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Consultations: You don’t know what you’ve got ‘til it’s gone

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Wendy Bradley believes the government isn’t listening to taxpaying citizens and it doesn’t want to hear their views on any proposed changes to tax policy.

29th Jul 2021
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The government isn't interested in your views on the changes to basis period - or on anything else for that matter.  

This shouldn't come as a surprise: Oliver Letwin gave the game away in 2012 in evidence to the House of Lords Select Committee on Secondary legislation (see page 3 of the transcript) where he explained that, if you want your views known, you should write to your MP. What the government wants from a consultation is confirmation that everything works as intended. It's fact checking.

Why does government consult at all?

If all it wants from consultation is fact checking, you may ask, why do they consult at all?

The answer lies in the legal concept of "legitimate expectation". Previous governments have said they will consult, have set out rules for how they will conduct their consultations, and a reasonable person would expect that to continue. But no government can bind its successors, so all the government would have to do is send out the relevant minister to answer a question or make a statement saying consultation is no longer necessary and, hey presto, legitimate expectation of consultation would be gone.

Imagine what the press would make of them if they did that.

Changing the rules

To avoid effective consultation the government is updating its own rules: modernising, reforming and making consultation digital. All the euphemisms are there, and the results are exactly what you would expect. You don't know what you've got till it's gone.

Basis periods consultation

The consultation on reforming basis periods says that it is being conducted in accordance with the five stages of tax policy development and that this is a second and third stage consultation. These stages come after the policy objective and the options to achieve it have been determined.

The basis period consultation is thus only about choosing the best alternative and, simultaneously, looking at the draft legislation which embodies the "best" alternative the government is recommending.

The executive summary tells us: “The government has engaged with a cross-section of stakeholders representing a wide range and size of businesses, in a variety of sectors, in order to establish initial impacts and is now seeking detailed views on the proposal.”

Who was asked about the policy?

Which bodies were included in this "cross-section of stakeholders"?

Have a look at the government's consultation on Reforming the framework for better regulation. Here we get to the heart of the removal of the legitimate expectation of a public consultation on new regulation.

The idea seems to be that in future, consultations will be conducted after policy objectives have been set and favoured options decided. There may be a ring around of the “major stakeholders” but we won't know who they are or what they said. The government's plans will arrive fully formed as the best of all possible options for us to copy edit and check.

Missing voices

The citizen, the ordinary taxpayer, does not appear in this consultation process at all.

I realise that the ordinary taxpaying citizen is rarely going to check the gov.uk consultations page and engage with public consultations in the first place, but the requirement to publish and to consult formally was a useful way of allowing ALL voices, not just the friendly magistracy known to the government, to look at what was proposed.

The government's consultation principles used to be a book, or at least a substantial pamphlet. They were updated in 2018 to one sheet of paper , which states at point B:Consult about policies or implementation plans when the development of the policies or plans is at a formative stage. Do not ask questions about issues on which you already have a final view."

This may have been honoured more in the breach than the observance, but I fear we are now moving to a world where the awkward questions are not to be asked at all.

Replies (31)

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By Winnie Wiggleroom
30th Jul 2021 10:02

Nothing new there at all, this discussion has been had on here already - when HMRC/Gov really want to have a proper discussion where they listen to the view of the profession/public we will be ready and willing.

Until then, we will continue in this downward spiral, where our workload increases as we try to work with policies that are dreamt up by graduates in social sciences with no real world experience.

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By Nebs
30th Jul 2021 10:09

HM must be really embarrassed about what RC are doing.

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By PK Busness Services
30th Jul 2021 10:10

The government has never listened to anything anybody says that's a fact
Look at MTD what a nightmare this is going to be HMRC creaking infrastructure cant cope with the end of year rush to file tax returns now they re suggesting doing it 5 times a year and what for so that HMRC can bully people mostly the unrepresented into making unnecessary payments that they wont get back if they are found to be overpaid the changes to the basis system is just a joke (isn't it) i am old enough to remember the fun and games of 1996/97 when they changed the system from previous to current year basis the government should tell HMRC to basically forget any pie in the sky schemes such as MTD and get back to basics such serving the public and stop delaying clients refunds for months on end blaming everything under the sun if HMRC was a private enterprise it would have gone out of business long ago some of the staff should learn some manners at least and maybe even learn how to do their jobs if we treated our clients like HMRC treat everyone how long would we have stayed in the profession never mind in business

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By Rgab1947
30th Jul 2021 10:19

I am getting depressed.

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By taxfellow
30th Jul 2021 10:23

Yes, this sort of 'consultation' is rightly referred to as 'insultation'. The rot set in back in 2010 when George Osborne introduced de facto yield targeting for HMRC - saying basically if you don't make a sufficient return on what you're being given then the money has to be found somewhere and jobs will go. A crass error of judgement. The result has been a steadily-increasing stream of thinly disguised revenue-raising measures where HMRC scares the pants off the FST and pushes through illiberal and punitive legislation with little or no real consultation. There is a real need for an independent person at the table to test and challenge HMRC's assertions, but that will be a long time coming. Yield targeting also relates not a little to why it is so hard to negotiate with HMRC - yield is recorded when a case is settled, not when the final result is known after Tribunal, which gives HMRC caseworkers little or no incentive not to go for the maximum claim, sustainable or not, every time. A sorry state of affairs.

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By ireallyshouldknowthisbut
30th Jul 2021 10:24

Its the Brexit mentality - just bulldozer through, don't worry about the objections and individual consequences, look at the dream, even if the dream is fake, just look at the dream, keep looking at the dream, never question the dream. Everything is worth it for the dream ending. (Which clearly cant be delivered)

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Replying to ireallyshouldknowthisbut:
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By Beef curtains
30th Jul 2021 12:01

A majority of those voting voted to leave the political prison of the E"U".

No one has ever voted in support of the crazy progressive tax system we're saddled with.

Almost seventy years ago a (subsequently ignored) Royal Commission said:-

“that there is so much tax evasion is clear evidence that it is the system,
not the taxpayer, that stands in need of reform”
The Royal Commission on the
Taxation of Income and
Profits 1955

The only innovation we ever see is in the operation of the existing system, such as the loading of cost onto the taxpayer through the introduction of “Self Assessment”, “online filing”, MTD and suchlike balls. That sort of irrelevance does nothing to encourage the development of our economy.

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By johnjenkins
30th Jul 2021 10:41

Sorry Wendy, but this article tells us what we have known for years. There is a movement amongst Accountants that we do not advise or let HMRC know our views, certainly not have any consultation with them, and just let them stew in their own mess until the Government actually realise our worth.
Then again footballers can earn £400k a week and people who save lives on regular basis only get a pittance. Says it all about our social standing.

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By Ajtms
30th Jul 2021 11:18

I think you are right Wendy. It is time for every one of us and our clients to write to our MP's and also write to the leader of the opposition. It is only by enlightening MP's to both this very damaging Basis Year change and also the consequences of MTD that things can change. When we write, we can naturally also quote the recent HMRC failures with 30 day property reporting to demonstrate that the dreamers in HMRC will keep coming out with unworkable schemes until Parliament puts a stop to it. At a time when our economy is on its knees, now is not the time to experiment with utopian ideologies.

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By Beef curtains
30th Jul 2021 11:47

Wendy Bradley "believes the government isn’t listening to taxpaying citizens and it doesn’t want to hear their views on any proposed changes to tax policy".

Just who, in Christ's name, believes that it does??

"Consultation", to civil service trouser polishers high and low, means giving you the apparent opportunity to let off steam, which will be dutifully noted and wholly ignored, and then doing what they have already decided to do.

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By sammerchant
30th Jul 2021 11:47

The strange thing is that, no matter the weight of opinion against their proposals, HMRC just go blindly ahead. 'Twas ever thus. I remember that St Gordon (he of the Brown) believed he walked on water and his innovations, only some of which were reversed (anyone remember that the first £10,000 of profit for CT was at 0% rate for a few years?) have left us with a legacy of inefficiencies, the primary one of which is that no individual within HMRC has 'ownership' of a case, leaving no-one responsible. "It wasn't me, guv" is an easy get out excuse. Your letter/phone will be dealt with by a different person each time, who will get it wrong 90% of the time.

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Replying to sammerchant:
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By Hugo Fair
30th Jul 2021 12:08

The only surprise is Wendy's tone of injured disbelief ... and it's not just "HMRC (who) just go blindly ahead." It's endemic in local govt as well.
It was nearly 40 years ago that my local council (Hammersmith) had a consultation on the planned introduction of Residential Parking Permits ... which generated a substantial majority against the idea. But no problem, the council decided that those (probably) in favour of it had 'not been reached', so they went ahead anyway!

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Replying to Hugo Fair:
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By mumpin
30th Jul 2021 13:41

Wasn't it Hammersmith Council who bet the farm on interest rate swaps and lost?
And then had to get a judge to say that their actions were ultra vires...

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Tornado
By Tornado
30th Jul 2021 11:52

I think the only solution to this is to come out on strike or at least not play the Government's little games. HMRC are already incompetent and this can only get worse, (assuming there is something worse than incompetent). The trick is to make sure that you are well out of the way when it all collapses.

The White Paper on why we need a new way to run our Railways (The Great British Railway) and the damning assessment of Network Rail and the way it is run (which is almost unbelievable) is shocking. I can see many parallels in this White Paper with the way that HMRC is run and I think perhaps the real problem in our Industry is HMRC itself and that is where the reforms should be, not in ridiculous projects like MTD.

I am sure that many will agree with me that the Self Assessment system in principle works well and all that was required was to ensure that this was updated and refined rather than spending £Billions on new ideas that create more problems than solutions.

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Replying to Tornado:
By Nick Graves
30th Jul 2021 12:35

I used to think that a 'taxpayers' strike' would bring them to their senses. But with Modern Magic moneyTree thinking, they'll just print more credit and swap more bits of e-paper.

All this complexity is really a distraction-technique so that people don't really notice what's actually going on.

If they haven't already crushed every small business by the time MTD happens, they'll soon get the promised 'strike' - people might try to comply, the system will repeatedly crash/go wrong and then nobody CBA to comply any more after that.

I'm sure HMRC will spin it as a Glorious Success in the Revolution anyway, despite the Whtehall farce ensuing.

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Replying to Tornado:
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By sammerchant
31st Jul 2021 17:21

Some of us hoped that the creation of the Office of Tax Simplification would actually do what it was supposed to do. Considering that it came into being on 20 July 2010 - a mere (!) 11 years ago, I am at a loss to point to any of their achievements as significant.

I would suggest that those of us accountants who deal with smaller clients who would be most affected in terms of costs, penalties and sheer stress should set up a rival organisation - how about Accountants for Tax Simplification (or some such - I am open to suggestions).

Our group would highlight the existing problems and those that we foresee arising. We would speak from experience and not by working from a concocted scenario where everything slots in without any hitches.

We could point out the cost in human effort and time (all in terms of fees) that the pell-mell promotion of MTD for SA will have on the smaller taxpayers. It should be clear to the meanest intellect that the threshold of £10,000 for coming into the system is simply too low.

If there is a real taste for this, could some readers offer themselves as the founders; I am too long in the tooth to take on the task, particularly as I might consider retirement in the foreseeable future.

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Replying to sammerchant:
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By Winnie Wiggleroom
31st Jul 2021 18:52

sammerchant wrote:

If there is a real taste for this, could some readers offer themselves as the founders; I am too long in the tooth to take on the task, particularly as I might consider retirement in the foreseeable future.

Totally agree with you on all points, but your final statement highlights the reasons why this would never work, no sane person would take this on, why would they? OTS, PBs none of them have made any difference

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Replying to Winnie Wiggleroom:
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By sammerchant
01st Aug 2021 11:59

You have to be a bit insane when dealing with HMRC - so many of their diktats make no sense whatsoever.

The only other option is for all agents to go on strike.

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Replying to sammerchant:
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By johnjenkins
02nd Aug 2021 09:04

Or ask Nigel to form a "Tax Reform" party.

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By djtax
30th Jul 2021 14:44

I agree - HMRC senior personnel are not really interested in our opinions and actual experience here at grass roots level. I learned that the hard way a couple of years ago when I (and a couple of other AWeb members) were invited to attend the House of Lords Select Committee enquiry into the then proposed MTD for VAT. I was surprised at how universally negative were the opinions of all the committee regarding HMRC's proposals and at how damning was their final report. But all our efforts turned out to be a complete waste of time when HMRC simply dismissed and ignored the report's findings and recommendations.

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By Husbandofstinky
30th Jul 2021 14:50

Regardless of the pointless political BS with these consultations, the consultation letter turned up this morning for the change of year end to 5 April/31 March.

'45-60 minutes of your time and we will pay you £80 as a goodwill gesture'

Despite the pointless exercise and ignorance to the consultation process and results, it must cost the tax payer an absolute fortune for which ultimately there is no real purpose or benefit it would seem.

Stating the ridiculous obvious, seriously could this not be spent better elsewhere? More resources to HMRC would be a start if that spending had to remain within that part of the department.

It beggars belief with all that has been happening the past 18 months.

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Replying to Husbandofstinky:
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By Winnie Wiggleroom
30th Jul 2021 15:00

Husbandofstinky wrote:

'45-60 minutes of your time and we will pay you £80 as a goodwill gesture'

wait, what? already responded to the PB a few weeks ago, there was mention of any spondoolies

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Replying to Winnie Wiggleroom:
By Husbandofstinky
30th Jul 2021 16:26

Winnie Wiggleroom wrote:

wait, what? already responded to the PB a few weeks ago, there was mention of any spondoolies

1st page.

'What does the research involve'

2nd para, last sentence

'As a gesture of goodwill for your time in taking part in an interview, you will receive £80'

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By Paul Crowley
30th Jul 2021 16:17

This has nothing to do with MTD
It is a once of collection of tax by a bankrupt HM Gov
Bankruptcy of ideas and consequences is nothing new

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By bluebaron
30th Jul 2021 17:31

Consultations in name only. HMRC decide what they want to impose on tax payers & accountants then steamroller it through no matter what the strength of opposition to their latest master plan. MTD for example.

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By GHarr497688
30th Jul 2021 20:33

My first job was back in 1979 - HMRC are now no longer fit to make any decisions. The shamble of stupid rule makers will come to light once MTD proves to be a disaster with the tax system in chaos. This system was flawed from the start - it it wasn't why did HMRC change the original idea of how it worked. They listen to no one and do as they like !

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By Marlinman
31st Jul 2021 08:49

They've never given a toss about what anyone thinks. Whoever gets elected is controlled by those who control the money supply and they employ spin doctors to dream up excuses to hide the real reasons for their actions.

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By Open all hours
31st Jul 2021 17:47

Wrote to my MP re concerns on basis periods. Reply was a Two Ronnies tribute - he answered the previous MTDVAT question from 2019.
Hoping to bring him up to date during the parliamentary recess.

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By Michael C Feltham
31st Jul 2021 19:23

Government (And more critically HMRC) didn't listen to either the Lords Select Committee on MTD: they didn't listen to ANY of the meaningful respondents (Including myself, and my practice were noted and thanked on the post response request web page).

Such calls for response are simply a whitewash job; their tiny minds are made up well before any request is published.

The whole time and tax revenue wasting process is held simply in order that thereafter, when it all goes pear shaped, they can scream "But we were were democratic! Aren't we good!"

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By Ammie
02nd Aug 2021 09:25

The least HMRC and HM Government listen and sensibly discuss the proposals with those professionals which they will need to rely on for effective fulfilment, the more resources and "U" turns they will need and make to get the changes running smoothly.

Good luck to them and god help them!

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By Pam Moreland
04th Aug 2021 08:34

I so agree. 50 minutes on the phone to try to speak to VAT Debt Management (gave up), complaints in for three months with no reply, waiting eleven months (yes eleven) for replies to VAT surcharge appeals (another complaint), routine SA1's 'forgotten ' to process - the list goes on. Get the basics right and then try and improve or modernise. New CGT reporting system an absolute joke. Last week clients couldn't even register without a Northern Ireland driving licence (!). If MTD reporting is anything like this we might as well send in complete rubbish and then do exactly as we do now and tidy it all up for the final tax return. If they want quarterly payments just divide payments on account by four instead of two. Simpler, quicker and easier to understand without reams of rubbish being filed, none of which will ever be reviewed.

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