Legacy systems running UK's collector are taxing – in more ways than one Costs associated with the remediation of the UK tax collector's legacy systems have risen by up to 390 percent, according to a new report from government auditors. His Majesty's Revenue & Customs (HMRC) has estimated IT-related costs associated with major tax-related digital change programs to be £482 million ($598 million) in …
Even if the code runs fine and the hardware is whats hard to support it should be possible using eBay... to recover from failure during migration and find someone competent to migrate to a supported platform in a reasonable time frame at a reasonable price when the budget for the projects is hundreds of millions of pounds and they have Whitehall available to 'help'. I can understand that this software might well be complex to re-implement and require alot of grunt but IBM mainframes and x86 servers can offer a terabyte or more RAM multiple GB/s network bandwidth COBOL and FORTRAN are supported on Debian, RHEL9, and Windows. If the code needs to be rewritten or reverse engineered so they know what it does migrate to a supported platform with sane costs then run a long lived program to take the time needed to train permanent staff, how it works, and reverse engineer the organisation process information from it so that the organisation can manage that like a responsible customer and not leave it encoded in aging software.
But which dialects of Fortran or Cobol? One estimate put the number of possible *standard* Cobol dialects at over 100000, even without implementor defined features.
Then you have to take into account changes in the way that the language interacts with its environment: character encoding, buffering, disk file format, system calls, in Cobol f'rinstance how does one mark a deleted record ...
Migration aint easy - even if one does not have to do it in a rubber dinghy
Yeah, nobody is selling anything to HMRC on eBay after their latest cash grab - sell more than 20 items in a year now and you're "a trader" and need to register to pay tax on your earnings. So now there's eBay, payment processor and HMRC grabbing your cash - hardly worth bothering with selling stuff there!
This ain't true. The UK tax rules have not changed for individuals, you have always been required to declare 'trading' income over the Trading Allowance (unchanged at £1000).
What has changed recently is that the trading and online content sites, like ebay, vinted, airbnb, TikTok etc, now have to report directly to HMRC anyone who makes more than 30 trades or earns more than €2000.
migrating HMRC's critical IT services onto new platforms...has "cost more than initially expected and has underdelivered due to unforeseen technical complexities
Really? A gubbuermint IT project under-delivering and over-spending? That's practically unheard of in the UK. Not to worry though, I'm sure 'lessons have been learned' and all the other usual PR dribble will smooth it all over.
/sarcasm
The irony isn't lost on me: it's our tax that's paying for this particular clusterfuck.
In 2023 Revenue in Ireland spent €585 million (£487 million) on everything operations wages projects.. building permanent infrastructure at ports. Technology was less than 14% of that. HMRC in the UK are planing to spend something approaching that on one IT program due to mismanaged legacy IT. At 14% the Irish revenue technology costs are circa £68 million they could run their technology for the life of this parliament on just this projects budget and it left over 100 legacy systems out. This is shambolic and embarrassing for the nation that in the form of ITIL literally wrote books on service management others have used and improved on to avoid these types of situations.
Revenue Eire (or whatever they'd like to be called) have a cost of revenue collection of 0.44% of the revenues collected, and that's appreciably better than the UK which is 0.51%. I suspect that the bulk of the difference is down to the greater complexity of the UK tax code. There's credible analysis by Munich and Padeborn Universities that scales the Irish tax code as being about 15% less complex than the UK (although there's little to choose between the UK, France, Germany and Spain). The more complex the tax code, the more chance for avoidance, and the higher the costs of collection.
People like to think that ITIL has somehow solved the service management problem - it hasn't and it's getting worse. Try asking the poor users if they believe that ITIL is some kind of silver bullet when their organisation has spent £££££ on a CMDB that doesn't (and never will) work and their important change is kiboshed by the (preventing) change committee at its annual meeting.
ITIL is all about the certification treadmill and the associated cash plus spending pointless hours arguing whether an "issue" is an incident or a problem - who cares (certainly not the people that just want it to work)!? You might as well argue over how many angels can dance on the head of the pin as 17th century theologians were allegedly wont to do (at least it kept them from the choirboys I suppose).
Tax doesn't have to be taxing.
You know what's funny (not really but anyway) they have seamlessly linked HMRC with the DWP systems so they can cut your benefits when you earn money instantly. Would you like to know the kicker?
When moving from a job to benefits you get your final pay. Actually you don't always get your final pay as there maybe some overtime or whatnot so you get it over 2 months. You pay tax on it and that's what they use so no benefits for you. The kicker is that at the end of the year that tax will get moved into the correct period for year end as it wasn't money you earned in the month it was entered into the system for tax purposes. You don't get anything back for that btw. If it goes the other way and your tax is moved to a period you received benefits you instantly get a bill to pay the benefit back. It doesn't matter what your thoughts are on the benefit system that isn't right.
The point here is how did they set this up to perfection (in their view) but they can't get the rest of it right? How are rich people avoiding tax altogether or getting a little slap on the wrist when they get caught? My personal view is we need to rip up the tax laws and just make it simple. Maybe one or two pages. No loopholes. No way for corporations or the rich to dodge it. Just make tax fair then we wouldn't need to spend 100's of millions on some antiquated systems not fit for purpose. Why does this have to be complicated?
I remember hearing a story about a thinktank in the Thatcher era (can't verify it so it's probably not true) but the idea was that someone in the thinktank suggested exactly that .... A flat rate of tax on EVERY pound you earn. No NI, no VAT, and none of the other hidden taxes, just a flat rate on everything. And the reason they were given why it would never happen was due to the 750,000 (parasitic) gummint workers that work for all the gummint departments that administer all of these 'additional' taxes. In a country with 'simple' tax laws there was no excuse to employ these people, so they'd all end up unemployed.
But I think it was probably more the fact that in a 'simple' tax regime there would be no way for rich people to hide their money, and they wouldn't end up paying less tax than the poor people!
All those workers could be helped to go into the private sector that produces wealth rather than skimming off it.
Reminds me of that sketch in Hitchikers where they come across a spaceship with all the pointless professions and middle managers on it, having been told their planet is about to explode and they must escape urgently. Ah revelation .... carbon emissions, that's what it's about!
"How are rich people avoiding tax altogether "
In the UK, the top 1% earn 12.5% of all income, and pay 29.1% of all tax*. And the top 50% of households pay 80% of all government receipts. Note on that last one, that it's gross receipts not net, if it were net receipts then the proportion paid by higher earners would increase.
* House of Commons Library research.
"In the UK, the top 1% earn 12.5% of all income, and pay 29.1% of all tax*. And the top 50% of households pay 80% of all government receipts."
This should be pushed everywhere along with Reeves pushing the rich to leave the UK. Because those of us here are left paying the tax's
That same thing is pushed over here: that the top small_number% pay big_number% of all taxes.
It turns out that the top 0.000000001% pay bugger-all due to having their only income being loans against stock. The 1% that pay all the income tax are the doctors/lawyers/small-business managers who pay mostly in income tax and then the statistics ignore the sales taxes paid by the bottom 80%
So the top 1% paying all the tax does not mean that Bezos / Musk / Jimmy Carr etc are paying for everything.
@Yet Another Anonymous coward
I am not sure if your comment is humour or not so I will assume some seriousness in case other readers do too.
"It turns out that the top 0.000000001% pay bugger-all due to having their only income being loans against stock."
Something completely different to what was said is totally different than what was said. Agreed.
"The 1% that pay all the income tax are the doctors/lawyers/small-business managers"
The 1% paying for most of us yes. Tax the rich. That is what people want isnt it?
"So the top 1% paying all the tax does not mean that Bezos / Musk / Jimmy Carr etc are paying for everything."
Something completely different to what was said is totally different than what was said. Agreed. However if their money is in our economy it is being used in our economy. To pay wages, build business, provide services, etc.
@ChodeMonkey
"Only a total schmuck would believe that the UK very wealthy pay the level of taxes that salaried earners do."
Depends what you mean by level. They pay more due to the progressive tax system, but there are a limited number of rich people to rob and so the burden of extravagant government spending must fall upon the masses. That is why a new tax against the rich is likely to become a tax on the middle class.
@ChodeMonkey
"Specifically speaking about salaried taxpayers as the ones who shoulder the burden."
That would be the rich and middle class that the burden falls to regardless of tax being promised to hit exclusively the rich. Because the rich cant afford to pay for all our 'goodies'.
"Richer, non-salaried earners pay little to no tax in the UK."
People who dont live here? Or ones who do? People who aint here wont pay tax, those who are will pay tax according to the rules. Dont like the rules? We can probably agree they need simplifying.
@ChodeMonkey
"Residents for tax purposes. But not salaried. Do you understand this distinction/massive advantage?"
Honest question of locations. For example I am in the UK but Yet Another Anonymous coward mentions "Bezos / Musk / Jimmy Carr" and as far as I know Carr is the only one in the UK and he pays what he legally must. But any activity they do in the UK does get taxed so they still pay tax here where applicable
No Ma'am you have not understood.
If one earns through a paid salary, one will pay NI and income tax at a higher and higher rate as your salary increases. This is not the case for non-salary income. Go research this. Try ChatGPT or some other tool. Ask it to plot tax as a function of increasing salaried and non-salaried income in the UK for 2024. That will enable you to visualise the disparity.
@ChodeMonkey
"No Ma'am you have not understood."
Unfortunately I think it is you missing my point. You looking at only NI and income tax miss the entirety of the sprawling tax system as well as missing that their money residing here is in our economy which is used to increase our economy.
I know Carr is the only one in the UK and he pays what he legally must.
Except when he didn't. He paid some tax after being outed as a tax dodger. Who knows how many more tax dodging scams he was involved in and how many he's using now? I very much doubt people like him pay tax on his income at the same rate as someone who earned that amount of money from a regular job. Inasmuchas any regular job would pay a 7-8 figure sum as an annual salary.
The truly rich as opposed to professional classes are allowed to avoid taxes, loopholes left that require a high wealth to exploit because they pay the politicans under the counter. Not brown envelopes, legally but immorally. People think the government runs things, only trivial stuff, they're a front to make us believe we have choices. Bankers run the world and they understand that fiat currency is paper or gates in memory chips. Ownership and control of resource is real wealth. Once upon a time money directly represented scarce assets such as silver and gold, that was a problem. With made up money you can press a button make some and indebt the person you give it to, who also has to give more back. If they screw up you can take their stuff as well. When you have more flowing back of the digits in computers (just data) you can lend more, yadda yadda. Meanwhile for insurance because it's a ponzi scheme and will break one day you accumulate real wealth such as gold reserves and land. You don't have the land on your books you simply control the person that does financially with pretend money.
I'm not going to downvote because I know just how fucked up UC and DWP is.
But anyone calling for a "simple" system is a fool. It's the equivalent of saying lets get rid of these millions of lines of code and replace it a few thousand lines built from scratch. (And in the process probably forcing every single user to give up UIs and mobile devices and use a command line.) Those rules all do something. The rules determining what constitutes self employment would take up more than your two pages alone. And many of those rules have been written to close loopholes. And moreover I suspect, in your case, the problem were the benefit rules not the tax rules - so rewriting the tax rules would have had no effect.
Which is not to say they can't be simplified. And it should be simplified as an ongoing work. But it's complicated because people are complicated; we are not all spherical cows. And the rich get off because they heavily influence how the rules are written. And if we tear it up and start from scratch, they will still write the rules in their favour, and we'll likely end up hurting a bunch more poor people than currently git hit.
And many of those rules have been written to close loopholes.
That's the problem. Some bright spark of a chancellor invents a complex new tax rule, and the tax accountants soon find loopholes. Instead of fixing or simplifying the rule, the chancellor just adds new rules to close the loophole. Rinse & repeat, we get warts on warts on warts.
Simple rules (like a yes/no) get you what had all the newspapers up in arms almost immediately after the new government came to power):
1. Are you a pensioner AND do you get any benefits from the state? THEN you get winter fuel allowance.
2. Are you a pensioner AND do you NOT get any benefits from the state? THEN you do NOT get winter fuel allowance.
Cue all the ones 5 quid over the threshold or not having applied for benefits ever getting told "sorry mate, the computer says no for winter fuel allowance", running off to the press and shouting how Reeves is robbing all the pensioners.
It goes without saying that Universal Credit tries to deal with a heap of credits and allowances and limits and thresholds, so it's not a simple thing. Same goes for personal income tax, tax on interest and capital gains, tax on investments, thresholds on the same of all previously-mentioned.
That said, the only reason why UC and other things are a perennial mess is because no finance minister / chancellor of the exchequer wants to take on the hot potato of simplifying the tax code in a way that eradicates tax loopholes, special pork barrel concessions etc for fear of being slaughtered in the press for costing the population money and being 'not business friendly'. The UK's tax code could use a proper spring clean but if that was taken on, it would not be popular because there'll *always* be losers where there are winners.
Cue all the ones 5 quid over the threshold or not having applied for benefits ever getting told "sorry mate, the computer says no for winter fuel allowance",
A bit like the NHS surgeons who won't do extra shifts because of the pension tax rules. A few hundred quid for another shift can land them with an extra £5k tax bill.
They used to send out the forms. We'd fill them in and send a cheque. It worked. Then they forced us to do it digitally, which works OK if you can actually get past the security. But now it costs them hundreds of millions of quid a year paid to IT companies. I guess that's 'progress'.
If your tech isn't costing you less and making things easier, it is not a benefit and you should stop using it.
Look at the error rate in the 1950s before they started using computers to process tax compared to today - I bet that the number of people being mis-charged was 100x higher than it is today, at least.
There's a reason that taking humans out of the loop usually reduces error and waste, as long as they are programmed properly.
There's a reason that taking humans out of the loop usually reduces error and waste, as long as they are programmed properly.
Tickled my funny bone when I parsed that: "as long as people are programmed properly taking humans out of the loop usually reduces error and waste."
Just confiscating their clogs would be cheaper and less drastic than a Neurolink implant.
Having retired (sorry, 'made redundant') at the end of 2023, I last week received a letter saying I'd overpaid £800.
Two days later, having claimed the overpayment, I received another letter saying they had underestimated this years taxcode and would need to take an extra £300!
"left receive, right relieve"
China GDP (1995 to 2025): Average growth around 11% per annum.
UK GDP (1995 to 2025) : Average growth around 2% per annum.
Now, just suppose that UK average GDP growth was around 5% per annum over the same period.
- EVERYONE would benefit!!!!
- Including HMRC!!!
But we've had thirty years of politicians who have NO IDEA AT ALL about the meaning of the word "growth".
...or about any national POLICY to encourage "growth"............................
...and in the mean time we have had PLENTY of politicians telling us that they "ARE DOING SOMETHING".......................................
Really???
They are very good at taking money, excellent in fact. If an average professional and homeowner with kids added up their total tax over a lifetime it would be shocking; income, stamp duty, purchase taxes, duties, council tax, inheritance, road tax etc. We are being fleeced and it isn't coming back to us. Tax is supposed to be for people's benefit. NHS is rubbish, schools are rubbish, roads and local services lacking. On top of that they screw the economy and spaff money on stupidity. It is extortion, they are a mafia.
These high-growth countries have one thing in common. They understand that a prosperous economy is full of people doing productive things. In order fo this to happen, there must be businesses employing the people.
So these high-growth economies don't import anything they don't have to, instead ensuring that local demand is satisfied by local business. This is achieved by regulation or by direct import controls/tariffs.
However, our lords and masters could not conceive of upsetting the Globalist gravy train, so successive governments of all stripes have either watched as local industry dies, or actively worked to ensure it's failure.
Labour would rather people all worked for the State, and the Tories don't like pissing off the financial services industry, which runs on globalisation.
It is difficult; a large bureacracy, politics, critical systems, old systems and old code. Usually not updated when it should've been and it builds a mountain of legacy. But there is a way to reduce costs drastically for long term. Simplify the tax system! Be wild scrap income tax or at least make it all 25%, have a threshold for low earners. Any additional taxes required could be collected via purchase tax. You buy more and buy luxury, you pay. Definitely scrap stamp duty, gift tax and IHT, they feel immoral and a disincentive. The super-rich pay next to nothing anyway, even under successive Labour governments - ever wondered why?
The introduction of computing to IT enabled those governing us to believe that any complex tax system, however unwieldy, was feasible. It may have been, but in the end, the most sophisticated, complex computer is the one between our ears, but we are loth to recognise this and keep a human oversight of the simple principle behind taxes - that everyone earning pays toward the country's upkeep, with the higher earners paying more. Perhaps a step back to what would be achievable without computing, let alone AI, would enable the construction of a resilient system that could be repaired if necessary. Almost certainly, the current mess will instead be made more complex by adding AI, with all its faults - known and as yet to be discovered. Then more HMIs will be "let go" until the system eats up revenue, to the extent that outside consultants are brought in. They will recommend employing specialist tax accountants - to be called anything but HMIs, because that would be seen as a backward step. Then the cycle will start again.
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