Concerns over HMRC's IT ability should be growing rapidly. Recently it was revealed that some taxpayers are being asked to submit paper tax returns this year because HMRC's IT systems cannot be programmed to correctly calculate the tax that they owe.
Today there are reports that brewers cannot submit their monthly duty returns for March online because the system cannot handle the change in rates during the month. Paper returns will be required instead.
Why does this matter? It does because come Brexit the volume of declarations for tariffs will rise exponentially and we are already aware that HMRC is unsure that it will have the capacity to handle the expected volumes. It is supposedly updating its systems. Current evidence is it will fail. And if that happens then UK trade will grind to a halt under a mountain of paperwork on 30 March 2019.
That is not a pretty prospect. It is also a likely reality right now. I wouldn't suggest panic though. I just think that the outcome is that the UK will be asking for a very long transitional period from the EU during which existing trade relationships can stay in force whilst we try to make our computers work. People may have voted Brexit but the computers will be saying no, and the computers may well get the final word, delivering a situation where nothing changes and we pay in full but have no say in the EU. You could not make it up, but it may be unavoidable.
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Just to add a little fuel to your fire: there are widespread reports in the technology press that independent software developers are leaving HMRC and other government departments in droves, because of new rules on the interpretation of IR35, the regulations that determine whether a self-employed consultant should pay the same tax as a regular employee. Without going into the question of “false self-employment, which you have discussed on other occasions, this means HMRC and other departments now face a doubly acute problem. Unable or unwilling to hire permanent professional staff, external experts are no longer interested in working for them at exactly the time when they are most needed. The light at the end of the tunnel? Definitely an express train heading this way!
That report is, I am sure, true
And that train is going to crash
It’s worth bearing in mind that many of those leaving know nothing about tax and have been all too keen to press the benefits of this or that technology or the benefits of this or that agile project management approach.
At least the debacle will now cost less!
I’ve worked in IT for decades. The mantra is KISS. Keep it simple stupid.
And tax is not KISS
I grew up in New Zealand. There EVERYONE submits a tax return and there are no tax allowances. I first submitted one when I got a paper run aged 13. My Dad helped me fill it out.
The return form used to be a booklet with up to 14 A4 pages with supplementary pages possible for certain occupations. There were exemptions galore and it seemed everyone was on the fiddle, because there were multiple unintentioned loopholes.
The 4th Labour govt simplified the tax scheme, lowered rates and scrapped pretty much all exemptions. The booklet went to a folded A3 page the last page of which was the declaration. So 3 pages. If you were in receipt of child tax credits you inserted a coloured A4 page.
Fewer exemptions meant fewer loopholes, intentioned or otherwise. And fewer opportunities for govt to reward their friends.
Of course it has grown more complex over time but it shows what can be done. It it is done best it is done as a big bang, sweep away the complexity overnight. Pull the rug from the tax experts, everyone could be one. Carrot is slightly lowered rates. Then you double down hard on collecting it.
The NZ govt for a time actually ran surpluses and used them to pay down debt and no, they do not have appreciable oil or gas. Most of it is more expensive to run than the Highlands of Scotland, feck all people and good two lane paved roads, when the earthquakes don’t ruin them. They manage just fine as a small country trading in the world, making friends.
I think you m ay be offering a glossy view of New Zealand
It’s a tax haven, for a start
the other mantra is “function creep” – the one element that has caused most UK gov’ IT projects to come in way-over time & way-over budget.
It is like watching the Magic Roundabout having taken a few LSD pills – weird to start but then veering into totally bonkers.
(disclaimer for the rozzers – I have never taken anything stronger than alcohol – ever).
Then we have UK likely to be fined £1.7Billion because of lack of checks by customs on cheap Chinese imports flooding EU through the UK. Customs staff cut in droves, then all focused on immigration.
Just after the Brexit train hits the buffers the survivors will find there is another one hurtling in behind them.
Hang on. The 1.7B has nothing to do with brexit. The role of the uk within the eu in terms of thwarting sensible controls on finance will come to an end with brexit. Messy or not things will now change.
This is exactly what has happened with the computerised Universal Credit system. It cannot track the fluctuations in people’s income and does everything with old information – it is consantly in arrears and holds up payment or, over pays and then claims back and so that it even more uncertainty for the claimant (or shall we say ‘human being’ who needs to live).
You know, I’ve had it with IT. All it is doing is being used to cut costs and not improve peoples’ services.
IT makes people have to work harder to get what they want.
IT puts real human beings out of jobs because the investor’s returns are being put first or some stupid politician wants to be in power on the basis of lower taxes.
IT creates what John Seddon calls ‘failure demand’. That is to say that a good service is one that can deal with a diversity of demand from the service user.
Most of these automated systems do not do this, so what happens? People have to put in appeals or try to talk to someone on the end of a phone to get to the nitty gritty of their issue. That is failure demand because the issue has not been dealt with in the first place. The issue is still live.
In my view only another human being can recognise such diversity and respond – not a bloody computer.
No doubt those touting artificial intelligence will say these things can be dealt with. But make no mistake – in IT Man (the inputter) is God and what we create will be loaded with all our pre and misconceptions (bias’).
How long will it be before a robot doctor in the NHS tells you that he will not be doing your life saving operation? All because the parameters of its decision have been set by an investment manager sitting comfortably at his desk on Wall Street thinking about the next yacht he will buy from the bonus he will get from savings of thousands of other operations and treatments he has prevented?
By the way, this already happens in the American health care system (under the guise of ‘loss adjustment’).
IT is meant to help man – not replace him. We had better wake up fast.
Indeed
GIGO rules right now