The autumn statement, and HMRC's own vision for itself, suggests that the future of tax in this country belongs in a digital era. The result is that almost every tax office in the country is to be closed, to be replaced by thirteen new regional hubs, some of them profoundly remote from the places they will supposedly serve. But according to HMRC this will not matter as we are all going to interact much more often with HMRC via the apps they are going to give us (for free!) on our mobile phones.
I have to say that this sounds like a vision from hell doomed to failure to me.
I cannot of course prove it, but I suspect that the vast majority of the calls that were not answered by HMRC this year (the tens of millions of them) could not have been resolved if the caller had at the time had access to an HMRC app.
And I do not think that dealing with HMRC is the remotest bit like shopping on line (which they suggest it is), which most of us only do when we already have a very good idea of what we want and the only decision variable left is price. I know that because when it comes to grocery shopping on line there has not been the expected revolution, because the list of options is just too hard to handle and the outcomes too unreliable to depend upon, and tax is much more complicated than that. Which is precisely why people will still want to call in person, as I do at the supermarket.
I also anticipate a massive back lash and resentment if we are meant to update our tax details on line once a quarter, with no doubt the threat of a penalty being applied if we do not within a very short time period (it's 30 days for VAT) when tax will continue to be assessed annually.
And all of this will be compounded by the fact that HMRC will, when operating this new service, have retreated to a bunker a long way from where we are to ensure that human interaction becomes as hard as possible.
What is more, those thirteen new bunkers do themselves have massive inherent design flaws built into them. Wendy Bradley, whose tax blog I do not reference enough, detailed some of these a few days ago, saying:
This is a bad idea for so many, many reasons. Here are a few of them.
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HMRC as a national network used to have a mix of people who worked locally (who would notice a new business starting up or a conspicuous show of unexplained wealth) and people who were moved around the country for promotion (so the standards of service were national). In the new plan, whole swathes of the country will have no physical HMRC presence.
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Regional centres where someone spends their whole career have the potential to develop into fiefdoms with their own customs and practices — a national system becomes a postcode lottery.
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A national system with regular staff mobility has an in-built anti-corruption apparatus**. A static regional team will need another bureaucracy of inspection and quality standard-setting.
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As the PCS points out, there was no public consultation or parliamentary discussion of the plans. HMRC is a non-ministerial department but that doesn't mean it can behave like a private company and arrange its affairs to suit itself rather than the public it services. Obviously we need a tax administration fit for a twenty first century tax system… but who decided this was it?
To put it another way, poor service will be the new norm with a higher risk of error and corruption thrown in.
And all of this to save 18% of HMRC costs when the real need was to go out into the community and collect the tax owing by the businesses and others who do not pay it so that a level playing field for British business is created by ensuring that everyone competes fairly because everyone is paying the tax that they owe. The economic returns from doing that would be enormous, and would exceed the tax yield by a long way. But instead we have a vision of automatons paying their tax by app to data processing clerks whose work is, no doubt, already being considered ripe for outsourcing, and all because we have a government that does not understand that paying tax is one of the key relationships that binds us together in community, which they do not believe in.
Read The Joy of Tax and quietly weep for the opportunity we have lost due to poverty of thinking at the top of HMRC.
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“HMRC is a non-ministerial department but that doesn’t mean it can behave like a private company and arrange its affairs to suit itself rather than the public it services. ”
That would be that lovely Board of PWC / KPMG people then- acting as they are used to, as a private company.
They may have struck on a wonderful new idea – don’t bother with working out complicated tax returns, just keep fining people and you still get in the income!
In other news, abolition of court charges is to be replaced by a levy on corporate law firms- so the legal system becomes self funding – another retreat from tax funded services. http://www.solicitorsjournal.com/comment/michael-gove-trojan-horse
Welcome to the Machine Age!
I commented at some length on this a few weeks ago, Richard, so shan’t bore people again, except to point out two things.
First, nobody should underestimate the extent to which techno utopians (or those that pretend such a state is achievable because there’s plenty of money to be made from the endless, often failed, attempts to get there) influence the organisation and management of government and public services. And this is doubly the case when massive savings have to be made and “solutions looking for problems” can be wheeled out at will by the advocates of such “solutions”.
Second, as events this week at my university demonstrate, where a model exactly akin to that to be pursued by HMRC was approved by the university’s Council (on the recommendation of senior management), developments of this kind are now all but unstoppable.
And just to be clear on my own position. I’ve been designing and delivering online courses for postgrad students since 2006, when the faculty in which I then worked pioneered such things, so I’m no Luddite. But I do fully recognise the limitations of such technological “solutions”.
I love technology and live by it
Which is why I am well aware of what it cannot do
I suspect those who make decisions on these things hardly ever touch it
Richard
This is just another shambles where the numpties who come up with this nonsense try to force the complexity of the real world to be as simple as they are.
I hope, Ian, that the OU are not going down the CBT route and getting rid of course units in printed form as well as cutting/eliminating face to face time? Because if they are you might as well pack up and go home because no one will learn or properly understand anything. The only outcome of CBT is an increase in ignorance.
The only criticism I have Richard is that even the qualms you outline underestimate the sheer stupidity of what HMRC are doing by some distance.
My last role in the organisation I worked for before retiring was to deal with reports by our own field engineers of damage to external assets by other utilities etc, initiate the process for repair, and try (don’t ask) to create a bill of the costs incurred. About a year or so before I retired there was a project set up to introduce an app to streamline the damage reporting process by the field engineers because the amount of information required often took anything from 10 to 30 minutes over the phone. It’s now two and half years down the line and I was told the other week by former colleagues that this is no longer being pursued. It’s too complex.
Unfortunately, despite the severe real world limitations of trying to shoehorn the real world into a simple algorithm, HMRC will buy this pig in a poke idea thinking that it will save money when it will in fact end up costing far more than any savings.
Ditto for the regional centres idea. The organisation I worked for for 35 years went down this route with its logistics operation, reducing eight regional centres into one single national just in time operation in the early 90’s. That was a shambles too. With items not delivered on time to dead drops requiring operations to surreptitiously organise their own squirrel stocks to get work done and reduce their own internal unit to unit costs between themselves and logistics. A few years back they went back to some form of local stores arrangement, but not to the extent which previously existed.
All this simplistic reductionism achieves is a false impression on a spreadsheet and increased costs to other parts of the system, including the end users.
But you just cannot tell the numpties anything. They will not listen. Because they are just too bloody stupid and arrogant.
Dave, I’m afraid the CBT route is one that the OU has been heading gradually down for some years, but is now set to dive headlong into. But I shan’t/can’t say more about that on a public forum for obvious reasons.
I have to admit that when I first read Dave’s comment I did have to muse on why cognitive behavioural therapy came into this
The tick box and generalisations of human beings cannot be done well. There are too many variations, with a human being and with the particular area they inhabit. A one size fits all can save money I am sure but it is now a conveyor belt unless you are rich and can bespoke everything. Dismantling of services brick by brick. I used to walk with my dad fo collect his big jug of beer and call for the accumulator being charged up for the wireless in time to listen to Dick Barton special agent and his sidekick snowy. My but I am old and cannot fathom what is happening.
If HMRC think tax is like grocery shopping on line perhaps they should explain to us why the only Grocers growing their market share, Aldi and Lidl, have no online shopping presence at all?
It seems that the move away from paper tax discs last year to a digital platform has saved about £10m in administration, but cost about £40m in additional unpaid vehicle excise duty (compliance fell from the extraordinary level of 99.4% to 98.6%). http://www.bbc.co.uk/news/business-34933962
Given the government’s track record for implementing large IT projects, what are the chances that any “saving” of HMRC costs will dwarfed by the costs of the project – particularly if it is more complicated than expected, or overruns – and decreased compliance? A drop in compliance of even a fraction of a percentage point would cost billions.
The digital nirvana would involve HMRC automatically collecting data from employers, banks, landlords and tenants, companies paying dividends, foreign tax authorities, etc; correctly allocating each item to the right taxapayer; and directly recovering the tax due. And the chances of that working in practice are …?
Quite right Richard. This is an absolute disgrace. I do not understand all this emphasis on new technology. HMRC should be investing in people instead.
I agree. Take away their computers and you would create a lot of useful jobs. Just what we need right now. Those computers are just part of the neo liberal conspiracy.
Like most of Autumn statement, essentially this is wishful thinking. Unfortunately it will be very very expensive wishful thinking while at the same time reducing the tax gathered.
This is just fiddling while Rome burns.
PS I am an economic fool, but I have been working with big IT systems for over 20 years. The big 4 service providers will promise you the world but will deliver little. See any large Government IT implementation of the he past decade for confirmation. Did I mention the expense?
I see the providers as the charlatans in this and the gov’t as the continuing fools
Having been looking at this type of thing since the 1990s, I’ve come to the conclusion that while I’d totally agree the big IT providers (like their sibling management consultancy providers – often one and the same) are indeed charlatans many in government are not as foolish (ie. ignorant) as they make out. Or if they are they have people advising them tech savvy enough to know fake claims when they see them.
No, playing the fool suits the political and managerial agenda in many cases. Allowing – as with HMRC – ministers and senior management to claim they will be delivering all these savings with a hardly diminished level of service while actually knowing full well (or at least suspecting) that it will never happen, or not until much later than planned and after spending a shed load more money (universal credit anyone).
But hey, ho, this is all part of the smoke and mirrors that’s become the mainstay of contemporary UK politics and public administration and management.
The most scandalous thing about the whole stinking system is it’s underpinned with the patent lie that this is all about saving public money, when in fact in almost every case more public money is spent than is ever saved. Witness almost every outsourced service when one digs beneath the efficiency claims, and of course, that mother of all scandals, that proves beyond doubt that successive governments NEVER act in the public interest (only that of big business) PFI, and now the supposedly reformed Tory version PFI2. This is nothing more than lawful extortion – pure and simple. The fact that it is not only tolerated but encouraged just goes to show the complete lack of ethical standards within and across government.
I have to agree
Even though it is depressing to do so
R
HMRC board are completely incompetent, and their plans are entirely driven by cost-cutting for the austerity agenda. There is no regard for customer service or tax compliance.
Leaving aside the public service for the moment let’s consider the most basic compliance activity.
Say a plumber in Norwich is mostly trading cash in hand and not declaring this income. The Board are planning for this to be dealt with from Birmingham.
“Digitally”
Yet in their excuses for the 13 big centres they say it is essential for the staff all to be on one site. Apparently it would be impossible for a team partly based in Coventry and partly in Birmingham to interact or share best practice at all. “Digitally” or otherwise.
Let alone, as Wendy Bradley has suggested, to work remotely
No trust
No comprehension
Totally controlling mindset
That is wholly internally focussed on the needs of higher management and the tiny stakeholder group they serve in the Treasury
I recollect a talk I attended at Harrogate in the early 1990’s where Ian Vallence waxed lyrical about how digital communications technology would enable the work to come to people rather than people having to go to the work.
That decentralisation pipe dream certainly went well,did it not?
When I was in Customs and Excise in the 70’s and 80’s and every community had its local office and we knew who the local rogues were and were able to devote extra attention to them for example by ensuring that they had an annual VAT inspection. The new regime seem to think that computerised “risk analysis”will be just as effective at fraud detection and protection of the Revenue. The are clearly deluded and as Richard says only focussed on what their masters want and not on effective revenue controls.
When the risk of a visit is now down to once every few hundred yerss there is no real deterrent effect left
Richard, I read recently that the same now applies to health and safety inspections because of the decimation of the HSE.
And now the entire public health budget to local authorities is to be cut. Which follows on the heels of the massacre of trading standards in most areas of the country.
In short, the Tories have realised that they can get rid of all regulation they hate so much, but which protects the wellbeing and interests of so many citizens, not by announcing anything but simply as a largely unreported outcome of austerity.
This sounds like a blog in the making….
Quite right Richard, but our neo-liberal media will never expose this. There was a time when the BBC would have invited someone like you to present a TV programme on issues like this, but the current media dominance by neo-liberals means this will not happen. Roll on 2020 and Jeremy Corbyn bringing in a courageous state!
I can hope for e Courageous State
We are a long way from it as yet