Posts Tagged ‘ARC’



September 11, 2013

So I was at a meeting of the Wizenagemot yesterday…

Ah.  I probably need to step back a bit and explain?  You see, it’s my belief that the debate about tax is divided between two groups.  There are the tax professionals on the one hand – people like HMRC and HMT and accountants, tax specialist solicitors and barristers, tax specialists in large businesses and policy thinktanks and lobby groups.  People who understand that a painting can be “plant” and whether or not a jaffa cake is a biscuit.  Let’s call them the tax wizards.

And then there are the people who don’t understand that “there is no equity about a tax” but think that there ought to be some kind of principle of “fairness” involved.  People whose “idosyncratic and ill-informed” views about tax are “a joke to those who understand the subject”.  The tax prats .  The citizen stakeholders.  People who pay their taxes and don’t understand why everyone else doesn’t seem to have to follow the same rules.  The tax muggles.

Well, if you’re a tax muggle you may not be aware that there’s an active debate in the tax wizarding world about this thing called the Tax Gap, which is the difference between the tax that HMRC collects for us, and the tax that they ought to be able to collect if everyone paid their dues and no-one made any mistakes.  And you don’t have to be a wizard to understand that this gap is never going to be zero because, after all, nobody’s perfect, but everyone is clear that it ought to be as small as we can reasonably make it.

Ah.  And there’s the rub.  Because David Gauke, the Minister for Magic doesn’t think there’s much of a problem with the tax gap at all.  He told the meeting that the UK tax gap was “relatively small by international standards”.  (Does anyone have a source for this, by the way?)

He also told the meeting that he made “no apology” for HMRC’s staff and budget being reduced, which was a bit of a brick considering that the meeting had been called by ARC, the section of the FDA that represents senior officials in HMRC, and that their agenda was to explain that they thought they could make a big hole in the tax gap if they could just have a few more people and some decent treatment for their members.

The meeting was at Portcullis House (and isn’t THAT a fabulous building!  Wow!) and involved tax wizards from HMRC and ARC, the Exchequer Secretary, his Labour Shadow and the Chair of the backbench Lib Dem Treasury Committee, as well as Richard Miller from ActionAid.  It was chaired by Vanessa Houlder from the Financial Times and was extensively tweeted here (although not at the time – no signal inside Portcullis House).

I am not sure there was any great meeting of minds resulting from the event.  The politicians spoke to their briefs, the campaigners argued the tax gap is bigger than HMRC’s calculation, and I sat there wondering (a) what does it matter and (b) when was ARC going to get back to the “give us more resources” point?

What does it matter?  Well, everyone agrees there IS a tax gap.  Everyone agrees that it is a good thing to endeavour to keep the tax gap as small as feasible.  There is some broad agreement on what elements are included in the calculation of the tax gap so we know where to direct attention.  So what does it matter in practical terms whether underpaid corporation tax is around 3-4 billion or 12 billion?  Can we just agree that it’s either “shedloads” or “a fuckton” and that in either case we’d like some of it back, please?

Which takes me back to (b).  I was surprised, frankly, that ARC didn’t drive home their point a little more strongly.  When your Minister says he makes no apology for cutting your staff and resources, surely you exercise right of reply and say, “yes Minister, but” and then hit him with your stats?  The stats you’ve politely buried in the Notes to Editors to the press release linked in the bibliography to the polite paper you’ve put together for the meeting?  Because, you know, he won’t have read that far.  Even his staff are unlikely to have read that far.  So when you have him sitting two seats away from you, you pass him another cup of coffee and give him your elevator pitch: invest £312.3m in us and we’ll bring you in eight billion quid (£8,260m)

As Saint Sir Bob apparently never actually said “give us the fucking money!”

Yes, Minister?





[note: edited 16/9/13 to add a link to the FDA reporting of the event – first link in the article]


Only connect

June 25, 2012

Today the PCS – the Public and Commercial Services union – in HMRC – is on strike (or, as Sky news helpfully has it, “Jimmy Carr inspires thousands to walk out“)  The strike is in protest at cuts in HMRC staffing and to what they call “creeping privatisation” including two trials of using commercial services to replace HMRC call centre staff.  At the same time there is a lot of political noise about abolishing various benefits such as housing benefit for the under 25s.  The thinking around this is presumably that they can always go home to Mummy and Daddy, can’t they – an astonishing display of privileged thinking from the people who have never had an actual proper job in their lives.

Twitter, as ever, summed it up in 140 characters: ” Cutting housing benefit to under 25s might save you £2bn.  Well done.  Collecting the tax will save you £76 bn.  Happy to help.”

Only connect.

Meanwhile, here is the response I sent last week to the consultation on “possible changes to income tax rules on interest” – yes, I responded to all the ones that closed on Friday, I just didn’t have time to blog about it last week!  But there is a connection to today’s action, in that this is yet another consultation document that has a sloppy impact assessment that doesn’t make any compelling case for change, which is of course the point of doing the thing in the first place.  There’s an inbuilt cost to businesses and the rest of us in making any change to tax law at all – the cost of people having to learn about the changes and implement any changes to their own systems when they could otherwise be spending their time making widgets and earning profits.  So it’s one of the basic tenets of better regulation that you only make changes when the benefits justify the costs.

Is the current crop of consultations a bit woolly on the whole cost/benefit analysis side because they’re just going through the motions of consultation, or have they genuinely not got the resources any more to do the basic analysis work that ought to underpin any changes to legislation?


Possible changes to income tax rules on interest: consultation response

Dear Tony

This is an individual response to the consultation and will also be published over the next couple of days (with commentary) on my blog,
I cannot see that the case is made for any changes to take place.  Although the impact assessment shows a 200m exchequer impact on the possible withdrawal of an exemption for intra-group Eurobonds, the remainder of the proposals are said to lead to “improved rules on the taxation of interest and interest-like returns” but what the “improvement” represents is not clear and there is no quantification of any impact on individuals, businesses or HMRC.  There is no cost/benefit analysis which would justify the change, and no compelling case for change is made elsewhere in the document.
It also seems to me that this is a consultation which would have benefited from a step back and look at the whole interest question in the round – the consultation is said to cover “the income tax rules on the taxation of interest and interest-like returns” but not to cover proposed “changes to the procedures for the collection of income tax deducted at source by companies, local authorities and individuals”.  Why not?  Wouldn’t it have been sensible to have looked at the taxation of interest – all interest – at once and made much more radical simplification?