HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Tuesday, 11 September 2018

What Doesn't Get Measured Won't Get Done

It seems that the government is not able to evaluate the effectiveness of its cuts to the money purchase annual allowance (MPAA), because it does not have the data on how much tax is collected through this allowance.

For why?

HMRC does not hold the data.

The FTAdviser reports that in response to a Freedom of Information request from Canada Life, HMRC said that it does not hold information on the number of individuals who paid a tax charge as a result of breaching the MPAA, or the total value of tax collected through the MPAA charge each year.

The MPAA, introduced in 2015 to coincide with pension freedoms, is the amount a person who has already begun drawing on their pension can pay back into their retirement pot in a given year without incurring a tax charge.

The allowance was cut from £10,000 to £4,000 in April 2017, following an announcement in November 2016.

In its policy paper at the time, HMRC forecast an annual tax benefit of £70m from the measure. But it now emerged the tax office has no real way of evaluating whether this was achieved.
Andrew Tully, pensions technical director at Canada Life, said he was surprised HMRC did not collect those details.
"HMRC introduced the MPAA as a result of the pension freedoms, and then reduced it from £10,000 to £4,000, as it believed people could 'work the system', potentially creating tax leakage in the process.

However it appears HMRC isn't able to monitor the effectiveness of the MPAA as it isn't collecting any statistics on the measure."
Whether in the great scheme of things this particular missing metric really matters or not, who knows?

However, kudos to FTAdviser for their opening headline:

"HMRC clueless..."

Tax does have to be taxing.

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  1. There is an endless procession of crackdowns, initiatives, anti abuse measures, etc that have headline savings or additional revenues trumpeted (and built into Treasury models) that are nothing better than guesstimates with no method or willingness to actually measure the actual outcome.

    Handy eh?

  2. Yet they spend so much energy measuring the "performance" of front line staff? How long they take dealing with "customers", how long they spend at the toilet & how many seconds they are over their break times!