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Budget 2007: It's good to talk - HMRC issues new consultation framework. By Simon Sweetman

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22nd Mar 2007
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In the middle of all the Budget folderol HMRC has produced its new revised consultation framework. It arrived at this by consultation : a consultation which did not actually meet the procedures laid down for future consultations (but then they hadn’t been agreed yet). Not, you might think, a pretty start. Somehow consultation about consultations seem like talks about talks, as if the real thing was too far away to touch yet.

But (to spoil the fun) what has been produced is a very useful framework, and if this is to guide what happens in the future then we might have some more constructive discussions than we have sometimes had in the past. Admittedly the list of “recognised consultations” runs in decreasing order of formality almost down to setting out the rules for a quiet chat in the pub, but perhaps it is better to have these things set out clearly. It doesn’t include “we’re going to pretend to consult on this but in fact we’ve made our minds up”, which is what has given consultation a bad name at times in the past. There is in the document a horrid tendency to newspeak, and I nearly panicked there because I couldn’t remember the difference between Focus Groups and User Panels (I’d got used to being a stakeholder, even if it does sound like a bit part in a vampire movie, but am I a user of the tax system ?). Actually I still can’t, but I reckon I could bluff my way through it.

There are pointers in the Budget.

HMRC has listened to some of the doubts about the speed of the Carter proposals, and with the exception of ITSA (where there is no mandation proposed yet anyway) everything has been put back a year.

The new Management Act, which we were expecting to see introduced, has gone back for another round of thinking instead after people suggested that it was being rushed.

The reaction of the Professional Contractors’ Group suggests that people have been listened to on the subject of managed service companies and the proposed rules have been sensibly rewritten.

On the other hand it might almost be time to take the structure of the tax system (as distinct from the rates) out of the hands of the politicians. This Budget appears to do no damage: it looks as though most of the changes are in the direction of simplicity, and we can’t complain about that. And we’ve been given a year to sort ourselves out with most of them. But still it would have been useful perhaps to have discussions before the abolition of IBA and ABA: somewhere there may be someone whose business plans take these things into account (and a client of mine who copped a substantial IBA balancing charge a couple of months ago might feel grumpy about it). Why, after all, spend so long on the minutiae of capital allowances on cars but change the whole structure of allowances for plant and machinery in an instance?

What will happen to the consultation on domicile (strangely unmentioned) which appears to have been going on since 1948?

And – perhaps most important – what is the route by which we can open things up ourselves where we feel that there is a simpler way of doing them ? We could have consultations opened from this side of the fence. If Mirrlees produces good ideas, how are they best fed into the system?

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