Multi-tasking blunder leaves UK tax digitization plans 3 years late, 5 times over budget

A decision to ride two horses at the same time left the UK tax collector's plans to go digital with a three-year delay and a budget bursting from £226 million to £1.3 billion. This is according to public spending watchdog, the National Audit Office (NAO), which found His Majesty's Customs & Revenue (HMRC) introduced a flaw …

[Furious Reg reader John]

The civil service went to a brewery but left thirsty and sober despite wanting to party

Yet another IT failure by the civil service to add to the long list of very expensive failures.

A complete overhaul of the civil service is needed, starting at the very top. But, there will be no accountability for this, and there will be another series of mismanaged projects, all failing due to the same reasons as the ones that failed before.

[steviebuk]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

Its the management that need replacing not the engineers.

[Doctor Syntax]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

Engineers? What engineers?

[Dan 55]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

I was going to say the same, I thought the CC just had managers versed in the classics and PPE and that's why consultancies run rings round them when every single contract is negotiated.

[Anonymous Coward]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

It depends where you look. In my little corner of the machine, it's engineers everywhere - and high caliber ones at that.

I would rather expect that if you scratch the surface of the report, it'll come down to senior managers (i.e. the ones who generally aren't engineers) and politicians pushing the agenda while the engineers are expected to "just do it".

[Hans Neeson-Bumpsadese]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

In my experience working on civil service contracts (employed by a contracted 3rd party company - *not* one of the usual suspects like Capita/Fujitsu/whoever) the problem is not so much a lack of engineers, it's a lack of civil service employees.

For example, I worked on a big job for a government department for a number of years, which had a comfortable 7-figure budget. In all that time I hardly worked with/for anyone who was actually employed by that government department - they were all consultants brought in as contractors. They were acting as my customer, but weren't actually part of the organisation.

As with so many government projects, it all went a bit iffy, but as those folk aren't part of the organisation I didn't see a a huge motiviation for them to fix the problems. They knew that in the fulness of time they'd move on and be pimped out by <consulting house> to some other project. When these things rely so heavily on people with so little actual investment in the organisation, then it's not surprising that things fail.

[Anonymous Coward]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

….said an engineer.

[ragnar]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

"The NAO said the program had been affected by the UK's departure from the EU and the COVID-19 pandemic, which meant resources had to be diverted to other areas."

You are ignoring the above: the government massively increased the workload on the civil service, while simultaneously crowing about how it was being shrunk down to 1930's levels.

[keithpeter]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

@ragnar and all

I'm guessing the COVID workload for HMRC was furlough payment processing? That would have been a biggy.

Wider point: I work(ed) in the public sector but not in civil service. We carried out government policy as best we could given resources. Election. New government. Different policies - like U turn level change. We have organisational inertia - can't turn the ship as fast as you can type a press release - coming from staff hired specific to previous government policies and buildings/plant. Add in pay freeze, austerity, and actually getting blamed for the old policies as if they were our ideas.

Fun times.

[fajensen]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

The "government" has a certain ... nostalgia ... for the 1930's.

[Zippy´s Sausage Factory]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

The likelihood is that the civil servants told the politicians to phase it in two parts, and the politicians wanted both done at once, so they could brag about how clever they were and how civil servants should be doing what they're told instead of listening to pesky "experts" and other silly people who claim that you need to know more about technology than how to print an email if you're to decide a multi-million pound IT contract.

[Anonymous Coward]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

It the likes of Palantir, Capita and Cognizant that fuck this up. I'd be embarrassed to admit working for one of them...

[chris street]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

I'm embarrassed to have to admit I work alongside them. I'd not cope with having to admit to working for them.

[Anonymous Coward]

Re: The civil service went to a brewery but left thirsty and sober despite wanting to party

Oh let me guess John - you've never worked in the CS and lap up all the shite that the politicans heap on us as well... I bet you think we are all latte swilling lefty Guardianistas as well...

Let me disabuse you right now of the notion that we don't know what we are doing - we do - but when political priorities change daily, and so the scope and deliverables do, is it any wonder that the budget slips, the work is redone - perhaps completely differently? And don't forget the pandemic - or are we immune from that?

[abend0c4]

It has made some recent progress on VAT

That's hardly surprising: VAT is a very simple tax to operate at the tax collector interface - it's basically four fields of necessary input and four fields of supplementary information (though the internal accounting to produce those numbers may be much more complex).

The government could simply have provided an online form with 8 boxes and the whole thing would have been done in no time, but they chose a much more elaborate route. However, there's a limit to how complicated you can make it.

A straightforward personal tax return is 8 pages, with supplementary pages for things like self-employment - and there are all the associated records of employers' PAYE (and NI) returns before you even start on corporate taxation. And there are arbitrary rule changes in almost every budget, not just in thresholds and marginal rates. The substantive content of one of the standard accountants' handbooks on tax is estimated to amount to 7000 pages of guidance on present legislation.

Before you automate any system you need to consider whether advantageous simplifications are possible that might make your task easier and the outcome more robust.

[katrinab]

Re: It has made some recent progress on VAT

7 entry fields and 2 calculated fields:

1 - VAT due on sales [+ VAT due on certain types of purchases]

2 - VAT due on imports of goods from EU to Northern Ireland

3 - [1 + 2]

4 - VAT reclaimed on purchases

5 - [3 + 4]

6 - Total value of sales [+ certain types of purchases on which VAT is due to be paid, but not all the types included in Box 1]

7 - Total value of purchases

8 - Total value of sales of goods from Northern Ireland to the EU

9 - Total value of purchases of goods from EU to Northern Ireland

I actually think the 16 page Italian IVA return is easier to understand because each type of transaction has its own set of boxes.

[Anonymous Coward]

Re: It has made some recent progress on VAT

But, simplifying tax just doesn't compute with some elements in HMRC.

As already mentioned, we have a complicated tax system - and that's deliberate. Apart from all the detail to catch corner cases that people might exploit to avoid (not evade, avoid) paying tax, the more complicated the system is, the easier it is for people to make honest mistakes and then HMRC to rake in the penalties. Bear in mind that in some cases HMRC have declared 5 or 6 figure sums due, to be paid "now" - and then take years to actually investigate and perhaps decide that they were wrong in the first place. Just like the Post Office and Horizon, HMRC have driven people to bankruptcy, family breakdowns, and even suicides.

And guess what, especially in IR35 cases, they very often lose at the tribunal when it gets that far.

But you can't blame the people at the coal face, the blame for the failings need to be firmly laid at the door of those who set the policies - which is senior managers working with the politicians who give them the powers and set the tax laws.

[Mishak]

From my experience (personal tax, VAT and business tax):

1) The personal tax part is great - well structured and easy to use (though finding previous years could be easier).

2) VAT - I don't understand why the previous VAT filing portal has been removed. It was easy to use and did the job - I guess it's because they wanted "the paperwork" (invoice and receipts) to be included as part of the filing (though they only get the values). My main gripe is that I am now expected to use software to file, and that can cost quite a bit each year* and I do not think a micro/small business should incur costs to make statutory returns! It would be very easy for the HMRC site to provide an Excel template that could be populated and uploaded each quarter.

3) Not had to deal with that, as my accountants do the filing.

* There are supposedly some "free" options, but I am currently having to look for another one as my previous one has decided to introduce charges - if I were cynical, I would say that was their plan from the start...

[Anonymous Coward]

Speaking as someone who will probably get caught up in MTD sooner or later as they lower the thresholds, it's going to be a right p.i.t.a. At present, for our lettings business I use spreadsheets - just copy the template sheet each year that's pre-filled with 12 mortgage payments plus an entry for interest, 12 rent payments, entries for the annual insurance and gas safety checks, etc., and fill in the dates & figures every few months. I've got check calculations to spot if my double entries don't balance in a line, and space for the ad-hoc stuff. Then when everything's entered for a tax year, sort by date and there's all my transactions on one page - and totals at the bottom to copy onto my tax return.

For the last couple of years I've been using an online management package as I was expecting to be caught up in MTD by now. Guess what, I run the reports, then compare with my spreadsheets, then look for errors in the online system that cause it not to match - and yes, every time it has been the online system because it doesn't offer that "on a page" view and it's easy to miss something.

So assuming nothing else changes, it means the tax man actually gets less tax from me - I deduct the cost of the management software as a business expense. Assuming MTD doesn't change, they'll get 4 quarterly returns, but the figures will be total rubbish until I've sat down and done my annual "get everything up to date and do my self assessment" session.

[ComicalEngineer]

Despite running a very simple business I got caught up in MTD some years ago. With the old VAT system my quarterly return was calculated on a spreadsheet and I typed the numbers in. A quick check of the numbers and hit submit. Job done. All on a Linux machine.

Now I have to buy a piece of software to upload the values calculated in my spreadsheet, the HMRC system does not work with Linux BTW, so no chance of free open source software and i have to keep my Windows PC alive. Then I have to create a spreadsheet that the MTD software recognises (Excel) and have the software upload the same values I used to type in. Only you have to re-authorise every few months which means going in through the Government Gateway to get a new authorisation code....

Need I say that the process takes about 10 times longer than it did before MTD, but it's making things easier / better (although not for me).

Colour me a shocked rainbow that the whole thing is a complete fustercluck.

[Anonymous Coward]

I've been using this on Linux: https://www.comsci.co.uk/100PcVatFreeBridge.html

[suzibandit]

Free Windows VAT MTD software

"There are supposedly some "free" options, but I am currently having to look for another one as my previous one has decided to introduce charges"

I did knock up a Windows program to do this. Source code on Github. https://suzibandit.ltd.uk/suzivat/ Bit crude but gets the job done a treat.

[fnusnu]

Just simplify the tax laws

There is no way they can ever be computerised in their current state.

[deive]

Re: Just simplify the tax laws

How would tory MP friends 'n family pay 0 tax then, though?

[Anonymous Coward]

Re: Just simplify the tax laws

Just ask the SNP.

[Anonymous Coward]

Re: Just simplify the tax laws

The SNP got caught.

[xyz]

Re: Just simplify the tax laws

Buy an offshore company:-)

[Doctor Syntax]

From the brief account in the article it's difficult to see how one might be done without the other as the two appear to complement each other. Which does the NAO suggest should be done first?

[Jon 37]

You could move to new systems with better structured internals, without substantially changing the way the rest of the world interfaces with the tax office.

Then start making changes to the interfaces.

[Steve Davies 3]

Underestimated?

Are we 100% sure that the inevitable function creep that gets into all government projects is not responsible for this?

[Arthur the cat]

Re: Underestimated?

Are we 100% sure that the inevitable function creep that gets into all government projects is not responsible for this?

Philosophy time: If a government project doesn't actually function, can it nevertheless have function creep?

[Rubric: Not more than 3,000 words. Do not write on both sides of the paper at once.]

[JMiles]

"They put at risk the support of taxpayers" - how exactly? Not like taxpayers have the choice in any matters around the tax system? HMRC decides and everyone has to follow.

[Anonymous Coward]

HMRC doesn’t decide anything…elected politicians decide and HMRC implement…no matter how insane.

[David Harper 1]

Read chapter 6 of Ian Dunt's book "How Westminster Works ... and Why It Doesn't"

Ian Dunt's new book "How Westminster Works ... and Why It Doesn't" looks at the various parts of government, and explains why each of them is dysfunctional. In chapter 6, he examines the civil service, and concludes that it has an institutional bias against in-depth expertise, especially of a technical nature. Civil servants, especially those in Whitehall, gain promotion not by becoming experts, but by moving from one department to another every couple of years. Inevitably, then, any large project is going to be managed by a series of civil servants who come in knowing nothing about the project, and leave two years later taking any accumulated knowledge with them.

[Carl W]

Re: Read chapter 6 of Ian Dunt's book "How Westminster Works ... and Why It Doesn't"

Exactly this. Apart from the civil servants who have found their level, everyone else is just passing through. If you get promoted a grade and then there is a vacancy anywhere in your department at that grade, you get moved on to that.

[Anonymous Coward]

Re: Read chapter 6 of Ian Dunt's book "How Westminster Works ... and Why It Doesn't"

so the same as government ministers

[ScottishYorkshireMan]

Matt Hancocks Landlord

So, which Tory MPs benefit from this saga then? Go on, downvote, this government has been crap for you too, despite how you sell it to yourself.

[Binraider]

Re: Matt Hancocks Landlord

I don't think you'll find many downvotes from any objective analysts...

To find who profited, all you need to know are who are the major shareholders in the usual consultancy outfits like Crapita, KPMG, Cap Gemini, Accenture etc. that are earning off the back of Civil Service outsourcing.

It is sometimes said that perfection is the enemy of good enough. However, who defines good enough, and why is where we currently are clearly not meeting that level?!

[Red Ted]

"Making Tax Digital (MTD) programme"

That should read:

Making Tax Difficult (MTD) programme.

FIFY.

[captain veg]

Re: "Making Tax Digital (MTD) programme"

Makes me think that someone ought to be pulling their finger out.

-A.

[Robert Grant]

This is all entirely unsurprising, and why no one should want the government to handle any more things than the bare minimum...

But...

I will say this: the less time businesses have to spend on fake activity like tax affairs, and the more time they can spend on doing useful things for their customers, the better off we'll all be. So the estimates on the benefits might be under-egging it.

[Kane]

improved processing of VAT...

"...through the scheme led to additional revenue of between £185 million and £195 million in 2019-20."

That's great and everything, but given that total revenue for 2019-20 was £633.3 billion that's kind of like pissing in the Pacific Ocean and declaring "Look, Daddy! I made it all wetter!"

[jollyboyspecial]

There are so many problems with the meters that is be interested to know how many of those 58% work satisfactorily.

[Kristian Walsh]

Ignoring good examples again...

Meanwhile, across the Irish Sea, the Irish Revenue Commissioners (our equivalent of HMRC) have slowly but surely digitised the entire tax interface presented to taxpayers, without chaos or cost overruns.

The magic formula wasn’t really that magic at all, and will be familiar to anyone who’s had to do a big migration: Revenue make a long-term plan, but started implementation at a very small scale on one of the simplest part of the tax system that affected a very small number of clients. Once they got that pilot working, they applied what was learned to implementing the next simplest tax area (VAT), and so on until PAYE payroll submissions finally went to real-time reporting in 2019.

Now, Irish government projects aren’t immune to overrun and creep either (a payroll system for the Irish health service cost a quarter of a billion euro and ran four years late, before being scrapped entirely), but the example of Revenue is one that should have been followed by HMRC - it’s a successful implementation of exactly what they wanted to do, in a tax system that is still at heart reasonably similar to the UK’s and operates under the same type of law, in a country that speaks the same language as they do, but the UK has never been good at learning from abroad, and this current government is very badly afflicted with delusions “specialness”.