To me, this looks like RTI for the self employed, sole traders and partnerships, with the added twist that HMRC can dip their fingers into people's bank accounts and take what they like.
If (as seems to be implied) it works so that when you hit the month end button, it automatically posts the figures to HMRC, does this mean that they'll be getting their tax receipts 18 months or so earlier than at present ?
More to the point, in the scenarios raybacker lists, where a business has inventory or other items which can throw in timing differences that distort a month's figures, I can see a situation where a business will show artificially large profits in (say) months 1 and 3, and a loss in month 2, but by the end of the year it'll have all come out correctly apart from a few pre-payments and/or accruals.
Will HMRC return rebates as rapidly as they take tax over-payments caused by this system ?
Perhaps next, HMRC will want all revenues directly paid to themselves, keep what they want and give employees and the self employed a bit of pocket money from what is left over....
Wouldn't it be easier for the banks to apply new sort codes to their newly hived-off investment arms, and keep the retail sort codes as they are ?
This just smacks of the banks trying to deliberately make life awkward for the public (i.e. the taxpayers whose billions bailed them out) as a bit of petty revenge for having their nice cozy arrangements broken up.
I agree that some businesses aren't viable and should be allowed to go under; that is a natural evolution and is how capitalism should work.
But RBS were destroying perfectly viable businesses by a variety of thoroughly dishonest methods. These methods may have been (borderline) legal, but the intent was short-termist and intended to cause deliberate harm.
Surely this is conspiracy to commit fraud at best.
I would hope that the further investigation Tomlinson has asked for will look closely at the impact on the business owners and their families. When a business is forced into liquidation (particularly a healthy business - these poor people must have wondered what on earth they'd done wrong !), the impact can be devastating in terms of both earnings and self esteem.
If information comes to light that there were any suicides because of this appalling behaviour by RBS and their appointed co-conspirators, I feel it would be justified to seek charges of corporate manslaughter. But I'm not betting on it happening, there are too many politicians with non-exec directorships at stake.....
What is missing from this is that interviewers should, although probably don't, look at the circumstances.
In my own case, I went from consistent first time passes with really good grades (sorry to blow my own trumpet - I'm normally modest, honest !), to a year where every exam was either a fail or a "just scrape through". An interviewer would probably consign me to the useless pile for that, but if they listened to the circumstances, they'd perhaps understand that a crisis at work leading to everyone working 14-16 hour shifts for the month before the exams, coupled with the cancellation of all holidays and study leave, might just have had an impact !
It's sad that in the current economic situation, there seem to be so many applicants for each job that interviewing becomes a converyor-belt box-ticking exercise for all but the final shortlisted applicants.
The draft papers I've seen so far (and they are draft, so things could still change) indicate that the Business Bank will be a wholesale operation. Actual distribution of finance will be handled by retail banks.
The problem I can see with this is that the retail banks will treat it just the same as previous government business finance initiatives. They'll carry on lending to small businesses at the same unaffordable rates as at present, with the same strict criteria and additional terms - personal guarantees, charges on personal assets etc. The retail banks will be getting the funds at a favourable rate, and will just use the extra margin they make to pad their balance sheets and carry on paying high bonuses to senior staff.
I hope that when detailed plans are released by the government that the potential for abuse by retail banks is addressed, but I'm not optimistic.
I completely agree with your points. I regularly have to use Excel-generated csv's to move data between systems, and know how frustrating it can be, and (in the past) have produced key reports and dashboards for a management team who clearly had no idea or interest in where it came from. It was quite amusing to me that they took so much on trust !
The issue as I see it isn't that using Excel is wrong, it's that an appropriate level of management oversight and checking is required to make sure that unforseen consequences don't arise as a result of errors that are relatively minor, but have a way of snowballing up as layer upon layer of formulae and macro's get to work on them.
Excel is a fabulous tool, but not always the best one. It is essential that the amount of validation and checking of the output should bear some relation to the values being worked on.
Just ask Mouchels - a decimal point error by an over-worked junior employee wasn't spotted by management (who obviously didn't apply a bit of basic sense-checking). It forced a re-statement of profits downward by several million pounds, with a significant impact on the share price and financial well-being of the company.
If the system relies on banks etc to submit information to HMRC to pre-populate the tax returns, how much will banks charge the taxpayer each time they request a re-submission to correct an error by the bank ? Who would foot the bill if HMRC decide that a change to information submitted by a third party should be the trigger for an investigation ? (Yes, that second one is a rhetorical question....)
More worryingly, what do HMRC propose to do to solve the inevitable security problems created by multiple third parties (and therefore their staff, who may or may not be security cleared) having access to taxpayer records ? The record of government departments when it comes to looking after personal data is pretty poor. This is all the kind of information that would be an ID thief's dream; from the submitted information, it wouldn't be hard for them to find your NI number, who you bank with, how much you've got in which account numbers, where else you've put all your assets, where you live etc.
My answers
RTI on steroids for small businesses
To me, this looks like RTI for the self employed, sole traders and partnerships, with the added twist that HMRC can dip their fingers into people's bank accounts and take what they like.
If (as seems to be implied) it works so that when you hit the month end button, it automatically posts the figures to HMRC, does this mean that they'll be getting their tax receipts 18 months or so earlier than at present ?
More to the point, in the scenarios raybacker lists, where a business has inventory or other items which can throw in timing differences that distort a month's figures, I can see a situation where a business will show artificially large profits in (say) months 1 and 3, and a loss in month 2, but by the end of the year it'll have all come out correctly apart from a few pre-payments and/or accruals.
Will HMRC return rebates as rapidly as they take tax over-payments caused by this system ?
Perhaps next, HMRC will want all revenues directly paid to themselves, keep what they want and give employees and the self employed a bit of pocket money from what is left over....
Wouldn't it be easier for the banks to apply new sort codes to their newly hived-off investment arms, and keep the retail sort codes as they are ?
This just smacks of the banks trying to deliberately make life awkward for the public (i.e. the taxpayers whose billions bailed them out) as a bit of petty revenge for having their nice cozy arrangements broken up.
Perhaps we could agree a deal with them.
We'll scrap zero rates the day after independent auditors sign off the EU's accounts. That should keep food zero rated at least for my lifetime.....
This isn't capitalism.
This isn't capitalism.
I agree that some businesses aren't viable and should be allowed to go under; that is a natural evolution and is how capitalism should work.
But RBS were destroying perfectly viable businesses by a variety of thoroughly dishonest methods. These methods may have been (borderline) legal, but the intent was short-termist and intended to cause deliberate harm.
Fraud or worse ?
Surely this is conspiracy to commit fraud at best.
I would hope that the further investigation Tomlinson has asked for will look closely at the impact on the business owners and their families. When a business is forced into liquidation (particularly a healthy business - these poor people must have wondered what on earth they'd done wrong !), the impact can be devastating in terms of both earnings and self esteem.
If information comes to light that there were any suicides because of this appalling behaviour by RBS and their appointed co-conspirators, I feel it would be justified to seek charges of corporate manslaughter. But I'm not betting on it happening, there are too many politicians with non-exec directorships at stake.....
Look at the cicumstances
What is missing from this is that interviewers should, although probably don't, look at the circumstances.
In my own case, I went from consistent first time passes with really good grades (sorry to blow my own trumpet - I'm normally modest, honest !), to a year where every exam was either a fail or a "just scrape through". An interviewer would probably consign me to the useless pile for that, but if they listened to the circumstances, they'd perhaps understand that a crisis at work leading to everyone working 14-16 hour shifts for the month before the exams, coupled with the cancellation of all holidays and study leave, might just have had an impact !
It's sad that in the current economic situation, there seem to be so many applicants for each job that interviewing becomes a converyor-belt box-ticking exercise for all but the final shortlisted applicants.
Doesn't address affordability of finance
The draft papers I've seen so far (and they are draft, so things could still change) indicate that the Business Bank will be a wholesale operation. Actual distribution of finance will be handled by retail banks.
The problem I can see with this is that the retail banks will treat it just the same as previous government business finance initiatives. They'll carry on lending to small businesses at the same unaffordable rates as at present, with the same strict criteria and additional terms - personal guarantees, charges on personal assets etc. The retail banks will be getting the funds at a favourable rate, and will just use the extra margin they make to pad their balance sheets and carry on paying high bonuses to senior staff.
I hope that when detailed plans are released by the government that the potential for abuse by retail banks is addressed, but I'm not optimistic.
gfeechan & Eric,
gfeechan & Eric,
I completely agree with your points. I regularly have to use Excel-generated csv's to move data between systems, and know how frustrating it can be, and (in the past) have produced key reports and dashboards for a management team who clearly had no idea or interest in where it came from. It was quite amusing to me that they took so much on trust !
The issue as I see it isn't that using Excel is wrong, it's that an appropriate level of management oversight and checking is required to make sure that unforseen consequences don't arise as a result of errors that are relatively minor, but have a way of snowballing up as layer upon layer of formulae and macro's get to work on them.
Potential Risk
Excel is a fabulous tool, but not always the best one. It is essential that the amount of validation and checking of the output should bear some relation to the values being worked on.
Just ask Mouchels - a decimal point error by an over-worked junior employee wasn't spotted by management (who obviously didn't apply a bit of basic sense-checking). It forced a re-statement of profits downward by several million pounds, with a significant impact on the share price and financial well-being of the company.
If the system relies on banks etc to submit information to HMRC to pre-populate the tax returns, how much will banks charge the taxpayer each time they request a re-submission to correct an error by the bank ? Who would foot the bill if HMRC decide that a change to information submitted by a third party should be the trigger for an investigation ? (Yes, that second one is a rhetorical question....)
More worryingly, what do HMRC propose to do to solve the inevitable security problems created by multiple third parties (and therefore their staff, who may or may not be security cleared) having access to taxpayer records ? The record of government departments when it comes to looking after personal data is pretty poor. This is all the kind of information that would be an ID thief's dream; from the submitted information, it wouldn't be hard for them to find your NI number, who you bank with, how much you've got in which account numbers, where else you've put all your assets, where you live etc.