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Watch it! Here comes the mammoth
February 2007
Mike Hodge, International Trade Today
I don’t know whether you want the good news or the bad news. Once upon a time, there was a genuine choice as to one’s preferred option but, as 2007 gets underway, there is, in reality, only bad news. And, if you read to the end of this article (I don’t blame you at all if you give up half-way through), you will find that the news is not just bad – it is terrible.
Let me throw another acronym at you – ICM, which stands for Integrated Customer Management system and it is the next hairbrained scheme that several hundred HM Revenue & Customs staff are working on. And that excludes the hundreds of external management consultants who are riding ‘shotgun’.
Imagine the scene – HM Revenue & Customs has just spent several billion pounds on an IT system to capture all the information it requires about taxpayers and to access and update the data. The system actually works. So, pleased by the result, officials interview a‘customer’for feedback via ‘interactive TV’. Here is the response the Revenue hopes to get.
Taxpayer: I remember when – not so long ago – most people were scared of the tax people. Getting anything through the letterbox made you anxious and sometimes angry because you didn’t understand. You would put off doing the forms. You felt that Revenue & Customs was full of clever, rather unapproachable, people – although when you did contact them they were actually pretty helpful.
But it wasn’t easy to find out what you had to do or who you should contact if you wanted to ask something. That has all changed. Now people don’t think twice about contacting them – unless they are wanting to cheat the system, I suppose. It’s still a chore to think about your tax but now they will do much more of the thinking for you. And the speed they do things at is transformed.
Now, I can ring them, or email them or write or whatever, and I will get an answer straightaway, and one I can rely on. I don’t think my life is particularly complicated. I have two families with four kids all under the age of 16 and do a bit of consulting work alongside the company I run. But I can still remember how hard it used to be to get my head round what government wanted from me. What with PAYE for my employees, corporation tax, VAT and excise for my export business, self-assessment for my consultancy and claims for this or that tax credit – it’s no wonder I spent so much time with my accountant!
‘Now when I want to, I can check things out on line. Advice is tailored to my situation and I don’t have to know anything about different taxes and allowances – it’s all done for me when I key in my circumstances, with links to things I didn’t know I qualified for! A detailed audit report tells me precisely why I do, or don’t, qualify for something.’
Now, just in case you think I have toppled off my trolley completely, let me tell you that the source of the above scenario is HM Revenue & Customs. Whoever wrote it, in my view, was under the influence of some hallucinatory substance because I have never, ever, read such utter garbage in all my life. Does someone in HMR&C actually believe that an IT system as envisaged is able to be created and sustained?
I gather that, during last summer, various feasibility studies were undertaken and the ICM option has been selected. Apparently, such a system will allow HMR&C to pool all the information it holds on taxpayers (or are we ‘customers’?) in one place, creating a single taxpayer ‘account’.
The plan is that HMR&C can access and update this at any time and taxpayers can view their liabilities and entitlements. There are only 29.5m taxpayers in Britain so it shouldn’t take too long to get this ICM up and running! After all, with an increasing percentage of the population leaving each year, the number of taxpayers will be reducing rapidly.
In an article I read in one business journal this project was described as ‘a mammoth exercise’. I am sure you will not miss the irony of this – the mammoth has been extinct for quite some time!
I understand that this ICM project was once upon a time called ‘Whole Customer View’ and I think the immediate past chairman (Sir David Varney) made a number of references to it in his plans for the future.
The‘Whole CustomerView’was about prioritising business taxpayers and had three main goals:
1. a single customer record (VAT number?)
2. the ability to improve contact with taxpayers
3. the creation of a ‘single picture’ of a taxpayer’s financial position, with the aim of permitting ‘more effective dealings’.
An HMR&C spokesman reportedly said of ICM, ‘This work offers some exciting opportunities to enhance the way that HMR&C delivers services to its customers. That should deliver significant benefits for customers, avoiding the need for them to contact HMR&C several times. It is, of course, a very large and potentially complex agenda and so it is important that we take the time to get these initial stages of the work right.’
All is not lost though because HMR&C is planning to draw up full proposals and there will be a great deal of consultation. So that’s all right then. At least the Revenue spokesman did acknowledge that ICM has a‘potentially complex agenda’.
I leave you, the reader, to make your own judgement on all this but, as before, don’t shoot me; I am only the messenger.
As it happens, the ICM project dovetails very neatly with the unveiling, by HMR&C, of some new cost cutting plans that will result in thousands of staff losing their jobs by April 2008. This is in addition to the 12,500 of ‘net staff savings’set as a target at the time of the merger. The current (is he permanent?) acting chairman, Paul Gray, said, ‘We are taking the opportunity to save taxpayers’ money by operating with fewer buildings in a more co-ordinated, cost-efficient way.’
And now, a closing thought and one which, if it is even half true, is a quite appalling state of affairs. I received a newsletter from a firm of reputable accountants reporting that during the summer, 14,000 company directors received letters from HMR&C suggesting that they might have made mistakes in their tax returns. These letters are known as‘intervention’letters and I referred to this potential tactic in my November article.
Also, they bypass the accountants – and that is a deliberate ploy. It seems that these letters have a variety of threatening tones and suggest that directors commonly include personal items in their claims for business expenses. They also suggest that bank or building society interest has not been declared.
The letter closes with the threat that the recipient has to contact HMR&C within 30 days or an assessment plus interest will be issued. I await my letter with a considerable amount of interest. If this is the way we are going, then there would seem to be no sanity left. Prior to the merger, HM Customs & Excise and the Inland Revenue were both operating fair and reasonable departments. Help and advice was always available and officers gave advice that could be relied upon.
What on earth has happened? Are all taxpayers now seen as out and out rogues who need to be battered into submission? I, for one, am distinctly unhappy with a number of aspects of HMR&C. I have been concerned for some time now that advice and help for international trade businesses is either deficient or non-existent. In my next article in ITT, I will let you know the results of some enquiries I have been carrying out...
