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TaxCalc Blog

News and events from TaxCalc

Steve Checkley (22)
04 January 2016

Behind the Scenes of Working with Government

Just before Christmas, there was a lot of discussion on AccountingWeb regarding quarterly reporting and the notion of there being a petition set up to challenge the strategy as announced in the Autumn Statement.

As an apolitical organisation, we won’t be drawn into whether quarterly reporting is a good idea or not but with 229 comments (at time of writing) on this particular thread, it’s clearly proven to be a fiercely debated topic.

One of the comments that caught my eye during the debate was a call for the Big Four firms and accountancy bodies to use their influence with HMRC.

This gave me two thoughts…

Who’s calling the shots here?

My first thought is with regard to where the policy has come from. You may or may not be aware that we, TaxCalc, provided a heck of a lot of input into the coalition’s pan-Governmental Identity Assurance strategy, which was eventually launched in a much reduced format as GOV UK Verify.

…it quickly became apparent that it was not actually HMRC that was setting policy here.

We first heard of the concept way back in May 2012 when a senior member of a newly formed HMRC digital team came to speak at the BASDA (Business Application Software Developers Association) annual conference. At that point in time, Identity Assurance (or IDA for short) was not much more than a bunch of grand concepts, probably at a slightly less advanced stage than the status of quarterly reporting today.

Once understood, it was clear that IDA posed a fundamental change to the way customers would have interacted with software that shared data with Government systems. It was originally intended to completely replace the Government Gateway) and, had the plan gone through, it would have introduced an administrative burden on businesses and accountants. Having had a fairly difficult experience of the gestation and implementation of RTI and XBRL before it, BASDA immediately kicked off an engagement with HMRC in an effort to shape its development.

However, it quickly became apparent that it was not actually HMRC that was setting policy here. Despite HMRC undertaking the engagement with us software companies to implement, as in the case of quarterly accounts, this policy was coming from a higher power.

It’s from the experiences of our long haul with IDA that we find the software development community has a lot of clout with regard to Government.

As a result, BASDA sought to engage at a level above HMRC: with Government Digital Services (GDS) and HM Cabinet Office (HMCO). I can’t recall how many meetings I went to between HMRC, GDS and HMCO over the two years (it was a couple a month) but totting up the train tickets to London and the work I did reading Good Practice Guides, attending workshops, sitting through seminars, hosting industry meetings, writing articles, presenting and so on, it would have amounted to a good few months solid of senior management time.

We learned a few things out of this experience:

  1. With IDA, GDS/HMCO set the theory and the other departments and agencies were handed the implementation. If, as was becoming clear, the implementation wasn’t actually practical, HMRC weren’t able make suitable changes because they were somewhat straightjacketed by the theory. Sure they lobbied for changes and BASDA did too through separate engagement but when we took this up with GDS/HMCO, they were more concerned with the theory and concepts of something that would work across Government departments and cared less about practicality. I can understand why this approach was taken but it did create something of a catch-22.
  2. HMRC’s strategy for technical implementation and the education of the taxpaying public and agents was, at one stage at least, not joined up at all. I felt that we software developers were very well informed but, unfortunately, articles I read that advised accountants on how it would work were different to what we were on track to implement. This was worrying since, as providers of software at point of use, we would have suffered significant costs in customer re-education.
  3. It was possible to influence strategy. Government is willing and does listen but it required others and myself in the software industry to give up significant amounts of our time. We developed loud voices and networked like crazy to make the right connections. Yet still, we heard of Discoveries (Agile methodology speak for research) that began without our knowledge and getting on them was sometimes a challenge, especially if they had started. Finding out what was going on began to verge on obsession. Thankfully, as a result of our contributions, from other parties and those of the teams we worked with at HMRC, IDA for businesses and organisations was evenutally dropped.
  4. Despite HMRC holding separate meetings on the matter, we couldn’t really find much evidence of the accounting bodies taking IDA as seriously as we software companies thought they should. Indeed, one of the larger bodies determined to take a “wait and see” approach to IDA. That being said, one body was noticeably concerned but with a small membership, I fear lacked the necessary clout to be fully heard.
  5. HMRC learned about software developers’ desires for better APIs (Application Programming Interfaces – code that lets our products talk to HMRC’s systems). Thankfully, we’re seeing this experience manifest itself in HMRC’s separate API strategy, which will lead to better, more useful software for practitioners.

I believe that HMRC have learned from IDA. Documentation, however incomplete at this early stage, is consistent across the audiences to which HMRC communicate. Once again, there is and will continue to be, opportunities for individuals, businesses, accountants and other organisations to give their time to consult on the matter. Of course, there’s an opportunity cost to this in giving our time but it’s one that I know TaxCalc (and our valued beta test customers) will make. 

Finally, with digital and quarterly reporting being such a tangible concept, I feel that the accountancy bodies are giving and will continue to give a more focused attention. Hopefully, their views on the matter tally with those of the software industry. To find out, why not contact your professional body to determine their stance?

The influence of software developers

Working in this industry, a software developer is always going to be caught between the regulatory framework (HMRC, Companies House and so on, and their political masters) and the wellbeing of its customers. In the middle of this, as a commercial organisation, we try to make a buck in the process!

It’s a fact that, at the end of the day, to stay in this business one has to go along with Government and HMRC plans and develop products that meet the technical specification, whether we agree with the strategy or not, and yet remain desirable to customers. However, since TaxCalc is a company that is all about the customer experience, we will fight fervently for the best possible outcome.

It’s from the experiences of our long haul with IDA that we find the software development community has a lot of clout with regard to Government. We are, after all, collectively responsible for the submission of approximately half of all Self Assessment returns and three quarters of Corporation Tax returns. That’s a lot of lost revenue to the Exchequer should things not go to plan. 

Those that know TaxCalc’s senior team will be aware of how passionate we are about engagement with Government and the amount of time that we’ve spent working with the different strands to get the best outcomes for our customers. It’s why we started this blog. It’s why we write articles on such crucial matters. It’s why we speak at seminars, contribute comments to the press and try to get the message out.

For those reading this blog that aren’t TaxCalc customers (yet), I suggest that you take up the matters of Digital Tax Accounts and Quarterly Reporting with your supplier and ask what they are doing about this for your benefit. It’s only by working together, as an industry and in conjunction with the professional bodies, can we achieve the best outcome for everyone.

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Tony Margaritelli (7 years ago)

This detailed and obvious heartfelt article just goes to show what the ICPA have been campaigning for namely meeting being held with all parties represented from HMRC, accountants, developers and businesses. Only then can each party fully have an idea of what is going on and make meaningful representation. by keeping everyone separate means they are able to control the flow of information and makes reference to other parties without fear of contradiction. We all give our time freely to help make the system work as best it can and I feel that a sensibly constituted body would be a great step forward. As regards "quarterly Reporting" it simply shows a frankly laughable understanding of small business and the way they work. Tony Margaritelli Chair ICPA
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