Conspiracy or Cock-Up Theory ?

As I've mentioned on here before we produce a budget booklet for our clients, the process starts the minute the Chancellor sits down and the details of his speech and the various tax changes are released on the HM Treasury website. As an aside, it's worth noting that this year the availability of the information for the public and newspaper editors etc was actually out of step with the protocol that has been previously established, that being that the release had to take place after the opposition had replied in the House of Commons.

Anyway during the Chancellor's speech one of the few moments that received any sort of reaction in the House of Commons, from any of those present, was the announcement that first time buyers would be able to claim relief from Stamp Duty Land Tax on residential transactions up to £250,000 between yesterday and 25th March 2012. What nobody had clearly thought about was the definition of 'first time buyer.' This was the first topic of conversation in our office the minute we began to put our report together.

I suspect that most people are not aware of the fact that the Land Registry no longer keeps records of who owned a particular property prior to its current incumbent, so there's no paper trail there - this is a real bugger for future family historians by the way. A couple who get divorced can both claim to be first time buyers in their own right, equally two people who have lived separately and then co-habit or get married can also be classed as first time buyers.

It's a classic case of release the good new and think it through later which seems to be a particular favourite of this administration. The press was equally dopey about picking up on this and it's only this morning that the subject has been discussed on the Today programme. Apparently a spokesman for the Government has said that it will be possible to identify first time buyers by using council tax records, but how? You can be paying council tax and not a property owner equally you could be a property owner and not paying council tax, so it's a cock-up then! Of course human nature being what it is when a solicitor asks his or her clients the question, "Are you now or have you ever been a first time buyer?" The client will respond yes and no.

The second piece of legislation that looks as if it has been conceived on the back of a label of Krug rather than thought through using joined up thinking are the soon to be heading your way: Penalties for Late Payment of PAYE. These are a classic case of a Sir Humphrey somewhere in the bowels of the treasury having a laugh. Without going into too much detail Her Majesty's Government, in the shape of HMRC, have finally realised that not all employers pay over their PAYE on time. This isn't exactly news. Any accountant or financial advisor worth their fee income has been telling clients for years that as long as your debt for any given tax year is settled by the 19th April following the end of the tax year you don't have any problems. It's the old Mike Baldwin (of Coronation Street) theory of 'pay little and often to keep them sweet,' and it has worked fine for years.

Of course as with all taxes and tax collection systems it has been open to abuse hence the new legislation. The new rules come into effect for tax years 2010-11 onwards, no problem with that, the problem is that it is almost entirely unenforceable because of the woolly nature of the legislation. Reading through the 42 questions on HMRC's FAQ site the whole thing can be summed up in two words that have come to sum up so much of our life over the past decade or so: Risk Assessment. The current Government are following the same line that previous Governments took, including those from the blue corner, it's the one that states 'you can be any height you like as long as it's five foot eleven.'

There was a rumour back in January that the Civil Service were already preparing for a Conservative administration and were being as unhelpful as they could. It would be nice to think that these two examples of bad policy making was down to Sir Humphrey and his chaps, I have a horrible feeling though that it's the work of a Government that is out on it's knees and is looking for somebody to throw the towel in.