HMRC’s Digital Transformation

Mark Morton explores recent draft legislation and HMRC’s evolving role in public service. He reflects on the frustrations of digital tax systems, delays in repayments, and the long-delayed rollout of Making Tax Digital, raising concerns about the effectiveness of transformation efforts and their impact on taxpayers.

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Transcript

Hello, it's Mark Morton here. Just sitting here looking at some of the draft legislation that's come out from the government about pension schemes and agriculture and business property relief. Just looking at it, thinking, you know, I'm struggling to understand this here. Absolutely no chance for your highly qualified executors that you happen to name in your will a hundred years ago. 

So, uh, the complexity of the tax system continues, but I've also been reading about the revenue so-called transformation plan. Transforming itself into a customer service organisation, stroke do it yourself organisation. I think the thing that's strikes me as with so many other public services is certainly when I joined the Inland Revenue once upon a time, although there was a, a compliance aspect to it, I don't think there was any doubt that we were a public service organisation. 

There were local officers where people could walk in and ask for help. And pay their tax bills in cash, you know, and so on and so forth. And we all know it's how it's degenerated. Over time now we have a transformation roadmap that says, everything's gonna work by it. Uh, and it's gonna be swimmingly, useful to everybody and it will work brilliantly. 

Unfortunately, as we know, with the vast majority of public services, it is a quantum leap behind, you know, the, the pub the private business. And just a personal experience that I've had in the last few days. I filed a tax return five weeks ago. When you do it through your digital tax account, uh, when you claim a repayment, and interestingly, when you file your return, you can't claim a repayment at that stage anyway. 

It says, please log back on three days later. So like a good boy, I log back on three days later, claim my repayment. Uh, I get a pop-up page which says, please print this page. You'll never see it again. You might get your repayment within two weeks. Please don't ring us for at least four, which doesn't sound too good. 

So, of course now we're in week five and still no repayment. My digital tax account does not even tell me that I've made a repayment claim, let alone when I'm gonna receive it. So I ring the revenue and listen to 10 minutes of messages saying don't bother us. You know, use our AI assistant. Check your digital tax account for further information. 

Well, of course there is no further information. If you put in that you made a repayment claim five weeks ago, it says, don't expect, uh, a response until the 13th of October. Which is completely unacceptable, that is three months. Hold on, this is my money I'd like back. So having, uh, been kicked off the system because I'd only been waiting five weeks, I fiddled the system a little bit and put 28 weeks in. 

And to cut a long story short, after numerous messages, I've got a very nice young man, uh, who goes away, checks that I'm not a tax crook. And after a bit of security says, uh, yes, I can activate your repayment now. It may be picked up of his security, which is fine. You know, if the revenue wanna ask me why I'm getting a repayment fair question, you know, what's generated it? 

Give me proof of a pension contribution. Give me proof of a gift aid donation, that's fine. And I said to him, what is going on from your end? And he said, oh, we get loads of calls like this. And I said, but all your messages trying to get through to you say, go away. Check your personal tax account. 

He said, yes, I know there's no information in it. You know, I said, the poor, old recipients at the other end, just as I'm logging off, he then says, uh, would you like to register for voice recognition in the future? Presumably it says Mark Morton, block him or something, you know? So I said yes. You tried this 10 years ago, didn't you? 

And you had to withdraw it because of GDPR and so on. And he sort of Ed and, 'cause he's clearly just a school leave and said, oh yeah, I don't know. Uh, I said, yes, I'll do it again. That's fine. So he go away. He says, you're already registered. But I'm already registered with voice recognition under a scheme that the revenue withdrew because they breached all sorts of laws in the past. 

If this is the digital transformation that we have to look forward to in five years time will be no further forward. And. Just to finish, I suppose, you know, the nonsense of MTD, I've just spent a happy couple of hours trawling through legislation trying to trace amendments to the MTD legislation that was, was legalised in 2017 now. 

So we're now eight years down the road. It's still not ready. I was saying to my wife, and she's so sick of, you know, so sick of hearing me talk about things like this, but I was saying that MTD as a prime example, the revenue instigating a regime, which is out of date when they're instituting it, compared to what private businesses do with their record keeping, MTD is a quantum leap away from that. 

It's taken 10 years to do it. It will never do what the revenue think it will do. All that money that's been spent to no end, it's like HS two for tax. You know, what is the point of it? It's a bamboozling old system driven by people at the top of the revenue who've never worked in the revenue and do not understand the pain of unrepresented taxpayers and SME businesses. 

And instead of concentrating on multinational PLCs, somebody should look at where the majority of tax in this country comes from and actually really try and improve the system. Maybe I'm too cynical. I'll looked at the digital transformation roadmap and just think, is this gonna make any difference in five years time? 

And I suspect the answer is no. Having chucked hundreds of millions and pounds down the drain. The final thing to be pleased to know though, , the revenue are gonna introduce further rewards for informers. My experience of dealing with informers years ago was that most of them are disgruntled former spouses or ex-employee. 

So you have to take that information with an extreme pinch of salt, and very rarely did it actually lead to anything material. So it'd be quite interesting to see if the revenue are paying for that sort of information, whether it actually leads to anything. You'll be pleased to know though, there is already a fraud helpline that you can ring and I ring occasionally when my neighbours park on my front and just say, that person's a tax crook. 

I've got no idea whether they are or they are, but I'm hoping that ultimately their car will be confiscated and hence they'll start knocking on my front. So we have all sorts of, things to look forward to keep battling away and, try not to retire before the advent of MTD, but uh, is it realism or is it pessimism? 

We shall see. Anyway, on that happy note, have a good summer, everybody. Take care.