This week I needed to speak with someone at HMRC about a pretty straightforward business tax issue – or so I thought. Hours passed on the phone. I was transferred more than Trevor Benjamin. It all ended with a kindly voice apologising for their error but ultimately telling me they couldn’t help. It was Kafkaesque in as much as the processes and decisions were utterly inscrutable. But it would be unfair to describe it as impersonal. On the other end of the line were people doing their best.
This wasn’t a ‘people problem’. It was a ‘process problem’. My query couldn’t have been unique – yet, every year, thousands of business owners are forced to tie themselves in knots trying to navigate the system.
The UK isn’t alone in this. I’ve never lived in the US, but by all accounts their tax code is labyrinthine and bureaucracy can be a nightmare. But there are definitely countries where it’s much easier to deal with the state. Before it was paused, the World Bank’s Ease of Doing Business Index tried to rank countries on all sorts of metrics, including ‘paying taxes’; but it took too big a picture to uncover best practice.
Desk research only gets us so far. Get in touch if you have experienced or know of other jurisdictions that do this better.
Ultimately, AI has the potential to solve many of these problems, but in the meantime, here are three things that could be done easily to improve HMRC.
First and foremost, everytime I call HMRC they are “higher-than-normal call volumes.” They are clearly chronically understaffed and need more people. It goes without saying that this would pay for itself in saving countless hours of time for business owners.
Second, when being transferred, you shouldn’t ever be sent back to the voice-assisted main menu to start the whole process again. While it’s reasonable to have to be put on hold to whichever department you’ve been transferred to – after all, we don’t want people using shortcuts to skip the queue – it’s mad and maddening to make people start the whole process from scratch.
Third, and this would make the second solution redundant, there should be the option to simply have someone from HMRC call you back so you don’t have to wait on the line. This could be done automatically at intervals throughout the day, so that if you miss one call you don’t have to call again.
When complaining about all this to a tax adviser, they describe HMRC as a “lost cause.” I’m not quite so pessimistic. It’s not beyond the wit of government to fix this.
As Y Combinator’s Paul Graham said about the UK in a recent podcast with Tyler Cowen: “I am optimistic because they still have a gear that they haven’t shifted into...They’re not lazy, and they’re not stupid, and that’s the most important thing. Eventually, non-lazy, non-stupid people will prevail.”
Cowen thinks the UK is undercapitalised: “You keep on borrowing against the future. You don’t plough resources back in, and then at some point you don’t have anymore.” He mentioned the water utilities and the NHS, but you could tell the same story about our bureaucracies.
Graham has the last (optimistic) word: “Actually, when things get bad enough, they fix things. This place is not run by the kind of yahoos that America is. It may be a small country, but people running things – they’re not just boneheaded political appointees. When things are wrong, they notice they’re wrong, and they fix them. This is a very old country. That’s another reason it’s not going to tank. They’ve been through some bad stuff before. There have been ups and downs.”
Nation of Immigrants
We’ll soon be releasing two papers on visas and immigration. As part of this we’ll be looking for endorsements from entrepreneurs and experts. If you’re supportive of our campaigning on this topic, we think you’ll like our new papers. Let us know that you would like to receive an early copy of the reports with a view to writing an endorsement.
Along similar lines, we’re planning to undertake a roundtable on “pinch points” for foreign-born founders. This is more than just the visa system. For example, one common issue I’ve heard over the years is the difficulty in setting up a business bank account, but there are no doubt many more. If you have any views on what we should discuss, let me know.
Animal Spirits
Our Research supremo Eamonn Ives spoke at a Civic Future event on the impact animal agriculture is having on our environment, health system, and national resilience. Before joining us, Eamonn was a Special Adviser to the COP26 President, so he knows a thing or two about this. We’ve published his opening words and will share the video from the event shortly.
“I believe the answer lies in the innovative zeal of our country’s entrepreneurs and startups. In the last few years, we’ve seen an explosion in the number of companies trying to produce alternatives to meat and dairy.
I’m not just talking about plant-based alternatives such as Quorn – good as they may be. Here I’m thinking more of exciting startups like Ivy Farm, who cultivate lab-grown meat to make authentic pork sausages without the pig; or Better Dairy, who use precision fermentation techniques to make real milk without the cow.
Many of these firms are still in their developmental stages – often held back by completely irrational regulations… But they will be critical to fixing what I see as the biggest problem with our current food system, and as such we should be focusing relentlessly on doing what we can to help them succeed.”
On Nutshells
While 496-page tomes are sometimes needed to properly interrogate a complex policy issue, we also know that brevity can be a blessing. That’s why we produce shorter briefing papers, and why we’re going to start doing even shorter ‘Explainers’.
Explainers will succinctly engage with policymakers on key entrepreneurial issues. Rooted in our mission to make Britain the best place in the world to start and grow a business, these papers will be crafted to bridge the knowledge gaps between entrepreneurs, experts and policymakers.
As with all our reports, some will be in partnership with sponsors while others we will do off our own bat. If you have succinct policy ideas that you think we should pursue, get in touch.