How are we to make HMRC work?

its the fundamentals that are wrong. Its on overly complex set of rules trying to raise too much tax; with far to much political interference, and a policy setting body too keen on headline grabbing soundbites - with the taxpayer left to pick up the tab, along with penalties. Could have been written by Kafka.

Try and throw an IT solution at this and it will fail. Even if they had not made such drastic staff cuts they would still be struggling.

If they don't fix the fundamentals then all they are doing is rearranging the deckchairs

HMRC and the Inland Revenue before it have always had the same problem and will continue to suffer the consequences until the problem is dealt with. The problem is the sheer volume and complexity of the tax code.

 They have tried to put the usual sticking plaster IT solutions onto the problem and this has failed. They have also tried to throw masses of unqualified or underqualified people at the problem - this has also failed.

They only real solution is to simplify the tax code to ensure that the majority of people can do their own returns without substantial knowledge of the tax system or reverting to accountants. This will relieve pressure on HMRC to then tackle the corporate stuff.

We need to get rid of 75 years and thousands of pages of special pleading and special rules. Get rid of all the nonsense about residence, ordinary residence, domicile, etc. If you live in the UK, or your income arises in the UK, you pay UK taxes at the same rates as everybody else.

Equally, it shouldn't matter how income arises. All income should be taxed in exactly the same way regardless of whether the recipient is employed, self employed, LTD company contractor or whatever.

I'd probably still retain the entrepreneurs allowance as there needs to be some incentive for those that build up a business and either sell it or retire.

When the tax code - and I mean ALL of it, corporate, employer, employee, capital gains, etc. is no more than 100 pages, then an IT solution might work. However, if we reach that point, we probably wouldn't need it.

Chances of any of this happening? Within a gnats hair of zero probability.

Why? Because there are no votes in it from the MP's perspective and it is contrary to the entire 'Civil Service' ethos (the real one rather than the publicly espoused one), which demands ever increasing complexity of legal and technical processes to justify ever expanding departments.

Cynical? Moi?

Start by getting rid of Strathie and Hartnett followed by a ruthless cull of the rest of the staff who display a serious attitude problem.

They should realise that THEY work for us, not the other way round.

Then we need to simplify the system so that HMRC staff can understands it - at present most of them dont.

Culling is all very well but it hobbles the horse without making the cart any easier to pull, or as HMRC seems to do, push! George Osborne had a point when he commented on the seperate rules for NI's and tax. Until the whole system is overhauled as mentioned above, no number of motivated, qualified and well trained staff (if such exist) will solve the basic problem.

Any chance this government will act?

Answers on a postcard to....

Perhaps the answer to Simon's question lies in ensuring that those who are tasked with making the ultimate choices, are capable of understanding what the problem is and how the solution ( as about to be implemented ) actually deals with the problem.

This may mean that HMRC management call upon those who know their subject - PAYE - SA - Debt Collection etc. rather than allowing Consultants, promoted Individuals, or IT specialists to devise the solution.

Simon's point about the missing data is particularly relevant, since the idea that ANYONE would want to copy all the Tax Credit Claimants information onto one, two or more discs seems to be the product of an Individual who is more concerned with the "amazing technical capabilities of compressed data" rather than someone who would immediately ask the question - "WHY would anyone want all that data on disc?"

Similarly one could ask why such a complex process exists for the simple operation of "acting as an agent". Why has it to be fraught with such seemingly dim and unproductive processes.

There are of course very many other examples of this unfortunate system.

There used to be a program on TV where the children of a family were allowed to make decisions about the redecorating of the family home. This was Car Crash TV, as one watched parents gaze in horror at the moment of the Reveal. One does not get a carpenter to undertake the design of a nuclear plant, except perhaps if you are part of HMRC Senior management

Yes - Mostly they are, but not "jobbing accountants" like most of us. More of your pure corporate "Management Accountant" types I believe. Scattered with a few economists and Oxbridge PPE's.

When the Inland Revenue (not HMRC) was at its best (1980 through 1996) then it was primarily managed by those who had risen through the ranks. This meant that those in charge had a high level of competence in at least some aspect of HMRC's day-to-day work.

With the transformation from the Inland Revenue to HMRC (introduction of Self Assessment, Tax Credits, dreadful merger with HM Customs, incorporation of Contributions office into main body of HMRC, NIRS-2, etc.), all of the expertise has been pensioned off (actually worse - many have gone from gamekeepers to poachers).

We now have an organization that has very limited in-depth understanding of different taxes on the front line. Matters often have to get escalated to a senior Inspector before being put in front of someone who actually understands the tax code rather than just reads from a script or HMRC manual.

The majority of the management at HMRC nowadays appear to be "Professional Managers" that probably couldn't do a tax return to save their lives.

I bet both Strathie and Hartnett have their own accountants do their tax return.

Totally agree. OTS and WT are simply starting from what we have got and tinkering.

What really surprises me is that with all the brains the Government have to call upon nothing positive is forthcoming. This leads me to believe that Governments like the cat and mouse games and if things go wrong they can blame tax evasion etc. If things were simple who could they blame when things go wrong?

So until a politician with a bit of umph comes along we are doomed to tinkering. I wonder how Gorby felt when he dismantled the USSR?

I bet both Strathie and Hartnett have their own accountants do their tax return.

Posted by frustratedwithhmrc on Fri, 06/05/2011 - 11:14

And I bet they claim his fees on expenses.

Not all accountants are men (although, lets face it a pretty high percentage are).

The tax code aside, the main organisational failing to me seems to be the production line approach with each individual only knowing about a fraction of the whole and with zero feedback.  If HMRC was a factory we would have people like in the 1970's banging the same bit of metal down all day, with no appreciation of how far it ought to go as they have never worked in the next stage of the process, and quite frankly not caring. 

The complete lack of feedback means that its very hard for staff to learn about how to do their job, and how what they do interacts with the next process.  Its no wonder we complain about staff knowledge when there is no realistic way of them gaining it through expereience. Something has gone badly wrong when the users know more about the process than the workers in that organsiation.

The answer is well documented - it lies in small teams dealing with a broader range of work, and able to speak with more senior colleages about issues, and follow through client issues from one stage to the next.  That way minor issues are nipped in the bud and learned from rather than becoming protracted issues.   Currently the main incentive for a phone operator is to get the 'customer' off the phone as quickly as possible so an operation has 'dealt with' more calls.  HMRC could learn a lot from well documented approaches that motor manufacturers have made on how they deal with repetitive processes, low morale and low quality output. Its not that hard, but it invovles grass roots dealing with people rather than relying on big expensive computers to do all.

I would suggest that HMRC try fixing just one problem - say PAYE first, when that is correct go to the next  There just are not the resorces or will to do it all at once.  Whist the fix is going thru the ideas put by other posters could be implemented.

Trying to fix it all in one go will never work.

Lets start by encouringing HMRC to call taxpayers what they are taxpayers and to statrt to remove the corporate management speak they have adopted.  HMRC staff should then be trained in exactly what a civil servant is and the role of the civil service, certainly not in Toyota production line techniques.

Lets start by encouringing HMRC to call taxpayers what they are taxpayers and to start to remove the corporate management speak they have adopted.  HMRC staff should then be trained in exactly what a civil servant is and the role of the civil service, certainly not in Toyota production line techniques.

A major problem is there is no contact, instead we have call centres staffed by call handlers with minimum experience.  They cannot transfer the calls to staff working the case, so they send an email which stacks up with the other work.

There was a time when Revenue staff were responsible for specific taxpayers.  They did the work, wrote the letters, took the calls.  Their names were on the letters as were their telephone numbers (it was like we knew where they lived).  Revenue staff took a pride in having proper training.  Now they are non-entities in customer services groups.

The people at the top have no idea what the problem is because they are constantly writing new plans for management.  It went from tax offices to the Douglas Bader type big wings based on counties.  Then it went from vertical organisation to horizontal (or is it the other way, I do not do management speak) Large and Complex businesses, Customer Services and call centre for the great unwashed.  The cult of management is that you must be seen to be doing something even if it is drilling holes in the life boats.  The culture of management is managers do not need to know anything about what they are managing as long as they can draw up but not implement a plan for managing it.

No one deals directly with the public, all accountants get is a slightly higher grade call handler.

As for what is to be done, any reorganisation would make matters worse in the short term but so would the lack of it.  If you do not rebuild the legislation from ground up, separate the direct tax side from the indirect tax side and put NIC to a different department.  You could call the direct tax side something like Revenue, the indirect side Customs and the NIC bit Contributions Office. 

Then you could abolish NIC and reflect the adjustment in other direct taxes.  You could get the Conservatives to introduce this; the Liberal Democratess would get the blame; Labour could tut-tut and stand back.  Then after the inevitable return to two party politics, the NIC elepant in the room will have gone with neither party taking the blame for having put the dear old tusker out to grass.  It's not the answer but it's a start.

For years now I have thought that it must be HMRC that is the root cause of the problem and that by letting it fail we can then pick it up and rebuild it better.

However its not HMRC that is the problem, it is Government (and i'm not talking about the puppet politicial parties). Having recently dealt with the Insolvency Service, who seem to be exactly the same as HMRC and following a discussion with an independant benefits advisor, the benefits system adn DWP are axactly the same.

So my feelings are that all government organisations (except Companies House who now seem to be adopting similar models) are moulded from the same policy makers. It is them that are the root cause of the problem. Link this with the current thinking (last 20 odd years) of profit centres not cost centres and we now link with capitalism (be it taxes or workforce).

It is extremely difficult to make an organisation work with no investment, but this is what the UK government wants to do with its organisations and then wonder why they seem to not operate effectively. Lets be fair to its staff, their hands are tied, however they should all be professional and if (as is in my circumstances as accountant and auditor) they consider that the system they work in is not suitable and not fit for purpose, they should resign their positions.

I agree you need to start somewhere.  Unfortunately the present culture would be to form a committee to discuss where to start, then form half a dozen task forces to report back, after which a sub-committee would rank all of the reports for discussion.

This is why in business you have directors and managers.  The former have to make decisions to drive their businesses the latter are there to provide inertia.  Newton got it right the object in motion (the business) reminas in motion unless acted upon by an outside force, whereas the object at rest (bureaucracy) remains at rest ulness acted upon by an outside force.

Speaking as both accountant and ex member -mostly they are not accountants .   Undelayed by any material experience of the tax system and delightfully unencumber by professional qualifications the senior civil service  is the world leader in producing incompetent management.   HMRC are no exceptions   Add in pseudo activist trade union  representatives who hide his/her limitations in trade union duties, when  the inevitable promotions follow (because of his/her "leadership qualities" ) the stage is set for a further infusion of useless toerags.

HMRC has enormous financial resources there is no excuse for the present shambles other than downright bad management and ineffective parliamentary supervision

I'm staggered that Strathie and Hartnett just continue to sail on, completely ignoring the mayhem in their wake. And seemingly immune to anything resembling consquences. As things get worse and worse, all they do is continue to rack up the minor honours and business lunches. Yes Dave, I am looking at you. As you deftly slide the bill away from your side of the table. Again.

An Accountingweb Medal of Honour is waiting for the first member to do a run-out and ditch him with the bill. Abuse and universal loathing obviously have no effect whatsoever. Just have to hit him the only place he understands...

I am certain they are not oblivious to the collapse. That would over-generously imply stupidity, instead of studied, cynical indifference.  

Not sure whether that was Gordon Brown or David Cameron.

Either way, someone needs to start wielding a big stick over at HMRC Towers (courtesy of Mapely STEPS). Yes Mr. Dave Hairnet - We haven't forgotten about HMRC's dodgy PPP deals with a company based in a tax haven.

http://news.bbc.co.uk/2/hi/business/2263208.stm

What do you think we are? Idiots?

After years of consistent failings and making life miserable for taxpayers and their agents it is time to shut the HMRC organisation down completely sacking every member of staff. We then start with a clean slate whereby Professional Tax and Accountancy bodies should be called in to interview and recruit staff for the new replacement organisation. Only tax qualified people need apply. Professional Tax and Accountancy bodies need to be given the power to raise fines upon HMRC for errors and procrastination and those fines should be paid from the HMRC payroll, not the public purse. 

that Government think, basically, there is nothing wrong with HMRC otherwise it would say so. All it says is that there are a few problems that need ironing out.

There is no way that tax professionals or politicians should run HMRC. They should be totally independant. Accountants and Tax Officers should spend at least a year as a job swop as part of their training.

I really don't know why we bother having a moan-up or even presenting ideas because nothing will change until HMRC finally collapse and the coffers become bare. I give it 2 years max.