General management, Working practices

Some nice words about HMRC

Photo by Images_of_MoneyI thought it was time someone said something nice about HMRC. There will be an obligatory grievance at the end which relates to cost and complexity. But there needs to be some sugar to make the medicine go down.

This was inspired when browsing past posts from Simon Guilfoyle, police inspector and systems thinking advocate. He draw a very detailed cartoon expressing his frustrations with a registration process for an unnamed government service. This was very quickly outed as belonging to HMRC, and it brought back mixed feelings for me.

The nice words: I have had nothing but excellent experience with various HMRC helplines over the years. Every time I have called them they have answered within a reasonable timeframe, have been unfailingly polite, and every single time have answered my query comprehensively on the same call. This is unusual for any helpline, let alone one for a particularly large government organisation. I always think what an impressive operation their helplines are.

And here is the grit. I’m also always saddened that this is an impressive achievement. I’m saddened that I have to ask for help in the first place. Those helplines are there to handle “failure demand”: the demand to sort out problems in the system. After all, it’s not as if there is a lack of information freely available online about our tax system. But despite all this information I still need help. And that’s because the system is so complicated.

The vast and no doubt expensive system of HMRC personal help would be a lot less vast and expensive if there were fewer complications in the first place. I could go on at length; I’m sure you don’t want me to. So here is one example I keep returning to: National Insurance contributions.

There are different classes of NI contributions. They are not only divided into Class 1, Class 2, Class 3, and Class 4, but there is also a Class 1A. Then there are limits and thresholds (which sound pretty similar ideas to this outsider), upper and lower versions of these, and a distinction between primary and secondary. Payments may be fixed, or based on a percentage, or both.

If this was the entirety of our personal taxation system that might be okay. But this is just a small part compared to income tax. If you had to design our tax system from scratch you would be judged a pretty twisted individual if you made it look like it looks today.

I like paying tax. It’s a convenient way to make a tangible contribution to society. I like being able to fund health staff, teaching staff, police officers, and much more. These are people and institutions who help my loved ones. There are some other things I’m less keen on funding, but that’s the price of a democratic society, so I’m okay to pay it.

I think I understand why our tax system is complicated. I think it’s because politicians want to force behaviours that otherwise wouldn’t happen. Or they want to dress up certain truths. For example, National Insurance is based on earnings, so it could be eliminated and rolled into income tax, thus eliminating a whole raft complexity. It wouldn’t yield exactly the same result, but it would all even out in the wash. Of course, that won’t happen, because there is there is a political benefit to appearing to ringfence citizen insurance costs, and also because… it’s complicated, and complicated things are difficult to change.

Similarly, any other complicated system near you or your workplace is unlikely to be dismantled or reformed any time soon because it’s just too difficult to unpick it.

This does, of course, relate closely to my own line of work. Those of us who work in information technology get to see at the most detailed level the cost of complications and complexity. We have to implement every edge case. We have to make sense of the whole. We find the bugs inherent in the fundamental logic. We get pointed to as the capital cost as the system is built. We get pointed to as the operational cost as the system is maintained. We see how complexity is exploited by individuals seeking loopholes, and how more complications are added as an attempt to close those loopholes. And then we live through the pain when we’re asked to integrate this complicated system with the next complicated system. The costs multiply.

Simplicity reduces cost and is easy to manage. Complicated systems increase cost and manageability disproportionately. This is why I am simultaneously saddened and impressed every time I call HMRC.

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