitments given are unique and for a time limited period. No monitoring and review of the Regulations is therefore planned.

So there we have it.  The government doesn’t think there’s any significant tax at stake, and it isn’t going to go back and check, so there.

The ethical consumer article (in its “read more” tab) has some interesting comparative figures from the 2006 FIFA World Cup in Germany which suggest the “negligible” figure is wildly inaccurate.  A Freedom of Information act request to see the data on which the decision not to commission analysis was founded might be interesting…

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

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Whose service is it anyway?

July 16, 2012

Sorry I was a bit quiet last week: I was sick.  Fortunately it was nothing to do with my blood pressure, because otherwise I think we might have had a bit of a mess today when my head exploded.

Why, do I hear you ask?

It all starts with the Cabinet Office consultation with the civil service unions about reforming facilities time.

(Incidentally, when did the word “reform” lose its meaning of “improve or amend, moving to a better state by abandoning what is wrong or corrupt” and instead come to mean “cut, preferably off at the knees”?)

OK let’s unpack this one a bit.  First of all, who is invited to consult?  Civil servants, that’s who.  Just civil servants.  Not the citizens who pay for government services (including the wages of civil servants) via our taxes.

Who cares?  Well the Taxpayers Alliance published a report last year claiming unions received more public funding than the political parties received donations, so  they’ve already had their two cents worth.  The Daily Mail has its opinion out there and it’s just what you’d expect.  Francis Maude has seemingly already made up his mind.

Yes, there are a few countervailing arguments.  The TUC had a go, commissioning a report, for example.  But where is the room for the wider argument, the opinion of the citizen, the consultation with the people who pay the civil service’s wages?

Secondly, and I know you know what I’m going to say, but where is the damned impact assessment?  The Government’s own rules say that when they are consulting about something with an impact on the public sector they should include an assessment of the costs and benefits of the proposal.  In this case, there’s a lot about how much facilities time is granted and what it’s used for and how it might be more closely regulated, and absolutely nothing about any benefits.  In other words, think about your own spending.  If you have to save money and you see you have two direct debits, one for £30 a month and one for £40, would you just stop the £40 payment? Or would you want to look at what you were paying for first? Instead of stopping payment on your house contents insurance because it costs £40 might you not first be well advised to consider the benefits of having cover, and the risks inherent in not having any?

Isn’t there also a legitimate expectation argument, in other words the government has said that it will consult before making regulatory changes and that this consultation will include an impact assessment?  If I were in one of the civil service unions I’d be looking closely at whether a judicial review was appropriate at this point, with the objective of asking the government to re-run their consultation on a rational basis, ie consulting fully with all the affected parties and including a proper assessment of the benefits, as well as the costs, of the proposals.

So I object to the limits on the consultees and on the lack of a proper consideration of the impacts.  What about the proposals themselves?

There are four areas covered in the consultation:

1) Reporting and benchmarking – developing a common system for reporting and monitoring Facility time across the Civil Service;

2) Ending or limiting the practice of 100% of Civil Service employees’ time being spent on trade union duties and activities;

3) Reviewing arrangements for time off for trade union activities so that the default is that this time is unpaid; and

4) Reduction in overall facility time across the Civil Service, in particular through more rigorous individual management of facility time. Ensuring that the provision of the use of facilities is appropriate, and represents good value to the taxpayer.

A “common system for reporting and monitoring” sounds like a reasonable idea but then I’m old enough to remember when the civil service had common pay and conditions that applied across departments and only required one team to negotiate and implement them instead of a different team in each department.

The second one is interesting.  As far as I can tell (and I’ve read the document twice so far) there’s absolutely no justification offered for wanting to end or limit the practice of having one person working for the union full time rather than thirty six people on an hour a week.  You elect a union president, for a year they’re union president full time, and then they go back to their job.  If that’s a problem, then can we see some evidence of what the problem is and why it’s a problem, please?

The third one is interesting: distinguishing between union duties and union activities and suggesting that you can get paid time off for one but not for the other.

We intend that we will develop and introduce a rigorous checking regime to support departments to differentiate between time off for duties and activities? Q3. How can we best introduce this approach? Are there any other approaches that you can suggest?

That’s an “it all depends what you mean by…” section.  What are duties and what are activities?  Well, helpfully listed in the appendix, I see that duties include

accompanying or representing a trade union member at a disciplinary or grievance hearing;

Now, I was a union personal caseworker for some years, but I never attended a disciplinary or grievance hearing.  I had discussions with people about whether they were in danger of disciplinary action or had cause to take grievance proceedings.  I accompanied people to formal and informal meetings with their managers or the people they managed to see if disagreements could be settled without recourse to disciplinary and grievance hearings.  Would all that time have been a “duty” – for which I would have been allowed paid work time – or an “activity” – for which I would have been expected to take unpaid leave?

And a “rigorous checking regime”?  So instead of someone being able to call on a colleague with some union training to help sort things out, what should we do now?  Perhaps private enterprise will step in and we’ll see a whole new raft of “ambulance chasing” lawyers offering no fee claims direct with a guarantee you’ll keep 100% of the compensation?

And the fourth objective of the consultation?  Words fail.  Is there any evidence that there is a need to reduce union facilities time?  Is there any evidence that a “rigorous individual management” of facilities time isn’t code for “bullying and victimising union members who choose to be active in their union”?  And is there a scintilla of evidence that trades union facilities time is not already “appropriate, and represents good value to the taxpayer”?

Posted in Bit of politics, Consultation | 2 Comments »

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Not quite a smoking gun. But still terrifying.

July 10, 2012

Here on Storify you’ll find my take on the Channel 4 Dispatches story last night, as it happened, on Twitter.

The programme looked at HMRC’s Non-Execs – the Board members who aren’t civil servants, aren’t there in a management role, and are there to keep the organisation on track.  As it says on the HMRC website:

HMRC looks to its Non-Executive Directors to:

  • bring guidance and advice
  • support and challenge management about the department’s strategic direction
  • provide support in monitoring and reviewing progress

and it found that a couple of them had business interests that you could categorise as in the “interesting” end of the tax avoidance spectrum.  One was director of a company which was located in Guernsey… and as I said on twitter at the time

“We are not in Guernsey for tax reasons”? I also have a rather nice bridge I could sell you if you’re interested…?
The other was director of an estate agency group and the programme managed to find some staff in one of the group companies who helpfully advised him on how to avoid stamp duty on a big ticket purchase.
It wasn’t exactly a smoking gun, no.
To me, the worrying thing was the flood of comments (which I’ve collected in the storify link) essentially saying that HMRC is corrupt and why should I pay my taxes when HMRC is corrupt.
If I were on the Board of HMRC today what would absolutely terrify me would be the thought that the public have started to perceive of HMRC as corrupt.
It isn’t, of course.
Yes, I am absolutely confident it isn’t.  Or at least I saw no evidence of corruption in the areas of the department with which I came into contact,  my 25 year career in the Department only ended in March and I don’t believe a culture of corruption can have taken hold in a mere three months.
But I do think there is a problem, and it’s this.  Business interests have become the arbiters of HMRC’s success, rather than the interests of the citizen and the wider polity.
Look at the HMRC’s non-execs:
  • Ian Barlow – KPMG
  • Colin Cobain – Tesco
  • Philippa Hurd – ITV
  • Phil Hodkinson – HBOS
  • John Spence – Lloyds TSB

and then compare them with, for example, the BBC’s Board of Trustees

The BBC includes former employees of the organisation, academia, politics and economics as well as big business.  HMRC’s non-execs are, in contrast, almost painfully non-diverse.  Where is the trades unionist (how about Liz (Baroness) Symons who was the first female General Secretary of the FDA union?)  The former employee (how about Liz Bridge, former Tax Inspector and now construction industry taxation expert)? The economist (how about Richard Murphy)?

Are we really moving towards a society where tax is to be compulsory for the little people but optional for big business?  Where tax policy making will be outsourced (and not to citizen groups)?  Where the only people who are qualified to guide, advise, support and challenge HMRC are – bankers?

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

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