Failure Is Key To HMRC Strategy - Pimping Out Its Front End

Phil Pavitt, former CIO of HMRC, has put his head above the parapet and claimed that many government departments (including HMRC) are likely to fail in their quest to be truly digital because they are still reliant on legacy systems.

Pavitt, now CIO of Specsavers, was speaking at Nimbus Ninety's Ignite conference.

He is quoted by Computing:

"Where the UK government has played it wrong in many of its departments, is that it has pimped out its front-end, but it has not changed its legacy engines - that is not truly digital.

That will fundamentally catch them out as it has caught out many companies in the UK and Europe already.

People think digital is having an app - that's why people are getting it wrong and I know because I've worked for government for so many years, and for so many years they thought that the app was the front bit, but actually it's the whole experience."

Interesting, if you read carefully what he says, he is basically saying that despite working for government for so many years he was not able to influence the incorrect mindset of the government.

A sad legacy indeed!

Pavitt then went on to talk specifically about HMRC:

"It's one of the largest government bodies that's online anywhere in the world, but you try to do your taxes online - it's not the easiest thing is it?"

Adding that failure was a key part of any digital strategy - something he emphasised in his first presentation at HMRC:

"I said ‘we are going to make so many mistakes it is going to be painful, we are going to be on a Daily Mail front headline and indeed we were several times."

Warming to his theme he then had a well deserved pop at consultants:

"The consultants that sell that to you are lying to you, they are selling their goods. It's about the ease of the user, and the subtlety is small but significant.

Most organisations say that you have to spend a whole pile of money to do this, and I've personally never had that experience; I believe it's a fundamental lie from the IT supplier industry in that space.  

Digital is something that has to come from the legacy engine to the very front end and if your digital stack doesn't do that or you're told you can only do it with a huge investment, that's not true."

In a nut shell:

- HMRC has wasted a large amount of money

- HMRC will fail, because its legacy systems are crap

- Pavitt was ignored when he worked for HMRC

Hindsight is wonderful when you have left for the private sector!

Tax does have to be taxing.

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Phil Pavitt To Leave Aviva

My thanks to a loyal reader who has written that Phil Pavitt (ex CIO of HMRC) will leave Aviva (a company he joined in January 2013) next month.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

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However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



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Chris Mortlock To Leave HMRC

My thanks to a loyal reader who penned me a line over the weekend about the impending departure of Chris Mortlock Head of Operations & Security - IMS Live Services at HMRC (as per LinkedIn).

As per Agile Across The Board:

"As Head of IT Solutions Development and Operations at HM Revenue and Customs (HMRC) Chris is accountable for: the update, development and operational running of systems and services that collect in excess of £130bn a year for the UK; and the provision of systems and services to UK Border Force and law enforcement communities that help protect the UK. Chris is currently leading the development teams that are enabling HMRC to deliver a step change in its digital service offering through the development of digital services using agile methodologies.

Previously, Chris held the position of Deputy Director of Security & Risk at HMRC, where he was responsible for the transformation of the IT security processes and systems after the Poynter Review."

Subject to confirmation he will depart for CSC (a provider of consulting and IT services to many of the UK’s leading organisations) on 20th December 2013.

CSC states the following:

"Many of our clients are responsible for the country’s infrastructure and security – including the UK Border Agency (UKBA), National Grid, Network Rail, and Transport for London, Royal Mail Group and the NHS – and they use technology powered by CSC."

Interestingly one of its clients is Aviva, which Phil Pavitt joined in January this year as did Mark Hall in October.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Poacher Turned Gamekeeper

My thanks to a loyal reader who pointed me to a press release that HMRC issued yesterday, concerning the appointment of a new HMRC Chief Information Office (CIO), Mark Dearnley.

Dearnley comes from the private sector from a company that loyal readers may well have heard of........Vodafone....cough!

Sadly I see he refers to HMRC as having a "customer base", oh dear!

Anyhoo, Dearnley has quite a task ahead of him as CIO's within HMRC don't seem to last the course. Phil Pavitt moved from the role in October 2012, then left HMRC in November and his acting replacement, Mark Hall, evidently didn't cut the mustard.

Does anyone know what has happened to Mark Hall, ie is he still in HMRC?

I ask because rumours abound that he was not best pleased at being snubbed.

HMRC won't say why Hall had been denied the promotion to CIO, as per Computer Weekly:

“The CIO recruitment process was subject to fair and open competition overseen by a civil service commissioner. Following a rigorous and transparent selection process, an external candidate was chosen. We do not comment on individuals who may have been on the interview panel. Mark’s replacement as CIO will be announced in due course,”

It also appears that the role of CIO is being downgraded across Whitehall.

Interesting times ahead methinks!

Anyhoo, here is the press release from HMRC:

"HM Revenue and Customs (HMRC) has announced the appointment of one of the country’s leading IT chiefs as the department’s new Chief Digital and Information Officer.

Mark Dearnley, who is currently the Chief Information Officer (CIO) of Vodafone UK, is joining HMRC in October. He will take control of a £500 million-a-year IT operation that serves 45 million individuals, 4.8 million businesses and 65,000 HMRC employees. He will be responsible for implementing HMRC’s £200 million digitisation programme and accelerating the planned delivery of online services for all taxpayers. He will also lead HMRC’s physical, personnel and information security.

Mr Dearnley has been CIO at Vodafone UK since 2010 with responsibility for IT supporting 19 million customers. He led a programme to overhaul Vodafone’s business-critical information systems and was named Oracle Global Business Unit CIO of the Year in 2012 for this achievement. Mr Dearnley also restructured Vodafone’s IT operating model and introduced Cloud-based technologies into the mobile operator. 

David Gauke, Exchequer Secretary to the Treasury, said:
“It is an indication of the scale and seriousness of the Government’s digital ambition that one of the UK’s most experienced CIOs is leaving the private sector to take on this major role. Mark Dearnley’s appointment to HMRC is evidence that Government has the cutting-edge challenges that can attract the very best leaders in IT to public service.”

HMRC Chief Executive, Lin Homer, added:
“Mark is an exceptionally experienced CIO, with strong leadership and change management skills as well as an accomplished technical background across a spectrum of IT disciplines. HMRC has already embarked on an ambitious programme of digitisation to provide taxpayers with modern online services and Mark is the right person to deliver that for the UK.”

Mark Dearnley said: 
“I have spent my entire career in the private sector, mostly in customer-facing businesses. But no private business in the UK can match the customer base, scale or complexity of HMRC, which makes this role irresistible. I am thrilled to have been appointed and can’t wait to get started.”

Notes for editors:

1. Mr Dearnley was recruited through a fair and open competition under the Government’s business appointment procedures for senior civil servants. The recruitment process was overseen by the Civil Service Commissioner, who led a panel that included two Permanent Secretaries and a Non-Executive Director. The UK Government Chief Operating Officer was consulted throughout the process. The appointment was approved by the Prime Minister.
2. The annual salary for this Director General role is £180,000, which is at the Senior Civil Service (SCS) 3 pay band.
3. Mr Dearnley is CIO of Vodafone UK, where his primary focus is using IT to improve the customer experience. He has worked internationally in the telecoms industry over the last decade.
4. Prior to Vodafone, Mr Dearnley spent six years at Cable and Wireless, as CIO and in other senior IT roles. He also spent three years at Boots the Chemists, first as Chief Operating Officer for the start-up of Boots.com and latterly as Programme Director.
5. He has a degree in electrical and electronic engineering from Brunel University and is a Fellow of the Institute of Engineering and Technology and British Computer Society."

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

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What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



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Phil Pavitt Leaves HMRC's Sinking Ship

In October I wrote about our old chum Phil Pavitt, who apparently had been moved from his role as HMRC's ubiquitous Chief Information Officer:

"I see Pavitt is no longer HMRC CIO. Apparently he has been replaced by his deputy Mark Hall. Pavitt's new title is something like Director General of Security and Information etc. 

Anyone know if this is promotion, demotion or a move sideways. 

Maybe he is just getting off the track before the RTI and Universal Credit express smashes into the buffers killing all on board and letting his underling take all the blame for any train wreck."

One day later I noted that he had in fact been "promoted" to "Director General Change, Security and Information".

Now here's the "funny" thing, that promotion appears to be pointless (unless it was designed to move him away from RTI).

For why?

Pavitt is leaving HMRC.

Quelle surprise!

He is joining Aviva in January.

RTI of course won't be live in January, funny that!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Whither Pavitt? II

Yesterday I asked if Phil Pavitt had been moved from his role of Chief Information Officer, as his CV on the HMRC site made no mention of this change.

My thanks to a loyal reader who posted a link to the HMRC organisation chart, which shows that Pavitt has indeed been moved. His new title is "Director General Change, Security and Information".

Am I correct in assuming that this is a new position within HMRC, ie did anyone hold this position before?

Mark Hall is now the Chief Information Officer.

Oddly though, as at the time of writing, Pavitt's CV on the HMRC site remains unchanged.


Tax does have to be taxing.



Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Whither Pavitt?

My thanks to a loyal reader who posted this update about our old chum Phil Pavitt, who apparently has been moved from his role as HMRC's ubiquitous Chief Information Officer:

"I see Pavitt is no longer HMRC CIO. Apparently he has been replaced by his deputy Mark Hall. Pavitt's new title is something like Director General of Security and Information etc. 

Anyone know if this is promotion, demotion or a move sideways. 

Maybe he is just getting off the track before the RTI and Universal Credit express smashes into the buffers killing all on board and letting his underling take all the blame for any train wreck."

My question is this, is the above true?

I ask because:

1 Pavitt appeared to be a great "success" in his role (eg as I wrote in March: "Pavitt is single handedly turning HMRC into a fit and lean (no pun intended) technologically sophisticated organisation"), and

2 His CV on the HMRC site has not been updated to reflect this move:

"Phil's Executive Committee portfolio is Information Management Services and Change in HM Revenue & Customs (HMRC). He took on the role of Chief Information Officer of HMRC on 2 September 2009.

Phil has over 25 years experience in both private and public sector organisations and was previously CIO of Transport for London, where he led a major overhaul of the IT function. Prior to this he had held positions as CIO at OneTel and NTL.

Alongside his work commitments, Phil is a regular public speaker on a range of topics from leadership to IT delivery. He is also a trustee of Bar 'N' Bus an outreach charity working with young people in South East Essex."

Please can someone advise if he really has been moved, or if this comment is an error?

Thanks.

Tax does have to be taxing.



Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC's Head In The Clouds

HMRC have announced that it will be moving data currently stored in local offices to G-Cloud Services (a cloud based storage system), between now and Spring 2013.

A somewhat "challenging" timeframe I would have thought!

The contract has been signed with Skyscape Cloud Services.

As per the company website:

"The Skyscape Cloud Alliance partners; QinetiQ ,VMware, Cisco, EMC, and Ark Continuity bring together an end to end cloud solution which is Skyscape. This Alliance also provides a collaborative resource which drives innovation and our technical product development programme.....

QinetiQ is a FTSE250 company and one of the top 10 largest UK employers of science and engineering graduates. QinetiQ is at the heart of Skyscape and uses its domain knowledge to provide technical advice to clients in the global aerospace, defence and security markets. QinetiQ’s unique position enables it to be a trusted partner to government organisations, predominantly in the UK and the US, including defence departments, intelligence services and security agencies, where its world leading cyber security capabilities raise awareness of and deliver solutions for hacking and malware."

As per Wikipedia:

"In 2007 the National Audit Office conducted an inquiry into the privatisation of Qinetiq to determine whether UK taxpayers got good value for money from the sale. The NAO inquiry looked at the following issues:

• choice of privatisation strategy;
• management of the process (the split of the Defence Evaluation and Research Agency into two, the sale to Carlyle and the flotation);
• costs incurred and the proceeds achieved; and,
• whether the deal met its objectives.

In November 2007, the NAO reported that taxpayers could have gained "tens of millions" more and was critical of the incentive scheme given to Qinetiq managers, the 10 most senior of whom gained £107.5m on a total investment of £540,000 in the company's shares. The return of 19,990% on their investment was described as "excessive" by the NAO. The role of Qinetiq's management in negotiating terms with the Carlyle Group, while the private equity company was bidding for the business, was also criticised by the NAO. Carlyle bought a third of the business for £42m which grew in value to £372m in less than four years."

Here is the HMRC press release in full:

"HM Revenue and Customs (HMRC) has become the first Government department to sign a contract for the delivery of G-Cloud Services over the Public Services Network.

The department has signed a contract with Skyscape Cloud Services for centralised data storage in the G-Cloud. Moving to cloud storage will provide cheaper, more secure and greener data storage for HMRC. It will also enable the department to move forward with its deployment of the Government End User Device Strategy, designed to increase the efficiency of the public sector and improve front-line services.

The contract was awarded via the UK Government G-Cloud framework, which enables the rapid sourcing and deployment of secure, low-cost utility services to the UK public sector. This is the first major service contract to be awarded via the G-Cloud by an organisation as large as HMRC.

For HMRC the change will mean moving data currently stored in local offices to cloud storage between Autumn 2012 and early Spring 2013. This will be the first deployment of G-Cloud services over the Public Service Network, established to improve Government communication links and cut costs.

HMRC's Chief Information Officer, Phil Pavitt, said:

“This change will save over £1 million a year in running costs and will increase reliability and security of HMRC’s internal IT services. The Skyscape contract is a major step for HMRC in moving away from traditional ways of working with large service providers. And it’s a great example of how we’re exploring smarter, more innovative solutions that make life simpler for us and help us provide a better deal for our customers.”

Notes for editors
1. For more about the G-Cloud programme - http://gcloud.civilservice.gov.uk/"

As Barry Murphy, technology partner at PwC, warns in TechWeek:

“Getting the technology in place is just the first leg of the process.  The biggest challenge is the behavioural change that needs to follow.

Too often the failure of new systems is blamed on the technology when more often it’s because people haven’t adapted to them.”

We shall see!

Tax does have to be taxing.



Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Taxwise.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC The Sinking Ship - Mike Clasper Resigns

Last Tuesday I wrote the following:

"I was gemused to read an article by Tony Hetherington, in which he lambastes HMRC's executive structure.

One particular issue he raised concerned Mike Clasper (the semi invisible Chairman of HMRC). Hetherington asked HMRC whether anyone represents "ordinary PAYE taxpayers" on HMRC's board.

The answer from HMRC was rather interesting in that, for reasons best known to themselves, HMRC lied.

Quote:

"Our chairman is also chairman of Which?"

 That's grand, except that Clasper isn't chairman of Which?

Clasper is not even a member of its governing council, instead he chairs an offshoot company ( Which? Limited) that handles the commercial activities of Which?, but not Which? consumer campaigns.

Why did HMRC lie about something that could be (and was) so easily checked and proven to be wrong? "

Fortunately for HMRC it seems that it won't have to lie very much longer about Clasper's other roles.

For why?

He has resigned, although he will probably remain physically in his role until the end of this year.

This is rather ironic that he has resigned, given that I and a loyal reader were only just discussing the fact that one of the major problems that HMRC faces is its lack of continuity of policy/direction:

"Anon: Ken One of the major problems at HMRC is lack of continuity or consistent policy direction at the top. There is nothing wrong in principle with bringing in people from the private sector to provide management expertise but the reality is that the three year contracts under which much of Excom is employed results in inevitable leadership churn. 

For example, I believe the CIO Phil Pavitt's engagement is due to expire in September 2012 and he will probably be leaving HMRC this year. This means that HMRC may have a new CIO right in the middle of one of the most crucial computer projects in its history. I find it difficult to believe that Pavitt's replacement will be able to avoid the temptation to tinker with his predecessors technical strategy and may even want to do things radically different. 

The musical chairs at Board level might be great for for ambitious career free booters keen on lucrative one off gigs that add notches to their CVs but it breeds a corrosive short termist view within the organisation which means long term planning is almost impossible.

Ken: You have hit the nail on the head, in fact the problem wrt continuity is a blight that affects many gov departments (and indeed the private sector) ie:

"Five year projects being run by two your managers".

Specifically a project (eg restructuring or IT implementation) that will take many years to implement and bed in requires consistent high quality leadership.

"High quality" leaders (or rather those who are ambitious) have two year mindsets (always looking for the next step up the ladder).

These people take on projects like this on the explicit understanding that they will be promoted in two years, if they make a "success" of it.

The best way to make a "success" is to change whatever the previous managers did, blame him/her for all cock ups, and implement a 100 days "quick wins" policy etc."

What with Homer being new (and not exactly a career "success story" based on her past) Hartnett leaving and Pavitt (as per above) possibly coming the end of his contract this year, this additional departure from the high command leaves very few experienced people on the bridge of the already fatally holed HMRC.

Evidently Clasper has seen the writing on the wall wrt HMRC's future, and wants to move on to more rewarding opportunities. Anyone care to guess which "customer" of HMRC he will join, as is the norm, to act on their behalf when they are negotiating their future tax bills?

It will be interesting to see who replaces Clasper, and indeed whether Clasper leaves HMRC with some form of "golden goodbye".

I wonder who is next to go?

Rats know when ships are sinking.

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Phil Pavitt Visits The Coalface

My thanks to a loyal reader who advises me that Phil Pavitt (HMRC's go to man for all things IT) is visiting the coalface today.

A fantastic opportunity for staff to discuss their IT and systems problems with him?

Unfortunately, those of you who may be busily preparing questions to ask him will be severely disappointed.

I understand that he is only meeting a few people, and that his visit is not timed to start until 17:00 (just a few minutes away in fact).

Oh, and he's only staying for 30 minutes!

However, if you do get a chance to speak to him please ask him how RTI is really going!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Online Service Availability

It seems that Phil Pavitt will have a very busy Easter, as there are a number of system upgrades going on in HMRC.

Services will be limited or unavailable between 21.00 on 8 April to 6.00 on 11 April 2012

HMRC’s online services will be closed over Easter for planned system upgrades.

All services will be affected including VAT, corporation tax, self assessment, PAYE and tax credits.

HMRC Online Services will start to close from 21.00 on Thursday 5 April and will remain closed until Wednesday 11 April 2012.

However, not all services will be completely unavailable throughout that period. For example, it will still be possible to submit self assessment returns using commercial software except for a short period (Sunday afternoon), though there will be a delay in getting the electronic acknowledgement.

It is advisable to check the downtime for the particular online service you plan to use. Details for each of them can be found at HMRC Online Services

Tax does have to be taxing.

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Professional Cover Against the Threat of Costly TAX and VAT Investigations

What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Jackpot!

My thanks to a loyal reader who penned me an email the other day, advising me of a wee problem on the horizon for HMRC partly caused by the Treasury.

The Treasury has come up with a "terrific new wheeze" (well "new" is an exaggeration, this was actually formulated in the tailend of 2010 and is set to be implemented 1st Feb 2013) relating to the taxation of fruit machines etc, known as Machine Games Duty (MGD).

MGD replaced Amusement Machine Licence Duty (AMLD) in order that HMRC avoids a conflict with the EU 6th directive about not taxing gambling. AMLD taxed the machine, profits from the machine were subject to VAT (the VAT could then be recovered from the purchase and operations of the machines).

However, MGD stops the trader from recovering the VAT paid.

So far so good!.

However, as with all the best laid plans of mice, men and Treasury officials there hides a fly in the oinkment.

The problem lies in the implementation of this new tax.

The resources for the implementation of the tax (ie staff and computer systems) is, so I am advised,  woefully inadequate. Currently the UK has approximately 1000 Bookmakers, 300 Bingo companies, 4 or 5 Pool Betting operators and about the same number of casino operators - plus the national lottery. AMLD licenses, whilst large in number, are usually issued to traders on an annual basis as there is an advantage built in to getting 12 month licenses, and it is fairly cut and dried if the tax is being paid.

Under the new system there will be another 42,000 quarterly returns, thus massively increasing the workload of HMRC's accounting centre.

How many extra staff will HMRC allocate for this increased workload?

Approximately 12-15 extra staff (about double the current number), they will help to input the forms. Unfortunately, despite Phil Pavitt's alleged superhuman abilities, the new computer system is not yet available for them to train on. I am also advised that the budget for development of the computer system is already "more than spent", with nothing to show for it.

Now I can hear some wise heads tutting, and asking why input is not done online (as HMRC prefers for so many other taxes etc). Well it seems that the Treasury insisted that traders be allowed to put in paper returns.

The origins of MGD can be found in the systems from Australia and New Zealand tax authorities, except that in Australia and New Zealand there are enforced computer audit functions and bank accounts from which the tax authority can take the appropriate tax amount.

Additionally, the UK legislation does not force traders to keep individual machine records. This means that the tax is almost impossible to audit, and it will make it difficult to work out what the traders' normal tax liabilities are from the start.

Oh, and one more thing, there is no machine registration within the new HMRC system.

Problem?

Yes, the tax covers two categories of machines which therefore need to be known and identified.

Did HMRC warn HMT that this new tax won't work?

I am advised that they did, bit that the warnings have been ignored!

Sadly another accident waiting to happen, which will be blamed on HMRC (even though in this instance it appears not to be HMRC's fault).


Tax does have to be taxing.

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Phil Pavitt - HMRC's Human Shield

Well you could have knocked me down with a feather, when I read in the Guardian the other day yet another article about how Phil Pavitt (HMRC's CIO extraordinaire) is single handedly turning HMRC into a fit and lean (no pun intended) technologically sophisticated organisation.

Are their no limits to this man's talents and skills?

I am wondering if the recent media deluge of stories about the ubiquitous Mr Pavitt is more to do with a diversionary media strategy being employed by HMRC (to deflect attention away from..what's her name..oh yes, Lin Homer), rather than anything specific relating to Pavitt's skills and abilities (with which he seems to be remarkably "well endowed").

Anyhoo, here is the article in full (please feel free to comment and highlight the reality from the coalface):

"The Real Time Information (RTI) programme may be HM Revenue and Customs' most high-profile IT project of the moment, but the department has a whole swathe of significant technology projects under way.

"RTI is definitely the single biggest programme and the most high profile because of its intercept with universal credits, but it can't be the only thing we do in the next two to three years," says its CIO (chief information officer) Phil Pavitt. "We have 40-odd projects that are IT related. They're nowhere near as huge as RTI in terms of expenditure and what they will deliver, but some of them will have an enormous impact.

"For example, one of the programmes we have is about closing the tax gap, which is one of the big spending review targets for us, and will probably bring in £1bn to £2bn of income. We have to balance the resources, but RTI is not overbearing against all the others."

The roots of much of the work are in the department's Change Plan for 2011-15 which has set the stage for a planned reduction in headcount from about 70,000 to 56,000, and an effort to increase the proportion of staff working on compliance and enforcement to more than 50%.

"The mix of what the 56,000 do is that a lot did back office jobs that we are automating, and maybe 7,000 or 8,000 will change their role, the bulk of them working on enforcement and compliance," he says. "It's a big cultural transition and an effort to make us more efficient."

While there is no one big IT programme that will facilitate the transition, around half of the 85 projects that will contribute to the change have a significant IT element.

"Some of the projects are very IT related," he says. "For example, extending our caseload system that enables us to move cases in our enforcement and compliance area rather than shifting big lumps of paper in cases; that's a significant investment for us.

"We have a Connect system to take on all the data we get from government departments, and are able to build pictures of people so we can see where there may be fraud. These are large IT investments.

"Then there are others just to speed up the system and give us more capacity - we've just invested in 25,000 new desktops under the Aurora programme. Just having desktops that work better gives us more uptime: for example, the call centres are now handling twice the number of calls they handled two years ago, with very little downtime."

Sunset for Aurora

Under Aurora, HMRC also retired 66 of its core applications to bring the number below 750. It's a move that Pavitt believes will probably see Aurora's exceed its targeted savings of £160m a year, and one that has involved something of a culture shift in its attitude to IT.
"We've moved from a very risk averse position in retaining all of our applications, even if we never use them, to taking away from the estate all the areas that are overly complex or that we no longer need," he says.

Aurora however is in its closing stages, and will be replaced by Pavitt's 13 Machines strategy. Under 13 Machines, HMRC is aiming to reduce the number of business critical applications still further, to 200 running on 13 platforms by 2015-16.

13 Machines is not expected to produce savings on the scale of Aurora, as the earlier programme has taken the low hanging fruit, and its business case is currently being kept confidential. It is, however, expected to make a big difference, according to Pavitt..

"Some systems are of an age or complexity, or we struggle to find the right level of support, so that they require immediate attention. Some are used in an area where the policy has changed, and it has such a dramatic impact that as we adapt to the policy we might as well change the core systems. In some cases we may have 20 similar platforms that we can take down to one.

"We have a complex calculation to help us do all this, but we've agreed with the business a roll out schedule to do those in some sort of order.

"RTI is a classic case that will retire and replace some of the classic applications."

HMRC is also working to improve the quality of its data. Pavitt describes it as a "data monster", processing more than any other government department, dealing with 35 million people and up to 12 million businesses, and managing more than 400 tax regimes. Consequently, preserving the quality of the data takes a massive effort.

"Data has been a real challenge for us, and we're piloting within RTI a data cleansing mechanism," Pavitt says. "Everybody can run a data cleansing project, and within a minute the data begins to degenerate because old behaviours come along.

"We've begun to standardise the data inputs to us as an organisation. We don't have the ability to mandate what you have to give, but we do have the ability to show what it could be, and if you provide data like this how much easier it could be on you as the employer and on us as the processor."

RTI is being used to introduce data frameworks, and the master and slave data concept, a metadata concept that involves a set of core data, such as someone's address, and more variable data that cannot override the core.

"If that works well in the personal tax area we'll take all of those principles and begin to slowly move them across HMRC," Pavitt says."

Tax does have to be taxing.

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Spreading The Load

Loyal readers will be aware that Phil Pavitt (CIO of HMRC) has been somewhat blowing his own/HMRC's trumpet recently about how HMRC has reduced its IT spend.

Some of you (for shame!) have been a tad cynical about the veracity of his boasts. Well it seems that, whilst costs to HMRC may (or may not) have been reduced, the costs to HMRC's "customers" of implementing HMRC's flagship (akin to the Mary Rose) IT development Real Time Information (RTI) have gone up.

HMRC has revised its figures for the financial burden that Real Time Information (RTI) will have on employers. Payroll World reports that there are a number of costs being imposed on employers from having to use the new system:

- There will be a one-off transitional compliance cost (at least £120M) for firms as they begin to submit RTI.

- Offsetting HMRC's estimates of employers' savings (£330M per annum from 2014) from using the new system, will be the costs of the new administrative burdens being placed on employers by HMRC (ie realtime data collection/submissions each time employees are paid). HMRC believe that this will cost £30M per annum.

- Unknown costs of software development (needed to use the new system) which will be passed on to the employers.

This is know as spreading the load, so that HMRC's costs are kept down.

Needless to say, all of the above is based on the assumption that RTI actually works and comes in on time and on budget.


Tax does have to be taxing.

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To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Everything Is Wunderbar!

My compliments to Phil Pavitt (Chief Information Officer of HMRC), who is now rather ubiquitous in the media and is currently outshining Lin Homer in the "column inches" devoted to his achievements.

Recently I noted that Pavitt was proudly claiming that he/HMRC had halved HMRC's spending on IT from £1.4BN to £700M in two years. I was "shocked and appalled" by the reactions from some of the cynics within my loyal readership, who suggested that Pavitt may be telling porkies:

"Those of us who have followed the, erm, spotty career of Phil "Employment Agency " Pavitt will understand that his relationship with the truth has always been somewhat difficult..........."


"One suspects most of the 'gains' have come from consolidating software onto fewer physical boxes and using more 'virtualisation' as this is the flavour of the month in IT at the moment. However, the fact you are running a virtualised Windows server on a machine that is also running a virtualised Unix Server etc does not mean you have any less operating systems or software to support just less hardware.

So Pavitt's claim to have only one platform is almost certainly being extremely economical with the truth Since much of the cost is taken up by the former not the latter I doubt that these 'savings' are going to be around for long as overtime software license increases will eat into the savings.

Virtualisation can create its one issues as shared resources such as disk, memory and cpu capacity may have to upgraded over time if one of the systems using the resource has been poorly specified and is subsequently found to need much more grunt. For example, general upgrade of CPUs on shared machine can feed directly into the bottom line as licensing costs of software are often based on CPU Mips. Thus if you enhance the CPUs on a box because one system or application needs more processing speed then all the other systems software licenses may also be hiked regardless of whether they need the extra power or not. 

This is the ticking time bombs Pavitt is leaving for his successors."

Such cynicism has not deflected Pavitt from telling the world about another saving (I assume that this is on top of the £700M IT saving that he was talking about the other day?) that HMRC has made. Apparently, HMRC will save more than £200M by 2017 after renegotiating its Aspire outsourcing contract with Capgemini.

Aspire covers IT services including desktops, laptops and a number of tax and credit systems such as online VAT filing. The contract, which is led by Capgemini and includes some 360 other suppliers, was renegotiated in January.

It most certainly needed some renegotiation, for as I wrote in February 2012:

""The Aspire contract between HMRC and Capgemini covers a 13 year period and was originally valued at £2.8 billion.[49] This contract is a case study of what is wrong with the present procurement culture. Such a large contract is too complex to manage. The assessment of costs and benefits is opaque and it commits too much power and money to a single supplier."

Anyhoo, as well as lowering the cost per unit of IT services, the renegotiations will give HMRC greater control over the volume of work going through Aspire, according to the Cabinet Office. HMRC will also be able to control the Aspire subcontractors directly, which was previously the responsibility of Capgemini.

Pavitt is quoted by the Guardian:

"No longer do we have a unique SI relationship with Aspire and Capgemini.

We have introduced competition at all levels. There's no longer exclusivity between us and our partners."

HMRC is currently introducing 25,000 new PCs to its offices, and Pavitt claims that its IT service levels were at 99.93% "our best ever".

Pavitt said:

"We have cut our IT costs, transformed IT and made it sustainable, stabilised our services and reorganised our business processes. We have some way to go still, but we are delivering sustainable change."

So there you have it, everything is wunderbar!

There is no stopping this man!

However, I am always interested to hear from those of you who have to use the systems and have insight into the reality behind the claims made by Pavitt. Let us trust that he does not seek to emulate Icarus and fly to close to the sun.

Tax does have to be taxing.

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To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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HMRC Halves IT Spend - Is Phil Pavitt a Mysteron?

Phil Pavitt (HMRC's Chief Information Officer and director of change) has told a public sector efficiency expo in London that HMRC has reduced its spending on IT from £1.4BN to £700M in two years.

That's quite an achievement for a man who, when he was at NTL, oversaw the "Harmony" project; which was designed to unify eight billing platforms and 28 CRM databases. Harmony was late and over budget.

Seemingly the cuts in HMRC have not come at the expense of quality of service.

Good!

Pavitt is quoted in the Guardian:

"This year it was just under £700m, and by the end of the spending review it will be just over £600. 

And yet the service quality has dramatically improved, not measured by me, but measured by the speaker after me [Amyas Morse, comptroller and auditor general at the National Audit Office]."

This being the same NAO that, in July 2011, said:

"There is clear evidence that HMRC is beginning to stabilise its administration of PAYE, following the disruption to processing which flowed from the introduction of its new computer system. 

However, stabilisation will not be fully complete until 2013, according to the Department, and it will need to deliver its plan to improve PAYE data quality if it is to realise the benefits of the new system and prepare for the move to real time information."

This also being the same NAO that in March 2012 stated that Caseflow and Spectrum have not delivered "any additional benefits", and warned HMRC that it will not meet its future forecasts to collect an additional £8.9BN by 2014/15, thanks to the failure of Caseflow and Spectrum.

Anyhoo, ignoring those "small points", Pavitt went on to state that HMRC had 31 platforms in place two years ago, but now only has one.

Quote:

"We identified one of those and said, 'Okay, we're going to migrate to that. Whatever that one is we're also going to modernise to the latest version,' which we perhaps hadn't always had in every part of our business.

The cost of the new platform is much cheaper than the running and the maintenance of the old platform. Freeing up and reinvesting that money means we'll replace every single application - two-thirds of our infrastructure - in the next four years for the outlay of less than £20m, when the original bill was closer to £200m. 

Not a pipe dream, but a commercial reality.

If you have call centres attracting a large number of calls, but their IT is not available for 120 to 150 minutes a week, that introduces a level of inefficiency. 

If you have call centres whose IT is a 100% month after month, inevitably you give the business a chance to improve their operation, which they have done, to meet the need of the customer.

IT transformation, which foreruns some of the bigger transformations at HMRC, was critical to get right."

So there you are folks, everything is fine!

I wonder if Pavitt is the Mysteron agent within HMRC, that I referred to the other day?

Tax does have to be taxing.

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To find out more, please use this link Taxwise



Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

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The Humongous Turning Circle

Changing some of HMRC's strategies, policies and long term contracts with suppliers seems at times equivalent to trying to divert the course of a supertanker which has a humongous turning circle.

Computer Weekly recently reported that HMRC has started to reassess its £8BN IT contract with Capgemini.

Will we see immediate changes?

No, unfortunately not, because the contract does not expire until 2017 (three years after this particular government ends its current term of office).

HMRC CIO Phil Pavitt has submitted a proposal to the departmental board for reforming its IT outsourcing contract. He told Computer Weekly that a renewed deal would conform with government ICT strategy, up to a point. However, it would not open the door to any more SMEs than were already subcontracted to work for HMRC by Capgemini.

"You can sense the mood of the current strategy. I can't tell you what will happen. It will be more in line with government strategy today than perhaps this contract that was let seven years ago.

If you are asking if SMEs will have a higher value of the contract. Then yes I can assure that will be the case. Will the volume of SMEs go up, probably not."


The above also implies that HMRC's current contract was negotiated and signed with a happy disregard for the then government policy of the day.

That being said it seems that, despite the government's stated desire to place 25% of public expenditure with SMEs, reality is proving to be a strict and unyielding mistress. The Cabinet's Chief Procurement Officer, John Collington, subtly shifted the targets by vainly boasting that the volume of contracts awarded to SMEs had gone up from 5% to 44% between January and September 2011.

Volume of course is not the same as value!

The fact is that the government does not know how much business it does indirectly with SMEs, because the large suppliers (who hold the head contract with departments such as HMRC) will not reveal the data and indeed don't even bother collecting it.

It seems to me that the large suppliers have HMRC and the government by the gonads here.

Or am I being far too harsh on the suppliers?

As to whether HMRC, and other government departments, are actually able to negotiate future contracts that do not put them at the mercy of the large suppliers, cost the taxpayer dear and leave SME's out in the cold remains to be seen.


Whatever the outcome, 2017 is a hell of a long way off, and not every supertanker turns in time to avoid collision or running aground!

Tax does have to be taxing.

UK EXPATS: Reduce tax on UK Pensions
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What is TAXWISE?

TAXWISE is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Taxwise

Tax Investigation for Dummies, by Nick Morgan, provides a good and easy to read guide for anyone caught up in an HMRC tax investigation. A must read for any Self Assessment taxpayer.

Click the link to read about: Tax Investigation for Dummies

HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"