As the FT reports this morning
Software glitches are putting thousands of people at risk of paying hundreds of pounds too much tax next year, as programmers struggle to cope with an increasingly complex tax system.
Experts blamed the “horrendously complex” changes to the taxation of dividends and savings income for errors in the tax computation software for the 2016-17 tax year which ended on Wednesday. They said the problems were caused by the interaction of the new tax-free allowances for dividends and savings and the zero per cent savings rate band.
HM Revenue & Customs will provide a fix for 2017-18 tax returns but in the meantime those affected are asked to file paper returns.
You really could not make this up. When the success of Brexit is dependent on HMRC getting its computer systems right and when HMRC is supposedly making tax digital they are so far behind in their work that a tax change signalled well over a year ago cannot as yet be programmed into their software with the consequence that taxpayers will have to resort to paper returns and HMRC to manual tax calculations.
The messages are clear. First, some of Osborne's tax tinkerings are absurd and need to be swept away. Stupid tax concessions for savers make no economic sense and are creating massive complications and uncertainty in the tax system.
Second, we have to assume that HMRC will not get the software for Brexit right on time. And that will lead to trade mayhem.
You have been warned.
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And there’s more 🙂 http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news-parliament-2015/hmrc-concentrix-report-published-16-17/
The BBC programme on Ada Lovelace, the Victorian lady who predicted computing was interesting. Quite simply a major reason for her ideas not being followed was the huge increases in size of the machines then and the cost that would occur. My in house software engineer tells me that simple software is one thing. But as you add more tasks etc. as it becomes more and more complex you begin to enter a world of infinite variability and uncertainty. Like say Collateralised Debt Obligations. HMRC have been led by the politicians into an infinite universe. But is there life out there? Are those bleeps attempts to communicate. We shall never know.
Ah, Ada, that was the computer language I used to programme in. Invented by the Americans specifically for defence systems, it was quite lovely, with all sorts of safety-first features. It’s never used now except for updating legacy software. I loved Ada.
Austerity seems relentlessly to be pushing Britain towards a failed state. With Brexit and no EU institutions to supervise it, it is an ever grimmer prospect.
Staggering we can feel like that when we are still the sixth biggest economy in the world
I have been involved in developing an information system for a large underground mine. The first problem is to get agreement on the output information required. This is critical to control costs. Then the system was first set up on a spread sheet program to get the input data and the calculations required agreed. Only then is the database program implemented. Note that presentation of the output is relatively easy to change but changes to the data collected, calculations and output are major problems which could require completely rewriting the program.
The HMRC will require a huge database and having multiple submissions per year will make it even bigger. It would be easier to manage if separate systems were set up at each local tax office. This would allow testing on a small scale in parallel before full implementation. But of course HMRC are shutting all these down.
HMRC’s system will be similar in size to the systems the banks use (They do not make major changes following every budget) and they are frightened to make any changes in case anything goes wrong.
Agreed