Wednesday, January 30, 2013


BLOG 132

A recent government e-mail tells me that, “The Government has for the first time released details of the cost per transaction for some of the biggest services it provides to citizens” (the Minister for the Cabinet Office). They have released figures for what they call “44 of the biggest public services”.  9 of the 44 relate to HMRC.  I find these fascinating.

The biggest cost to HMRC seems to relate to Agent Authorisation.  This costs 6.49p per transaction as compared with the cost, for example, of dealing with SDRT of 0.05p per transaction.  I find this intriguing.  To me, having to get a client to sign a form 64-8 is a nuisance.  To my mind HMRC are obsessed with confidentiality whereas both myself and my clients are far more relaxed.  HMRC refuse to correspond with me by e-mail on client matters except to the extent that they can do so by simply confirming what I tell them.  Most of my clients are prepared to take the risk that e-mails with HMRC could be hacked because the risk of that happening is no greater than with e-mails to me or to anyone else.

So whilst I do not agree with it, I understand that HMRC want the 64-8.  However I cannot understand why it costs them 6.49p to process the form, when it only costs them 3.36p to process my income tax return and only 1.18p to process my company’s corporation tax return (as readers of Taxation will know, that cost me about 5 hours of time last year to submit it online, so I conclude that the vast majority of the costs of filing returns have been passed to the taxpayer).

So why should it cost twice as much for HMRC to deal with my clients’ form 64-8 as to process their tax returns?  Clearly they feel a far greater need to check on me than to check the information that my clients provide to them via me.

Why should this be?  I can sort of understand it with my clients, because I rarely agree with what HMRC say so I am probably regarded by HMRC as a nuisance.  I could understand that, when I sent a form 64-8 to HMRC, the person processing it may feel depressed that I have taken on yet another client. Do the statistics reflect that he has had to go to the pub and had a couple of beers to face up to my getting another client?  If it does, I applaud HMRC for the accuracy of their statistics.  Perhaps I should be grateful that they only get half so depressed when they have to process my tax return.

I am also intrigued to discover that it costs HMRC 0.11p to pay me my VAT refund, whereas it costs 0.27p for them to receive the bank transfer of my self-assessment payment.  Are they flippant with the government’s money so don’t bother to check what they pay out, bur are so suspicious of receipts that they want to check whether someone really owes them money before banking it?

I should emphasise that it is not HMRC that have published this pointless information without seeking to explain what it means.  It is the Cabinet Office.  This probably demonstrates that HMRC have a greater endowment of commonsense than does the Civil Service generally.  Certainly, to my mind, it begins to make George Osborne look intelligent if Francis Maude can say with a straight face, “Making this data public is an important step for transparency and ensuring government is accountable for the cost and efficiency of the services it provides”.

At least HMRC’s figures look credible insofar as their costs of doing things seem to vary enormously.  I notice that it costs Companies House £5.20 to deal with an annual return, whereas it costs them £5.20 to deal with the filing of accounts and £5.20 to deal with the filing of other documents.  Does this mean that it takes as long to check a 20-page set of accounts as a 1-page change of directors form?  Or does it means that HMRC try to do things properly, whereas Companies House put two fingers up to the statisticians because they realise that it is an utter waste of resources to produce pointless statistics, so they make the same guess for everything?



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