HMRC’s future requires updated data gathering
How HMRC collects and stores data to digitally transform taxpayer services is currently under debate. Paul Aplin looks at the challenges and potential ahead.
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Paul Aplin was for many years a tax partner with an independent West Country firm. He is a past president of ICAEW, a former Chair of the ICAEW Tax Faculty, a member of CIOT Council and the Tax Technology Committee of CFE. He is a non-executive director of three companies, a member of HMRC’s Admin Burdens Advisory Board and the OTS Board....
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I know this is but one (limited) article on a potentially enormous topic, but there's at least one casual (almost throwaway) remark that I feel needs to be picked up and looked at:
"There will also need to be an agreed format or schema .. in which to provide the data so that it can be quickly, easily and accurately ingested into HMRC’s systems and allocated to the correct taxpayer’s account."
From whence this blithe assumption that correctly formatted data will be "accurately ingested" by HMRC's systems?
With RTI (and almost all HMRC systems of the last 12+ years) there were already a plethora of target systems ... and, more importantly, a host of (mostly undocumented) processes and routines for the post-processing of submitted data before moving it on to other unimproved elderly databases.
Yet all they planned to build was a simple front-end (data capture with file-format validation) ... capable of feeding these elderly systems - but not necessarily with the right data in the right place or at the right time (to paraphrase Eric Morecambe).
Hence the premature but justified cries of anguish from me (and other developers) when it became apparent at the start of the last decade that: 1) HMRC had no intention of even reviewing let alone modernising their monolithic but unintegrated back-end systems; 2) and were only belatedly even trying to get to grips with the fact they didn't even know *who* knew how those various batch processes worked (and what happened when they didn't).
I even recall a Director happily saying, at a large gathering in Euston Towers' in response to one of my points: "Well if they're unknown unknowns then there's nothing much you can expect us to do about it" ... and waiting for the applause (that never came)!
They didn't learn then and haven't done so since ... and still show no signs of understanding that they're responsible for building each new edifice on a platform of quicksand that exists in a quantum state of uncertainty.
Seiss grants were ripe for pre population.
P60s should have followed and then CIS deductions suffered.
All this is supposed to be in house but I fear I’m being naive and over optimistic.
This is a pie in the sky aspiration. Portfolio managers do not produce consolidated tax vouchers until around the end of June-a particular bugbear of mine.
Where will information about capital gains come from?
APIs still don't come down into PTP.
The problem with HMRC and tech is that it’s marketing department has failed to understand that the modus operandi is Micawberish, and still relies on abacus and quilled pens. We have seen how the private sector is able to harness technology, and equally how Whitehall hasn’t!
What it needs is an independent analysis of requirements and a dictatorial approach to MUST HAVES.
But what it really needs is a simpler tax code that is fit for purpose and not subject to ministerial whim.
What it really needs is for us to take over all the admin of HMRC and let them get on with the job of investigating and collecting. That's what agent strategy was all about.
Why should HMRC have the more or less only access to information when we have been asked to act as agent for the tax payer? Please don't give me that "fraud" ploy. Scammers can get into anything.
Another HMRC dream. Over 10 years ago HMRC was going to deliver the Agent Dashboard that would enable agents to (1) register clients for SA and receive a UTR at the end of the process (2) self-authorise clients and (3) amend clients PAYE codes online. HMRC's announcement was in February 2012 for delivery of the first tools a mere 2 months later. But here we are 11 years later and HMRC has failed to delivered any of the 2012 announcements. Meanwhile HMRC's IT is falling apart. 11 years ago 100% of our SA returns were captured. Today, a sizeable number are not captured and we have to phone HMRC to tell bring to their attention their failure to capture data they have received digitally. Why don't HMRC notice their own IT failures? Back in 2015 HMRC announced how it was going to make better use of data HMRC already held, with the first phase starting in 2017. That's well before Covid, so HMRC can't hide behind Covid as an excuse. But here we are in 2023 and HMRC is still not making use of the data it already has. And since then we've had plenty of new HMRC IT that is substandard eg 30/60-day CGT. HMRC needs to stop dreaming and fix its existing systems.
But HMRC still can't get the basics right. On 6 July 2022 I lodged a client's 20221/2022 SA100 electronically and got their automated receipt. To this day, HMRC have not yet copied the captured tax return data onto their SA computer. After some months of telephone chasing and HMRC's insistence that I lodged a paper return with no figures on it whatsoever, thus suggesting it was my fault, I made a formal written complaint on 12 December. Whilst they acknowledged the complaint by telephone, they have still not yet copied my client's 2021/2022 tax return data from their receiving server to their SA server. Until HMRC can put right existing problems and mount them on solid foundation they should not attempt to bring about any more data changes.
After one of my client's Tax Return still remaining uncaptured after 18 months (and numerous phone calls to the ADL bringing it to their attention ; the ADL saying it was on a manual worklist with a 24-month backlog), I submitted a complaint. That eventually got it captured, but that took some months. I am having to submit complaints to get routine matters dealt with. These are all for transactions with I have submitted digitally to HMRC (whether that is a return or online form) but HMRC has not processed end-to-end digitally. Why does HMRC have so many manual processes for data HMRC receives digitally?
It amuses me to see HMRC wants to extend powers to inspect the information providers' systems. How could it know what it is doing? It cannot make its own disparate collection of systems, with their work arounds, glitches and programmed nonsense, speak to each other or to the taxpayer. It needs to make sure its system are capable and robust enough to import data and handle it appropriately, or else it will be using a spreadsheet to do it.
I hope HMRC has not done a deal with Fujitsu for the software. Horizon worked out so well for sub-postmasters and the Post Office.
I understand HMRC may be striking for up to 18 days this month. Has anyone noticed?
The more we hear of these ambitious ideas, the more ridiculous they sound.
Communication by email is a great idea that most people already use, but not HMRC.
Communication and interaction with HMRC is appalling and well below the levels dictated by legislation (HMRC Charter).
We have a very odd tax year with most people accounting to the end of months. PAYE is a constant embarrassment when trying to explain to clients that HMRC thinks the end of April is actually the 5th May.
I could literally write pages of this stuff about how HMRC are about as far down the digital scale of progress as the abacus, and spend most of their time in a fantasy world rather than dealing with everyday matters that are the real priority.
All this and a new threat from AI to deal with as well. How long now before they melt down completely.
As we look to the future of HM Revenue and Customs (HMRC), it is clear that updated data gathering methods will be necessary to ensure continued success. In order to effectively collect and manage tax revenues, HMRC must have access to accurate and timely information about individuals and businesses.
One potential solution to improve data gathering is to implement new technologies that can automate the process of collecting and analyzing data. For example, advanced data analytics tools and artificial intelligence could be used to sift through large volumes of information and identify patterns and anomalies.
In addition to technological advancements, HMRC must also prioritize collaboration with other government agencies, as well as businesses and individuals. By working together, they can assure that data is shared in a secure and efficient manner, allowing for better decision making and improved outcomes.
It is clear that updated data gathering is essential to the future of HMRC. By investing in new technologies and fostering collaboration, they can ensure that the organization is well-positioned to meet the evolving needs of taxpayers and maintain its critical role in ensuring the stability of the UK’s tax system.
A great answer but very bland and without an opinion.
Looks to me like AI has been at work.
Whether bot or human, it certainly uses all the PR 'tricks' of conjoining reasonable statements as if they create a complete story (instead of a bunch of non sequiturs).
For example ... "One potential solution to improve data gathering is to" - so let's hear what are the other 'potential solutions' (given that this one runs out of fuel before reaching its destination)?
Also ... "By working together (with other government agencies), they can assure that data is shared in a secure and efficient manner" - a tad far-fetched when in practice they are unable to achieve this with data solely under their own control!
This is likely to be the usual HMRC disaster. Ambitious plans, tiny budget. Not enough staff with skills and time to work on it. Budgets slashed midway through requiring rescoping (aka not delivering the benefits in the overly optimistic business case. I’m the end the professionals will be left to work with a crap system labelled, as always, as a great success.