Wendy Bradley is not giving up on her quest to unravel the numbers given by HMRC for costs and savings to be achieved through MTD for business.
It’s in the TIIN
The costs and savings of MTD are supposed to be explained in the impact assessment for the tax policy change (known as a TIIN). In a former life, I was the impact assessment programme manager for HMRC, so I know that the calculations underlying a figure in an impact assessment, or TIIN, are eligible for disclosure under the Freedom of Information Act (FOIA).
As I explained in MTD: the costs and reality, I submitted a request under the FOIA for the information underlying the disputed exchequer impact figures in the TIIN for MTD. This should have revealed the calculations behind the controversial £945m of extra tax apparently to be collected from small and micro businesses in this parliament, as a result of making them keep their records digitally from April 2018.
The response I had from HMRC's Knowledge, Analysis and Intelligence division says that they "consider that the information is exempt from disclosure under Section 35(1)(a) of the FOIA."
FOIA s 35(1)(a) excludes information from disclosure if it relates to "the formulation or development of government policy."
This response makes no sense to me. A TIIN is sometimes published with a consultation, in order to seek further and better information from the affected population, but the commitment is to publish a TIIN when policy development is at or near completion.
David Gauke told parliament in 2011 that TIINs would be published when a "policy design is final or near final" and the explanation on gov.uk still uses the same phrase, "final or near final". Can a policy which is final or near final still be described as subject to "formulation or development" as specified in 35(1)(a)?
I have today sent in my request for the decision to be reviewed. As I understand it, there are two layers of internal review by HMRC before I can go to the Information Commissioners for a ruling.
This three-step process means that it is very unlikely that I will get an answer before the MTD enabling legislation comes before Parliament in the Finance Bill 2017. Any MP who wishes to question the basis of the mandation of MTD argument, by reference to the data underlying the exchequer figures, will have to seek the information from the Minister directly. I urge any MPs reading this to put in a Parliamentary Question as soon as possible.
Why the delay?
I am not suggesting that HMRC are arguing that the exchequer impact calculations are covered by the FOIA exclusion simply to delay the scrutiny of their figures till it is too late to impact on the Finance Bill discussion. I'm sure this is not the case.
There are a couple of reasons why HMRC’s reluctance to release their workings may be justified. There are some policy matters still to be decided, which are to be announced before the Finance Bill 2017 is published on 20 March.
Whether the threshold for inclusion in MTD is kept at £10,000 or, as campaigners have suggested, increased to the £83,000 VAT registration threshold is still under discussion.
If this discussion depends on how the £945m in purported lost tax is distributed between different sizes of business, and the data has sufficient granularity to influence that discussion, then, perhaps there is a policy question still to be formulated or developed.
There is also a question of whether the very smallest businesses must begin to use MTD in 2018. If the underlying data is sufficiently granular to show where real difficulties will arise, HMRC could argue that there is a policy question in development.
No doubt all will become clearer, in time.