'Solving' HMRC

Should it be contracted out?

Didn't find your answer?

Maybe not the collection of tax, but the assessment side. And the phone lines.

What if... every business had to have an accountant, but the accountant was funded by the state?

Secondary muse: If you were paid by the state, would you take the same 'filing positions'? What might happen to the UK's tax take?

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By Matrix
20th Feb 2024 08:02

Would we earn commission on the tax collected?

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Replying to Matrix:
By ireallyshouldknowthisbut
20th Feb 2024 09:07

Ive been saying for years if I could get 10% commision for recoveries on tax investigations I would jack this in and make millions.

Be a doddle to find a lot of cash, just locally by keeping my eyes open, let alone with HMRC's data to cruch. Handwash carpark anyone? "Cash only" sign on the resturant? "you have 2 kids in private school and earn £20,000 a year?" etc etc etc. Id probably hit landlords as its my main area. Easy to chase through the small adds and cross reference to returns, not to mention just cross reference agents statements and tax returns.

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Replying to ireallyshouldknowthisbut:
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By Justin Bryant
23rd Feb 2024 11:35
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VAT
By Jason Croke
20th Feb 2024 08:47

Contracting out might help in streamlining some of the entirely pointless processes that HMRC build into their interactions with taxpayers and agents.

Email, universally accepted form of communication and yet for HMRC, they resist giving out email addresses. When an agent is dealing with a tax enquiry HMRC insist on all parties signing a "we accept that emails are insecure and basically one of our Officers might steal your data for nefarious purposes" disclaimer. That is like 20 minutes of everone's time wasted just trying to send an email, let along anything with an attachment.

If you want to send using secure DropBox, oh you have to wait 48hrs for that to be set up and then you have only 24 hours to use it before it is shutdown.

Then the whole debacle with 64-8 and agent authority, we're an authorised agent, we file tax/VAT returns via our agent gateway, HMRC knows this as the client has digitally assigned us as the agent, but if you want to do an option to tax or VAT group you need a separate client authority.

All of these pointless protocols under the auspices of "to prevent fraud" and yet fraud goes on right under HMRC's nose all the time.

This is the sort of thing private sector does well, using AI or even just basic logic to streamline the customer front end. For a department that pushes the digital agenda, HMRC is the least digital friendly.

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By ireallyshouldknowthisbut
20th Feb 2024 09:03

All the happens with contracting out public services is they just charge 3 times as much for a worse service.

There is even less incentive for a third party to care about their service levels, and just "work to target". in may ways the current leadership is operating like a contracted out servce - ie they just dont cae and fiddle their targets. There is no reason to suppose with a profit motive that would improve.

Contrating out only really works when there is a proper market and competition. Now if we have a *choice* of competing systems to use, and each service was paid on a results basis, now there would be a plan. Eg if I could call A, B, or C to get my tax repayment, id call the one who got it fixed first time and didnt keep my hanging on the phone. However.........fraud! So tricky.

As for being paid by the state.....it its anything like dentists, id not want the work and only accept private appointments. I would then only be working for wealthy clients who could pay me, and we could then pass to an "approved" cruncher to just stuff the numbers over to HMRC for the £25 a return of whatever they would pay.

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By taxdigital
20th Feb 2024 09:08

Well, the tax landscape is hugely and unnecessarily complex and is unlikely to change any time soon. Given this backdrop, in my view, HMRC made a strategic blunder by opening its doors to anyone and everyone to contact them without looking inwards at the resource levels available. Post financial crisis of 2008 then there was this double whammy: budgets got cut and as population aged their staff retired with no replacements in sight.

To get in to HMRC’s way thinking all you need to do is look up s.272 FA 2008 (albeit in a limited context though) which says “tax adviser” means a person appointed to give advice about the tax affairs of another person (whether appointed directly by that person or by another tax adviser of that person). So ‘pub advisers’ at least in theory are ‘tax advisers’!

To fix the current mess my wish list would be as follows:

a) Expand the ADL line with additional staff and other resources in place. Encourage the taxpayers to speak to their accountants or advisers (I know this goes against HMRC thinking). Fund tax charities to employ accountants to help out those who can’t afford to pay. This may be a better answer to having ‘State’ accountants.

b) As it’s public money (with Bounce Back Loan leakage risks), get all S/EIS, R&D relief etc certified by a qualified tax agent/adviser.

c) Go back go the original HMRC’s tax agent strategy of giving greater access to HMRC records.

d) Communicate through e-mails; with all sorts of encryption available this shouldn’t be too difficult.

e) Get all the staff back in their offices – enough of pets getting in to tax talks!

f) Stop this nonsense of having to listen to your boring music for hours: let people leave their numbers behind and call them back. The consensus though is that the questions put to their call centre staff are way above their pay grade!

Its election time – make all the noise.

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Replying to taxdigital:
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By taxdigital
20th Feb 2024 09:22

Correction FA 2014

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DougScott
By Dougscott
20th Feb 2024 09:14

What, like the Post Office?

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paddle steamer
By DJKL
20th Feb 2024 09:32

Of course, lets have Tax Farming.

Basically the parties tender for each province, pay the state the tendered sum then collect in taxes to more than cover the sum expended. Of course Roman tax farmers were not very popular and had to go around with a pack of minders, but it is certainly a way to outsource and I am sure Private Equity ion the UK will embrace the tendering process.

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Replying to DJKL:
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By adam.arca
22nd Feb 2024 20:05

+1

As a fairly keen amateur historian, I’ve stumbled across many references to this over the years and it is always portrayed as A Very Bad Thing.

Given how far in the mire HMRC have sunk and how much tax is left uncollected, I do seriously wonder if there might be a role for tax farming. Maybe not in terms of assessment but certainly in terms of the collection. It could even work in accountants’ and taxpayers’ favour by forcing HMRC to process more quickly so that the tax farmers would know how much to collect!

Anyway, moving onto my next fantasy....

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By FactChecker
20th Feb 2024 14:00

In my usual cynical way, I detect (or think I do) a hidden 'connection' between TD's two questions ... along the lines of:
There often appear to be two contrasting types of responder/agent on here - those who are primarily focussed on what is 'correct' (and only then on how to calc/report the tax), and those who are predominantly focussed on minimising the tax payable (and therefore seeking guidance/legislation to justify their conclusion as compliant).
In an ideal world of course the two would reach the same conclusions ... but it's not (an ideal world) and they rarely do.

If I'm putting words in TD's mouth (or even wrongly attributing thoughts) then I'm happy to apologise ... but it's an interesting catch-22 as it is, and would become far more so in the event of the proposed contracting-out by HMRC. Putting it bluntly ... who would be your (the accountant's) client to whom you owe primary allegiance?

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Replying to FactChecker:
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By FactChecker
20th Feb 2024 14:13

My personal take is that, despite being a lover of logic and systematic procedures, I recognise a need that remains a blind spot within HMRC ... the need for coping with, and even helping, other human beings.

I'm not about to propose some clever way to increase efficiency within HMRC itself (or of its public-facing processes), but nothing will truly change there until *after* they've undergone a corporate personality change.
The inherent 'control freakery' has to be eradicated as a default baseline, along with its 'never admit anything' mantra and consequent lack of resources to investigate failings (which I'd be happy to re-name 'apparent inconsistencies')!

I know that these are 'soft' issues, but without tackling them (which isn't easy in an organisation of that size) any 'hard' solutions will continue to founder on the same loose foundations.

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By PennyPincher
22nd Feb 2024 19:39

HMRC have a contract for about £2 million with Croner to use their resources etc - not sure if this also includes their advice line

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