Final minutes of meeting on 15 September 2009
13.00 – 16.00 G16, Horse Guards Road
Teresa Graham (TG), Paul Aplin (PA),
Roger Southam (RS), Simon Sweetman (SSw), John Whiting (JWh),
Martin Jones (MJ), Russel Griggs (RG),
Ian Dewar, Andrew Hubbard, Julie Kenny, Francesca Lagerberg
Karen Thomson & Steve Sharrat
Stephen Banyard (SB), Simon Woodside (SW),
Mike Brown (MB), Denise Togher (DT), Tony Kelly (TK), Carolyn Parmeter (CP),Vanessa
Woodward (VW), James Wright (JW), Brian Redford (BR), Richard Bowyer (RB)
Katherine Green and Melanie Dawes
Cabinet Office: Mark Smethurst (MS)
Paul Oakes (PO)
1. Teresa Graham (TG) welcomed everyone to the third Board meeting of 2009. The minutes of the meeting on 5 May 2009 were agreed. The action points had been discharged, were in hand or were on the agenda. Teresa congratulated Paul Aplin and Steve Sharratt on their OBEs.
AP: 1 - Invite David Tyrrall (BIS) to the January meeting to update the Board on the progress of EU initiative to give Member States the option of introducing simplified accounting requirements for 'micro' companies.
2. Mark Smethurst (MS) from the Cabinet Office explained the context of the review and why he was attending the meeting. A key aspect of the review is to explore how HMRC engages with external stakeholders such as ABAB.
3. HMRC has carried out a self-assessment as part of the review process and MS would be using this self assessment, to identify a cross section of stakeholders to see.
4. RG said he supports the change process taking place in HMRC and highlighted the excellent work in dealing with customers. TG recommended that MS attend one of the compliance workshops to see how customer focus training is being delivered to front line staff.
8. TG reminded the Board that an early ABAB recommendation was for HMRC to improve communications, especially letters to business.
9. Mike Brown (MB) spoke about the Local Compliance strategy for addressing customer experience and burdens and the standard letters project specifically. As an aside, he informed the Board that 6,000 HMRC compliance staff attended Customer Focus workshops. He provided the Board with some of the key achievements and findings to date.
These included:
8. MB acknowledged that successful delivery of this project required cultural change within local compliance, and confirmed that this has begun, recognising that more work is required. Martin Jones (MJ) and John Whiting (JWh) praised the work to date and believed that there is wider support for the new letters. JWh asked if similar letters would be produced for tax credits matters.
AP: 2 – Mike Brown to feedback this request to CaM and the owners of the Tax Credits letters
9. TG passed on to the Board the positive responses from both Francesca Lagerberg and Julie Kenny. TG suggested to MB that HMRC publicise this work as it is a good news story.
10. CP provided an overview of the early work to develop new targets for Admin Burden reductions post April 2011, and welcomed the input from ABAB. James Wright (JW) emphasised that the ultimate goal should be saving time and costs for business as well as reducing costs for HMRC.
11. TG welcomed HMRC’s approach and the opportunity for ABAB to be involved, but reiterated that changes must make a noticeable difference to business; and that a key way to unlock these benefits would be through policy change.
12. Board members offered some suggestions for areas that HMRC should include in the development of this work: Simon Sweetman (SS) said that changes need to be thoroughly thought through, citing the recent VAT rate change and the associated business implementation costs. RS referred to the doubling in size of the Tolley’s Tax Guide which suggested a large burden increase. PA believes there are still many day to day areas that can be addressed, such as PAYE coding notices. JWh was in favour of looking at wider compliance costs on business but suggested it would be difficult to measure. MJ detailed the problems with taxation status, its complexity and how it inhibits business growth.
13. RG raised the Anderson review which recommended guidance improvements to reduce uncertainty and, therefore, reduce the cost to business of finding out what they needed to do to comply with the law.
14. TG acknowledged that it was appropriate for businesses to pay for certain types of professional advice, but felt they should not have to pay for compliance work; although they may choose to do so. HMRC should make it simple enough for business to meet their tax obligations without recourse to an advisor.
15. TG highlighted that improvements would require financial investment from HMRC, particularly on outdated IT systems. As a steer TG was supportive of the work on wider compliance costs, content with the early framework but, while she acknowledged that financial targets had a place, she emphasised that ABAB would always be more interested in whether burden reducing measures made a noticeable difference to business.
16. Richard Bowyer (RB) provided an update on the Compliance Cost Review programme which reviews the Impact Assessment process, and supports better informed policy making in the wider context.
17. RG questioned whether other Government Departments carried out similar exercises. RB explained that while some policy evaluation takes place, HMRC are the only (confirmed by NAO) department to do reviews in this detail. Given the Standard Cost Model (SCM) was developed in 2005; MJ asked how current information is compared to the original data.CP confirmed that Knowledge, Analysis and Intelligence (KAI) within HMRC modify the data accordingly.
18. JWh supported Policy Implementation Reviews (PIRs) and these should be used to verify earlier IAs. RS suggested that future CCR programmes should concentrate on more complex and detailed IAs.
19. JWh spoke about the introduction of XBRL filing as part of the mandatory electronic filing of CT returns. He explained that CIOT’s concerns are not about online filing per se, but they are concerned about the additional burden on companies having to implement the requirement for accounts in iXBRL –initial cost of software, its availability, re-keying and tagging of existing data etc.
20. TG asked whether agents would be able to cope with the changes. PA said he expected XBRL enabled software would be available next year but it may not cater for all cases, and there were sectors, such as unincorporated associations, that might struggle.
21. SB reiterated the Government’s commitment to have in place systems that work well and are easy to use. As XBRL goes live there will be a ‘soft landing’ to help companies and their agents make the transition. He added that the HMRC software for small companies would be available from 23 November 2009, and HMRC is currently working very hard with software manufacturers to ensure that a range of products are available in time for mandation.
22. JWh emphasised that the main concern was the timing. He said that most companies will want the software before the accounting period starts. SB explained that software developers have told HMRC that they will be able to provide update to their packages after the start of the accounting period which will 'post-tag' data. RS supported the drive towards mandatory online filing but warned that there could be particular difficulties for certain types of companies such as flat management companies. MJ asked if the XBRL had any international standards or certification. SB confirmed that this was the case.
23. The Board discussed the risk of potential fraud in relation to repayments in the SA system. While it was recognised that there is a responsibility for users of the system to maintain their own security by adopting good practice for management, the protection of passwords and sound IT practices, HMRC is keen to work with user partners and the wider business community to ensure that the online facilities remain as secure as possible and to support users in their endeavours to remain safe online. Guidance developed jointly with the main tax agent bodies has recently been issued and is available via the HMRC website.
24. TG thanked all those that had contributed to the ABAB letter sent to Lesley Strathie in response to the Budget publication – Delivering a new relationship with business. SS raised the issue of Revenue and Customs Brief 25/09 and the application of the Social Security (Categorisation of Earners) Regulations 1978 to First Aid training. HMRC agreed to look into this and report back to SS.
AP: 3 – Add ‘Low-hanging fruit/irritants’ to the January 2010 agenda.
Arranged for 14 January 2010 at 100 Parliament Street.
