Simon Sweetman was an inspector of taxes for 18 years. He left the Inland Revenue in 1989 to join Chartered Accountants Scrutton Goodchild & Sanderson, later part of Scrutton Bland, where he was successively a senior manager and later a partner. He has been an independent consultant since 2001. He is a former member of the tax policy unit of the Federation of Small Businesses and the small business working group of the Chartered Institute of Taxation. He is also on the tax law review committee of the Institute for Fiscal Studies and is currently chair of the Working Together group for the Suffolk and North Essex area.
Just because you’re paranoid…
HMRC has issued a document establishing the future relationship between the tax agent community and HMRC, explains Simon Sweetman.
There is much correspondence on this website. The reaction varies from “it might be nice if it happened” to “they’re out to get us”.
The latter reaction, of course, depends on believing that what is important in this document is what it does not say (which may be absolutely everything that it does not explicitly deny).
Now I have recently acquired a second hand cat. The cat believes in her heart that I am going to do her some deadly wrong, and watches all the time so that she is ready when it happens. She has no evidence for this beyond her feline sixth sense, but she is not to be lulled by honeyed words or regular bowls of food (indeed I suspect she is using the other cat as a food taster).
Now it seems to me that much of the response to this document is rather like that, and the fact that it doesn’t propose to charge registration fees or to set up some huge regulatory apparatus is simply further proof of HMRC’s duplicity. A bit like weapons of mass destruction - if you can’t find them that just proves that they are not only there but cunningly hidden.
Recent years have seen various points at which people have warned that HMRC was going to tear off its wig and stand revealed as Big Brother, and it hasn’t happened (the new penalty regime has been a fine example of this, with everyone standing by waiting for the crunch…and waiting). There are plenty of problems, but most of them seem to relate to individual incompetence or technological problems rather than aggravation from HMRC as an institution.
The question really is why this is happening now. HMRC knows what it wants of agents: it wants them to send in the “right” figures for all their clients. It knows that there are dishonest and incompetent agents out there, but it does not know how many or who they are (unlike in the bad old days when the District Inspector certainly knew that about the agents on his or her patch). And it needs help because some things are not working.
It has tried in recent years to work through the professional bodies – there have been several initiatives – and that hasn’t worked (and of course even if it did it leaves out the unqualified).
But most importantly we can all see that just going on the way we are is a route to further frustration and disappointment. Systems designed for fewer machines and more (and better trained) people are no longer working properly, perhaps because the old system (since it worked at a local level) relied on a whole slew of informal practices to keep it ticking over – if something didn’t seem to be working you spoke to somebody and found a way round it. That doesn’t work any more.
To some extent, of course, this is a kind of privatisation, shifting work from HMRC to agents: but much of it is removing a middleman who serves no useful purpose but who may confuse matters, and if we lose the grief of having to correct everything we will probably save time as well.
At the end of the day I don’t think HMRC are doing this because they want to control everybody: they’re doing it because they need our help. If it helps us as well then that will be good news.