HMRC have an appropriately tough time in the press this morning.
Many papers cover the fact that up to one third of calls to HMRC now go unanswered because of lack of staff. They should be as worried by HMRC's response of supposedly recruiting 3,000 new staff to deal with this because, firstly, I gather that this is a plan and not a reality and that the funding to pay for it has already been withdrawn and, secondly, staff recruited to deal with a short term crisis will rarely have the skills to do so. The crisis at HMRC is not just one of people power, although there is such an issue; it's one of skilled people power too.
As is evidenced by the article in the FT on recipients of the new Accelerated Payment Notices being sent to tax avoiders to demand up front payment of the money that they might owe if their chosen schemes fails, some of which notices are, it is said, dramatically overstated. Now I am not especially inclined to sympathy for this group of taxpayers but I have no desire to see over-taxation and I share their advisor's concerns about the process. When payments are due in a shorter time period than HMRC are taking to deal with appeals (which are taking up to 4 months) then something is seriously amiss and the law is brought into disrepute.
I have argued for longer than most and with more evidence offered than most that HMRC is under-resourced and in need of radical reform.
I might think that on the basis of this evidence that the case has now been made and that the time for action has arrived, but I suspect that is not true. So the demand will continue. And rightly so: if Greece proves anything it is that no country can survive without an efficient tax authority. We need one in the UK, now.
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The more Greece-like we become, the more cheerfully Osborne squeezes the economy.
It may be that countries as we know them aren’t actually meant (by the 1%) to survive, certainly, not in any form we’d recognise. We’ll see.
You didn’t show the raw figures.
The raw numbers show that every man, woman and child in the UK called HMRC 1.2 times.
So remove, children, people on PAYE (where that’s done to make there tax simpler), state pensioners, people who know their tax, people who file through accountants, people with no income, etc.
It’s clear.
The tax system is too complex or HMRC make too many mistakes with those that should never even have to interact with it.
Some people have complex tax affairs. But 72 million people? Never.
This is drivel even by your normal standards
I made no claim on the number of people calling. I reported HMRC data
And why do people call? To impart necessary information in most cases on issues as basic as benefits in kind, tax credits, lost payments and so much more
This is not complexity; it is management
And the simple fact is that there is no simple tax option: live with it
What we have to do is make complexity work, as we do in all other areas of life
On LBC you just said you had to wait 12 minutes to get through to HMRC.
Try this. Call the Hong Kong IRD. See how long that takes to get through. Last time I called they answered within 3 rings. I’ve learnt Cantonese, but this is tax so I waited 20 seconds for an English speaker to be sure. I asked for a tax statement for my last 7 years. It was in my inbox before I hung up the call.
Another enquiry sent by email, replied within the hour.
Contrast to HMRC.
Called the non-residents NI line. To be fair, answered in 30 seconds but I guess that’s becuase it’s a specialist unit.
Told to get a statement, fill in the online form.
Filled it in, huge form, takes 20 mins to get all the data and fill it in.
Submit. Electronic answer? No, someone has to take that data and manually send me a statement. Takes 4-6 weeks. Plus 6 weeks for post to get from the UK to Hong Kong by the HMRC letter date. And then the letter has conflicting information as it’s a cut and paste of the old NI rules and the new ones. Call again to confirm. Asked to write. Send letter. Reply 16 weeks later. And I’m expected to self assess?
I criticised HMRC and asked for better performance
I see no gain from the standard you suggest applies in Hong Kong
But to suggest that has anything whatsoever to do with the complexity or otherwise of the tax system and all to do with investment in resources in the tax system itself
So why do you deliberately miss the point?
Could it just be your total lack of objectivity?
The more complex the system, the more it takes to administer the system – in terms of manpower and cost. Plus, the more complexity involved, the less certainty there is for taxpayer and tax authority equally.
I really thought tax activists like yourself would advocate certainty – instead of relying on self serving concepts such as tax morality.
There is a lesson to be learnt from Hong Kong’s basic tax system, which isn’t necessarily perfect in today’s world, but the principle of simplicity ensures that taxation in Hong Kong works.
I do advocate certainty
That’s why I promote country-by-country reporting
And automatic information exchange
And beneficial ownership data
And a general anti-avoidance principle
All to make it certain that people pay
None of which result in certainty in the tax law:
While regarded as necessary, anti-avoidance rules result in greater uncertainty.
AEOI is an anti-tax evasion measure and has nothing to do with certainty.
CbC reporting is just that – an ex post facto measure that has nothing to do with certainty in the application of tax laws.
Ditto beneficial ownership.
You still have not addressed why there are conflicts in interpretation of the law among taxpayer, tax administrators and tax activists – all who seem have their own view on what the tax laws actually are. At least between taxing agent and taxpayer, the courts can ultimately decide. As for the tax activists interpretation, it remains just that – a third party interpretation.
And so the uncertainty persists. All parties deserve to better presented and defined laws.
There is remarkably little uncertainty in tax
That which exists is at the perimeters and relates to what is possible, or not
These measures all push people from the perimeters towards certain ground
So they do work, but just not in the mind of the persistent tax abuser
The tax abusers as you call them, the ones who seem to get away with though, do not rely on uncertainty. They rely on certainty.
You are quite right in some respects, there is nothing uncertain about the tax situations of Amazon, Apple, Google and so on. If there was the HMRC would have litigated. Why do you think we now have the DPT?
So if the law is so certain, then, ergo Amazon etc are not tax abusers.
It is the non-tax abuser who gets caught up with complexity. They are the people who cannot through to HMRC on the phone, they are the ones constantly needing guidance and often in dispute with HMRC.
You yourself have called for tax simplification, that would indicate complexity and uncertainty – what has changed.
Just go and read David Quentin on this issue and stop wasting my time
Osborne will probably privatise it soon. What could go wrong?
That is one of my fears
Do 3000 trained unemployed tax professionals exist? If not they need to get them from industry and they don’t pay enough for anyone to want to move
Spot on.
I have seen advertisements recently for “senior tax professionals” to join HMRC.
The salaries are laughable. £40k to max £60k for somebody who can earn at least double that in commerce or practice. That will sound a lot to some for a civil servant, but unfortunately the reality is that HMRC is competing with the private sector.
You can’t rely on good will and public service ethos alone to recruit good people. Money isn’t the only driver for people but it is important otherwise why bother going to work at all.
I entirely agree
But do they not tell us that to be lean is to be more focused and efficient, such as 10 min visits from care agencies to vulnerable people.
Do you ever feel no one cares and you’re wasting your life? I could right a blog and get more readers purely from my friends, let alone people who actually care what I’m writing about. I guess that just shows you have no friends, which says a lot about you as a person.
Ed note: just occasionally I need to publish the type of comment I usually delete on this blog just to show why I do delete them, which my right wing ‘friends’ call censorship
Thanks for sharing this example of an such a thoughtful and engaging comment, Richard. It’s worth knowing that you have to deal with this kind of pathetic shite – not that I expected anything different given the bilge and bile that’s now a central feature of twitter, blogs and other online forums.
Unfortunately Richard M, it would seem that the only way to deal with these people is to be utterly ruthless with their comments and refuse to publish them…just black list them.
These rhino hided idealogues are incapable of introspection and entertaining anyone else’s view point…publishing their whinging, whining, irrational personal attacks doesn’t appear to embarass them.
THEY are the product of an entitlement culture, NOT the less fortunate who they resort to attacking at some point.
The Right after all have pioneered this form of censorship.
Agreed
Cameron’s neo-liberals have already farmed out most of the remaining areas of government activity so why not tax collection? Why be content with taking the country back to the 19th century when there’s the opportunity to revisit the 17th?
The risk of it happening is high
I agree, I’m afraid, Richard. I don’t think any public service is safe from privatisation for three reasons. First, and most fundamentally, is the extent and depth of the ideological mission the Tories are on. Within this paradigm virtually nothing warrants public ownership/operation, and as we’ve already seen, even within such obviously public services as the armed forces, every “non core” activity is seen as ripe for privatisation.
Second, and related to the last point, if any activity can be milked for profit then it must be, and there are plenty of Tory supporting business people and organisations who deserve the opportunity to do just that.
Third, it’s quite clear that one plank of Osborne’s budgetary plans are based on raising a substantial sum of money from the sale of pretty much every remaining public asset. When you tie this to my first and second point then privatisation becomes more than a ‘risk’, it becomes a certainty. The only question is when. And the answer to that has to be well before the next election, so I’d say barring some Parliamentary revolt(s) everything gone by 2018.
That seems about right Ivan
Richard and Ivan,
If you haven’t already read this, you’ll see that my old Borough, Barnet, on which I served as a Councillor from 1994-98, is already planning a TOTAL hollowing out:
See http://www.theguardian.com/commentisfree/2014/dec/15/local-services-barnet-council-town-hall.
Frankly, if this goes ahead, what’s the point of Councillors – especially highly paid ones, as now, as I believe the Leader gets £30k pa! For doing what?
If this proposal goes through, I’ll start a petition to get rid of Councillors, and replace them with an ad hoc “Citizens’ Jury”.
The logic is obvious: the market always knows best
And yet that is based on an absurd idea that there is competition for the supply of services when for all practical purposes there is none
Your petition would make sense – but the rentiers would ignore it, I fear
You wreck the public service first.
Then you offer the solution.
PRIVATISATION……always to introduce a profit element in order to drive down salaries the main cost in a service environment
Problem….Reaction….Solution (The Hegelian Dialectic)
Doesn’t this sound familar?
This started with the railways…
The Republican party in the USA have turned this into an “artform”
http://tcfrank.com/books/the-wrecking-crew/
This is the product of lazy unimaginative risk adverse elites resorting to rentier behaviour in order to feather their nests at the cost to the main population. These people are the biggest wefare queens on the planet!
“And the simple fact is that there is no simple tax option: live with it
What we have to do is make complexity work, as we do in all other areas of life”
I’d suggest the complexity of the tax system is far and away disproportionate to the complexities of life. It’s not even a close call. It has become ridiculous.
It seems to me (as an ordinary taxpayer, not an expert) the system is a cosy club aimed to maintain the prestige and incomes of the tax profession – on both sides of the fence. All at the expense of us mugs.
In some areas yo are right
For example the continuation of rules on transfer pricing can solely be justified by the big firms of accountants who lobby for its continuation because they make so much of it
But the alternatives are not easy either; they’re just better
But simplicity and tax do not mix unless you want to help avoiders and evaders
“But simplicity and tax do not mix unless you want to help avoiders and evaders”
I’d suggest the opposite is often true.
Think of the shenanigans that went on with the tax incentives on films. Once you introduce something like this, you’ll attract the carpetbaggers who will use the reliefs etc. as loopholes. Can anyone be surprised this happened?
Is there really no chance of just defining a tax base (whether consumption, income) in very broad terms, with minimal exemptions?
No
In a word
Because you assume the problem in defining tax is in the tax code and if isn’t. It is in defining and finding the tax base