Gauke: We are listening to advisers

David Gauke
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Financial secretary to the Treasury David Gauke has been in post since 2010 and during that time he has nailed his colours to the mast of HMRC’s digital strategy.

So much so that this week he hosted a software conference to set out the department’s open application development strategy to encourage a new generation of third party programmers to link into HMRC’s systems. As part of a series of media interviews this week, he talked with AccountingWEB for 10 minutes on Thursday about the latest developments.

Given HMRC’s chequered track record when it comes to technology projects, it’s quite a surprise to see a senior politician taking such a close interest in the nuts and bolts of tax data processing, and Gauke has been doing so since he previewed early prototypes of the personal tax dashboard in 2011.

“I don’t bring technical expertise on my own behalf, but it struck me quite early on doing this job that the tax system really does need to move in to the 21st century. In an environment where 16m people have online bank accounts, the case for online tax accounts is very strong," he said.

When he first took up his position five years ago, the personal tax account was in the early planning phase. “Now we’re starting to see it move quite rapidly,” he said, pointing out that 3m individuals and businesses now have online tax accounts. There are other real benefits in making the tax process easier - particularly for small business, where it’s quite time-consuming.

“If people have the ability to do [their taxes] on their laptop or smartphone, then we can make the whole interaction with the tax system much easier. It won’t be enjoyable, but we can make it less painful. If the tax system is easy to comply with, more people will comply and more money will come in.”

Monday’s software meeting was mainly a rallying call to encourage software developers to pick up and run with the data HMRC will be making available. Admitting that HMRC did not have a monopoly on innovation and wisdom, Gauke said that 75% of all transactions submitted to HMRC were done with private sector software. By moving further in this direction, the API initiative was all about “improving customer service, ensuring choice, and making use of the creativity and expertise within the software industry”, he said.

But the path between software concepts and successful IT project delivery is treacherous. For all his encouraging words, Gauke risks tarnishing his reputation by being so publicly identified with a project that could very easily go wrong. So far, even the continuing niggles over the integrity of real time PAYE information have not dented his confidence.

“I think that there will always be an issue with whatever system that you have. But a more transparent tax system does lend itself to higher quality data. The problems emerge more quickly,” he said.

The length of time available for this interview saved the minister from having to delve further into the nuts and bolts of HMRC’s idiosyncratic systems. To support his top level view, he frequently cited facts and figures previously offered up by his HMRC officials. More often than not these tended to promote an upbeat perspective on the department’s digital innovation that is at odds with the experiences of AccountingWEB members who have to use them.

One of the most frustrating aspects of the HMRC digital strategy is how consistently it has marginalised tax agents, most recently when the department announced a new corporation tax system that would not be available for tax advisers. When pressed on this point, the minister replied: “Agents continue to be an important part of the operation of tax system; 70% of small businesses use agents to complete their returns.”

The minister echoed recent comments from HMRC’s Jim Hanna that the small business sector is a particular concern because it represents a significant portion of the tax gap. “Wanting to ensure that agents are part of the process is important... and a lot of work is going on in terms of products for agents,” he said.

Some of those services will emerge shortly when the agent online self serve (AOSS) project is opened up for public testing, he added. “Over the months and years ahead, the reality is there will be more there for agents.”

Agents have made it clear they want access to client data and “HMRC is aware of that,” he continued. “It’s slightly harder to deliver that, but it’s all part of HMRC plans to ensure that it can be done.”

Gauke talks a good game on the HMRC digital strategy and the general view within the profession is that it is better off with someone in his position who has a basic grasp of tax law and mechanics. But on this showing his grasp of software development principles might be of more concern. Just as with the law itself, each incremental tweak to improve the system adds yet more complexity.

Open program interfaces are very trendy at the moment, but they insert yet another layer into a software infrastructure of around 50 separate core systems - and around 600 external applications. Wave after wave of previous grand schemes from self assessment itself, to iXBRL, the national insurance platform (NPS) and RTI for PAYE have created this software labyrinth.

New programming teams have been set up within the department to take on the work as HMRC reorganises the IT tasks currently undertaken by the Aspire consortium, which means that the department will be wrestling with two more significant risk factors affecting the successful delivery of the minister’s vision for tax.

If Gauke hasn’t previously reviewed the NAO reports and government project reviews on HMRC’s technology projects, he might be well advised to start doing so. With so much at stake in terms of tax revenue and public confidence, even his robust political reputation may struggle to recover if the digital strategy goes awry over the next few years.

For further insights on his thinking, have a look at this short video clip, one of several Gauke recorded with our BusinessZone.co.uk colleagues last week:

AccountingWEB looks forward to keeping in touch with the minister and his team as the digital tax account project evolves. If you have further comments or queries about HMRC’s digital strategy, post them below and we will do our best to get them answered.

About John Stokdyk

John Stokdyk, AccountingWEB head of insight

AccountingWEB’s Head of Insight has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.

Replies

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11th Sep 2015 10:32

In the real world.....

It would be nice if someone actually answered the phone, replied to letters in a reasonable timescale and had the technical knowledge to answer any issues!

Politicians live in the same perfect world that senior civil servants do where computers are the answer to all problems. Don't get me wrong I love technology but there is no substitute for people and experience. 

 

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11th Sep 2015 11:32

Do they ever listen?
I hope it will be better than the ixbrl nonsense which nobody had ever heard of before hmrc forced it on us.

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By 2185677
11th Sep 2015 12:25

Topical
I happened to see this article after just trying to contact HMRC about a technical issue with a charity CT600 online tax return. The advertised technical helpline is no use at all as it only has a recorded message. The general charity helpline was equally useless - they said that there was nobody available on Fridays for technical questions at all and all they could do was to take my mobile number with a promise to call on Monday. We shall see....

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11th Sep 2015 12:50

fun fun and more fun

2185677 wrote:
I happened to see this article after just trying to contact HMRC about a technical issue with a charity CT600 online tax return. The advertised technical helpline is no use at all as it only has a recorded message. The general charity helpline was equally useless - they said that there was nobody available on Fridays for technical questions at all and all they could do was to take my mobile number with a promise to call on Monday. We shall see....

 

Phone the office concerned they will let you do a paper one when their software doesn't work.

Had same issues with not for profit needing a corp tax return, they gave up in the end and said don't bother with return or tax.

 

You don't want to know all the trouble we had explaining it wasn't  a ltd company.

We just ask twice in writng are you sure thats correct then keep the tax.

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By Ammie
11th Sep 2015 12:36

EXCUSE ME WHILE I RE-COMPOSE MYSELF

...................and wipe the tears of laughter away!

"They" may well be listening but there is very little chance they will act on suggestions and recommendations by the majority, unless it suits them to.

They are in the business of cost cutting and revenue raising and putting on statute all matters they demand be dealt with at our expense and inconvenience and their saving, or else.

Fact. The UK work force works longer for less each and every year and that is not about to change direction any time soon.

I find myself questioning what could possibly drop on our plate next, that's after Auto Enrolment.

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11th Sep 2015 12:43

Listening?

My arse[***]!

Just watch the cock[***] up again.

You have to bear in mind that the message is spun from

"the less errors we can see in the system means that it will seem as if it's working and we will get a pat on the back" "the morons will never notice"

oh well in the interests of Satire we will just have to take advantage.

 

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11th Sep 2015 13:42

Listen and take no notice!

Say no more

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11th Sep 2015 14:28

Listen to this:

If you want to make compliance easier and cost less, stop inventing new and complicated taxes, and stop trying to collect everything via PAYE.

In the past 10 years we have the following making it harder (and make tax payers need accountants, not that I am complaining in that respect)

1. RTI

2. Auto Enrollment Pensions 

3. Withdrawl of personal allowance at £100k

4. Children's tax credits claw back at £50k

5. New interest rules on BTL

6. Collection of student loans via tax returns

7. Transferable married couples allowance (at joke levels of tax)

8. Divergence of NI and income tax thresholds with the new obsession to increase the latter and not the former.

And probably lots more beside.  Few if any of these measures are actually necessary, merely political meddling. 

If you want to make it easy and cut us out of the game, you need to stop making up complex ways of doing things.

 

 

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11th Sep 2015 14:47

We are listening ............

but that is different from taking any notice of what you say.

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11th Sep 2015 15:18

David Gauke has nailed his flag to HMRC`s digital mast

So a good indicator of whether the programme is going well and is expected to be delivered on time would be Mr G`s continuing in his existing job. However if  he or the current head of HMRC digital strategy suddenly jump ship then it would be a good indicator that things were not going to plan. Mr G is a Politician, he also strikes me as a survivor so watch this space..

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By squay
11th Sep 2015 15:59

Oh Dear! Oh Dear!

Not all clients are digitally enabled. I have a husband and wife client pair who don't do digital, they don't even have a TV. They think "online" is pegging out their washing and a smartphone is a red telephone box that actually pays back your coppers when you press button B! This is just one of the reasons they choose to use an accountant.

Mr Gauke and his cronies seem to think that if you make it easier to deal with your tax affairs online people will want to do it themselves. The majority won't. Like my client pair above many just don't want to deal with HMRC and some are even scared of anything to do with tax let alone understand it's complexities. In most cases we accountants take away the compliance pain make it go away. That's what they want us to do and HMRC need to understand that.

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11th Sep 2015 17:47

Well, looks like I'm going to have to be the lone voice to disagree with all of the above.

I like the digital strategy, I think it's the right way forward. I accept it will be a while before the kinks get sorted out and it will never be perfect. But I've just submitted several monthly payrolls, some annual accounts and a handful of tax returns while sipping coffee, eating a sandwich and watching the very tense latter stages of the cricket from Headingley.

So I would like to encourage HMRC to enable more stuff to be done online and free up staff from routine chores so they can help with sorting out the bumps and inevitable issues. Get the systems working properly, then throw manpower at the exceptional cases and not the routine stuff.

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13th Sep 2015 20:17

Feels different
Notwithstanding the comments about help lines and those without internet access, this strategy feels different in that I don't remember a minister getting involved before.

I'd be keen to see what comes of it.

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