Bullshit Jobs - David Graeber nails it

From City AM:

Often I talk to people who are efficiency experts for banks who will say they think there’s as many as 80 per cent of the people who work in a given bank probably don’t need to be there.

I think it’s partly because the system we have actually isn’t really capitalism. I would go that far. Capitalism is a system where you are hiring people to make stuff to sell people, or you’re just selling stuff and therefore obviously you want to spend as little as possible and make the most profit.

But increasingly the profits of large corporations are coming from finance, so basically moving money around, creating debt, seeking rents of one kind or another. That’s a whole different thing that’s much more like feudalism where you’re extracting money then redistributing it.

More Bureaucratic Failure

One of my people is currently working through the pensions claims for a client of ours.  It's quite a lot of work as there quite a few plans, polices and investments and we are trying to get him a good deal and get it all nicely organised and set up, etc.

 

One of the plans is an old personal pension from a well known insurer with a guaranteed annuity rate (GAR).  The GAR is very good - 8% I think.  My colleague has 'advised' him to take this deal.

 

Now, if  we DO NOT 'advise' him and get him to declare that he has NOT received 'advice' on taking the GAR, the insurer pays us a commission of £1,500

 

On the other hand if we DO advise him and he DOES declare that he has received 'advice', then no commission will be paid, but the annuity rate will not be increased.  That is the insurer will trouser the £1,500.  (This commission cost is built into the contract at outset).

 

Yes, you read that right.  If we DO advise him we don't get the commission.  If we DON'T advise him we do get it.

 

This is the consequence of the rules set out in the Retail Distribution Review. (RDR).  You might not be surprised to learn that the RDR is viewed throughout the thinking part of my trade as a catastrophic failure. (See here).

 

Of course, the client is paying for all this failure. The incidence of regulatory imprests and deadweight costs falls on the client, not us. (FYI that cost varies between about 18% of revenue to 30% of revenue depending where your business sits in the financial services landscape).

 

(So what we will do here, what we are forced to do, is to game it.  The client will declare that he not received advice and we will take the commission.  And we'll offset it in full against our final invoice). 

 

Kafka would be proud.

A Dispatch from the Front Line

I have had a reasonable year and decided we should pay off the final balance of our flexible business loan early.  Not a problem you'd think?  Just transfer some funds between accounts.  BTW, this is HSBC.  Note also that HSBC have sacked all their local managers and we are 'looked after' by someone about 70 miles away.

 

Can we do this by on line banking?  Nope.  No facility.

 

OK.  Let's call telephone banking.  Nope.  Can't do that either as one of my access credentials has expired and it'll take 'a few days' (i.e. probably a couple of weeks) so sort that out.  The ooman bean who told me this said she'd email my 'issue' to our 'RM'.  A 'relationship manager' I suppose.

 

RM calls me back. Can I do this in the local branch?  Nope.  So I go off on one about their sacking of all their local RM's and then she make the big mistake of saying that HSBC are struggling with their profits!!!  Oops.  Bad move.  I issue a few choice words about ex nihilo money and QE and so on and it all goes a bit quiet.

 

'You'll have to write to me then and I'll get it done. You can do that by email'.

 

'Oh can I?  Really?  Is that wise as we have no secure email connection with you?'

 

Sigh.

 

Interesting

A good piece on 'Progressives'. Here

Personally I think (on the definitions in the piece) that the progressives are right.  We will end up with some sort of global universalism.  It's just that I don't think that trying to speed it up by coercion and' based on a model established by a small cabal, is at all acceptable.  And especially where it needs to be made and 'run' by a huge unaccountable specially privileged bureaucracy.

"It's bureaucracy gone mad"

I know a thing or two about bureaucracy, jobwise. There are parts of the government that function smoothly and are well thought through, some parts are Catch 22 madness.

One basic rule is that you send communications to the right person, be careful about hitting "reply all" and so on.

Seriousness or not of the underlying issues, when I read this I couldn't stop laughing for about ten minutes:

The head of the Met Police has said sorry to the families of three girls missing in Syria after they failed to receive a letter intended for them.

The families complained the letter - about a friend of the girls who went to Syria in 2014 - was given to the pupils instead of being sent directly to them.

A Thought on the Nature of Bureaucracy and Hope

The one thing bureaucrats never do is push for a reduction in their remit.  All 'failure' is attributed to them not doing 'enough' with not 'enough' money, or not 'enough' power and authority.  They never ever confess that maybe, just maybe, they need not be doing what they are trying to do in the first place.

To sustain this bureaucrats spend inordinate amounts of our wealth (and therefore our time) concocting huge 'analyses' leading to the production of long, and almost unreadable 'reports' that 'prove' their case for expansionism.  These are always couched in the terms like 'protecting the consumer' or 'making markets work better' (the last is self evidently absurd).   They call all this their 'work', but as nothing they do is in anyway connected with the actual process of wealth creation, it is anything but 'work'. At best it is just an activity, like doing jigsaws. At worst it is wealth destruction.

To rebut these self serving nonsenses takes equivalent effort, cash and time. In effect the poor bloody citizen is paying thrice. Once he pays the bureaucrats.  Then he spends his own time (and money) constructing a rebuttal.  And then he has to spend another equivalent gobbet of time making up for the time and money expended on the previous two gobbets.

Individuals stand absolutely no chance of mastering all of the arguments to rebut these bureaucratic dictates.  This encourages bureaucrats to carry on, as they know that they can bog us down in trench warfare.  We end up having to fight them on ground of their choosing.

Until now.

Yesterday I cross-posted on here a post from a Telegraph blog which was a response to something I had written.  I was pretty sure it was mostly cobblers (in the H2G2 sense - that it 'was something almost, but not entirely, quite unlike tea logic').  I couldn't quickly work out how it was wrong, so I cross posted it to here, where it garnered about 25 responses (excluding mine) which quickly revealed the flaws in the arguments.  I sort of crowd sourced the rebuttal.  This took little effort and almost no time at all.  My rebuttal was complete, and time and cost efficient.  It forced the poster to move to the defensive. I had moved the argument to ground of my choosing.  We had left trench warfare and moved out into the open to a battle of manoeuvre.  The attacker had become the defender.

This is very encouraging indeed as I am very concerned that the UK and the West in general is moving towards a grim Randian future that bodes ill for liberty.  But maybe, just maybe, the interweb is redressing the balance.  After all information is power, and if we can all access it, the monopoly of the bureaucrats is broken.

No wonder 'they' want to censor and control it.

UKIP, landowners and windmills: You can't beat a nice paper trail

Well done, Autonomous Mind.

I do not know how he got hold of some of these documents, but this is the sort of bureaucratic digging I have to do at work.

Comments here disabled, join the convo at his.

Car Insurance Premiums

From the BBC

The Commission has been studying the £11bn private motor insurance market for more than a year, following a referral from the Office of Fair Trading (OFT).

It agreed with the OFT that the system was not working well for motorists.

It found that premiums were pushed up because the insurer of a driver who was not at fault in an accident arranges for a replacement car or repair, but the at-fault driver's insurer foots the bill.

"This separation of control and liability creates a chain of interactions which result in higher costs for replacement cars and for repairs being passed on to at-fault insurers," it said.

"The Commission estimates the extra premium costs to be between £150m and £200m a year.

"There is insufficient incentive for insurers to keep costs down even though they are themselves on the receiving end of the problem."

Uh, what? The people picking up the tab have no incentive to reduce the cost? Really? Shareholders and managers of insurance companies would rather throw money at someone than have a bigger house? OK, you might say, the insurers will ultimately pass that onto their customers, but then, we have companies competing with each other to win customers. If they want their customers they have to be competitive with premiums, and that means making sure that their competitors don't take the piss.

The Commission believes that premiums could be reduced by £6 to £8 per policy if changes were made to the claims process.

So what we're dealing with here is the sort of amounts on a claim that no-one can be bothered wasting staff time and costs actually arguing about.

Insurers (in my experience) are pretty good at knowing the approximate cost of things. They often even insist on dealing with certain suppliers, e.g. one of the big hire car companies. And some of this includes setting the price at the higher end so that people aren't wasting their time arguing about the cost. So, maybe you get a car that costs £10/day more than it should, because it isn't worth people arguing the toss over a claim amount less than £50. And if you try to push the prices down, you'll just create more people arguing over cost which will frequently cost you as much as that.

If anyone really wanted to lower insurance costs, they'd be trying to get the government to drop their 6% insurance premium tax on car insurance.

The Cost of Bureaucracy

There was an interesting comment by DBC Reed about bureaucracy and competition in an earlier post, that has triggered a memory of post that I intended to write:-

I know I have rehearsed King Gillette's argument that competition increases bureaucracy before and you have acknowledged the validity of some of it,but there are newer contributors on here who appear to be enemies of the Post War British state founded on a mixed economy so some continued resistance is in order.

I'm not disagreeing with DBC Reed here, but I've long wondered how much the cost of bureaucracy affected things like competition.

Let's imagine you're working as a GP in the 1930s. You've got a patient with an ingrowing toenail. How efficient would it be to have competing hospitals providing ingrowing toenail surgery? That GP would have to send each hospital a letter, written by hand, posted, wait for a response of a few days. Someone at that hospital would have to check the appointment book, see when they could fit someone in for an ingrowing toenail operation, write back and once the GP got all the quotes a few days later, he would then write to the particular hospital and book them in. The GP then has to send a letter to the patient.

That's not only slow, it also has lots of cost in people's time writing things to and fro.

Here's how you can do it today: A GP taps a request into a comparison system. It sends a message across the internet to the servers of each hospital, that check an online appointment book, find available slots, and report back a price and availability time in about 5 seconds. The GP then selects it, at which point the system books the slot at the hospital and sends an email to the patient.

The model for today costs a lot to set up, but once set up, the transaction costs are minuscule.

What I'm wondering is whether in the past, we suited more of a state-run model, with large, centralised organisations, because while competition would have lowered prices, the cost of the bureaucracy to run it would have been so huge as to wipe out the gains, but having dramatically lowered the cost of bureaucracy, we now suit more of a fragmented model.

Healthcare Assistants

From The BBC:

There is no minimum standard of training for healthcare assistants before they can work unsupervised, an independent report has found.(1)

Some were doing tasks usually performed by doctors or nurses, such as taking blood.(2) The Cavendish Review was set up by the government to study the role of healthcare assistants (HCAs) in England after the Stafford Hospital scandal.

HCAs provide basic care in hospitals, care homes and at home. They should go through a universal training system and gain accreditation before they can work unsupervised, the report said.(3) Currently, there is no consistent qualification or training for HCAs, with employers deciding for themselves what training is needed.(4)...

There are more than 1.3 million frontline staff who are not registered nurses, according to the Cavendish Review. They provide some of the most personal and fundamental care such as turning people in bed so they do not get pressure sores, helping people to eat and wash and to get out of bed and get dressed. But the review says the quality of training and support that care workers receive in the NHS and social care system varies between organisations and, in some cases, is lacking.(4)

It calls for a new Certificate of Fundamental Care for fully-fledged HCAs - a qualification that would link HCA training to nurse training, making it easier for staff to progress up the career ladder should they wish to. All new recruits would need to obtain the certificate and existing HCAs would need to prove they had the equivalent training.(5) And in recognition of the important job HCAs do, they should be called Nursing Assistants.(6)

Journalist Camilla Cavendish, author of the review, said: "Patient safety in the NHS and social care depends on recognising the contribution of support workers, valuing and training them as part of a team. For people to get the best care, there must be less complexity and duplication and a greater focus on ensuring that support staff are treated with the seriousness they deserve - for some of them are the most caring of all."(7)

Peter Carter, of the Royal College of Nursing, was concerned that without mandatory regulation there would be a danger that any staff who were found to be unsuitable could move from one employer to another unchecked. "The priority must now be to underpin the recommendations made by Camilla Cavendish in the regulatory structure which governs care," he said.(8)

Christina McAnea, of Unison, said that in some hospitals HCA's have been treated as "cheap labour".(9) "Common training standards across health and social care are long overdue and welcome."(10)

1. They're assistants. The whole point of an assistant is that they are people working for someone else, rather than people with responsibilities. You tell them to do something, they do it. But if they screw up, you, the person in charge of them take it in the can.

2. Yes, because they're assistants to doctors and nurses. Who can show them to do something, and have to take responsibility for their work. And actually, taking blood isn't brain surgery.

3. Great, so instead of hiring someone with a reasonably active brain and getting them to work by a nurse or doctor showing them the ropes in some basic care, we're now going to have an accreditation scheme, driving up costs.

4. How much training does someone need in turning a patient or feeding them? Millions of parents seem to be able to manage this.

5. Right, so that means not only spending money training new recruits, but also certifying existing recruits. What's that going to cost?

6. Someone now has to go through every piece of documentation and change it. No more healthcare gets done, no more pay to nurses, just some more bureaucracy.

7. None of this means that these people will be more valued. If a doctor looks down on someone who turns the patients, they're still going to look down on the accredited people who turn the patients.

8. Well, yes. Once you get people with accreditation, they'll need a union to try to raise the salary of them.

9. Which is exactly what they are, and they only exist because we made nurses more expensive by turning it into a degree-level job, resulting in the workaround of creating HCAs. If we make the HCAs more expensive, we're going to have to create a new job like Nursing Dogsbody.

10. No, they aren't. Not for assistants doing feeding and turning patients. You want flexible people who can do what nurses and doctors tell them to.

Seven Days

(Just for a giggle, the numbers in the excerpt are hyperlinks to take you straight to the relevant footnote, like wot Wiki does.)

From the BBC:

Jobseekers will to have wait seven days before first claiming Jobseeker's Allowance (1) and may have to sign on every week, under new government plans(2)

Chancellor George Osborne also said those claiming unemployment benefits who did not speak English would have to attend English classes (3).

Jobseekers will also be required to have a CV before claiming benefits.(4)

1) The "seven day wait" is supposed to encourage people who have just lost their jobs to focus on finding a new job before they go and claim benefits instead, which has some superficial appeal until you think about it for a few seconds...

a) How easy or hard it is for somebody to find another job if they are made redundant, their contract comes to an end etc depends entirely on that person. There are some who will be back in work within a couple of days; there are some who will never have paid work again; and everything in between.

b) We can safely assume that those people who know they will have a new job in a few days will indeed focus on getting a new job, so to the extent that they even bother applying for dole money, we might as well make the process as quick and simple as possible, i.e. you turn up with your P45 and give your bank details to waste as little of their time as possible while they do their job applications. For those who will never work again, one week is not going to make any difference to the public finances, but it paying them dole from Day One will soften the blow ever so slightly.

c) It is the marginal cases which we have to worry about, the low-paid, low-skilled, temporary and part-time workers who hover between employment and unemployment. It is clearly better for them to be in work that out of it, so [easing] the transition from dole to paid work and [easing] the transition from paid work to dole are equally important.

d) So let's look at such a marginal person who is on the dole and is offered a three weeks' work on the minimum wage. That's £650 gross (let's ignore Working Tax Credits and PAYE), from which they deduct travel and other costs (call it £5/day) and three-plus-one weeks' dole money = £284, net gain £291, an effective hourly wage of £2.77. If they only stand to lose three weeks' dole money, the net gain is £362, a net hourly wage of £3.45 - so it's not hugely more, but might be enough to tip the decision towards taking the job in enough cases to produce an overall gain.

2) I was at the launch of Malcolm Torry's new book about Citizen's Income yesterday called Money for Everybody (hi to Katie, Dave and Geoff).

a) He gave a quick overview of how the UK's welfare system had developed over the years, and one key point is that of all the bright ideas politicians have come up with over the years, some good some bad, the ones that were adopted (good or bad, mainly bad) were always ones which increased the amount of bureaucracy and the number of civil servants.

(He gave the example of the Pensions Credit, which is savagely reduced if a pensioner has any savings (which in turn are subsidised by being in a tax exempt ISA and subject to a hidden wealth tax called negative interest rates) but then to soften this, there is a parallel Savings Credit to partially reinstate the Guarantee Credit which people lose if they have savings. Absolute madness.)

The bright ideas that were rejected, however good, were the ones which would have reduced bureaucracy and the required number of civil servants.

Ask yourself: does making welfare claimants waste an hour every week instead of every two weeks more likely to get a job? Not really. Does it require a larger number of civil servants? Yes. There's your answer to that.

b) One question put to him was how he saw the transition happening.

I suggested an answer myself; it is simply no big deal. Anybody on the dole (call it IS, PIP, JSA, ESA, whatever) just continues to receive their £71 a week but at the next signing on date, is simply given a PAYE code BR (i.e. no personal allowance) and told to get on with it. If they find work, there is no need to report anything to anybody ever again and they continue to receive their £71 a week - but they have income tax deducted from their whole wage (and NIC from most of it), so they more in tax than everybody else and in the weeks where they earn much more than £200, the tax and NIC withheld is more than £71 and they have effectively paid for their own dole.

There's no need to change anything else at all. Because of the maths, there'd be little incentive for them to claim Working Tax Credits if they work more than 16 or 30 hours etc. So WTC could remain on the statute books for ever, but nobody would ever claim it. Everybody who loses his job or leaves school without immediately starting work could get the same - £71 a week and a BR tax code. It might well be that these people end up a few quid a week better off than people who have been in work throughout, but that can easily be fixed by increasing the personal allowance for income tax and NIC accordingly.

3) This is a splendid idea. I wonder why nobody else had it first. Even better, make people pay a few pounds towards each class (by deducting it from their dole) and make them continue paying until their English is good enough.

4) What's the point of that? The people likely to find work again anyway will either already have a CV or be looking for the type of job where you don't need very much. And a CV is of absolutely no help to the no-hopers.

There's no harm in the people at the Job Centre helping people put a CV together if people ask for help - it certainly helps employers if every CV follows a standard format, which changes over time. I haven't updated my CV for fourteen years and I have no idea what they are supposed to look like nowadays.

But apart from that, making CVs compulsory is just yet another job creation scheme for the civil servants who have to check them, isn't it?

Kinky Bureaucrats Joke

They're all really into S&M and bondage, aren't they?

They love tying each other up in red tape.

Picture from here.

"Have you ever worked in an office before?"

Her Indoors had steeled herself to have a proper talk with the lass who is doing maternity cover and wasn't doing a very good job at all. I asked her how it went and she told me that her opening question was "Have you ever worked in an office before?" at which stage I started giggling.

"That's like a line from a film," I said, "I can just see it. Man blags self job as bus driver, tears off roof of bus under low bridge, angry boss asks him 'Have you ever driven a bus before?' Man blags job in demolition and blows up the wrong building, angry boss asks 'Have you ever used explosives before?' and so on. The simple fact that the boss asks the question indicates that the person hasn't. Whatever the context, it's funny!"

Her Indoors (who found the whole experience rather stressful) did not think that it was funny at all. Anyway, I regaled The Lad with the tale a couple of days later and he fell about laughing: "Dad, it IS a line from a film! Right at the start of Nativity! after the new teaching assistant unleashes complete chaos, the serious character sits him down and asks him 'Let me ask you something. You haven't done this before, have you?'"

A couple of notable absences, methinks...

Via Bob E from the BBC:

Viewpoints: The civil service and reform

Nick Herbert, former minister of policing and criminal justice: "Whitehall Wars" makes for a good headline but a bad debate. I believe that the time has come to look again at our system of administration and consider the case for more radical reform...

Lord Bichard, former permanent secretary: Sadly the current debate about the civil service largely misses the point by focussing almost solely on the relationship between politicians and officials and whether it is at an all time low.

Dave Penman, general secretary of the FDA union: The civil service, like any large organisation public or private, is constantly reforming and adapting to respond to new challenges. The current government has tasked the civil service with delivering a radical reform agenda with significantly fewer resources. Already at its smallest size since the Second World War, the civil service is still only just over halfway through the job reduction programme planned to 2015, with further cuts to come beyond this date.

Peter Riddell, director of the Institute for Government: At the Institute for Government we have identified serious inadequacies in Whitehall that need to be addressed by both ministers and the civil service.

Alan Downey, head of government and public sector at KPMG: There are some specific reasons for the latest breakdown: for example, it is clear that a 30% reduction in the number of senior civil servants has cut deep into Whitehall's capacity, capability and morale. Yet, the problems underlying the recent outbreak of verbal hostilities have been brewing for many years. The last government's relationship with Whitehall followed a similar pattern: after a honeymoon period ministers began to complain about obstructive behaviour and the difficulty of getting their policy intentions translated into practice.

Yup, the BBC didn't ask Timmy Taxpayer or Joan Public what they think of all this, and none of the quangocrats interviewed even mentions them.

"The Local Support Service Framework"

Emailed in by Bob E:

Ministerial Foreword

Universal Credit will make work pay – so that people are better off in work than claiming benefits. It will improve and modernise the benefit system and bring the experience of claiming and receiving benefit into line with the world of work.

And as Annex B illustrates, it really is going to be "so simple" ...

In making a claim to UC, the claimant will experience a series of key steps:
• Learn about UC;
• Create a UC account;
• Provide details for the claim;
• See likely payment amount;
• Submit claim;
• Prepare for an interview;
• Attend an initial interview;
• Prove ID
• Sign a Claimant Commitment; and
• Receive award notification and payment.

and once you have "got it":

In maintaining a claim to UC, a claimant will need to:
• Budget monthly and pay rent;
• Demonstrate “actively seeking work” (where appropriate);
• Take up work;
• Seek to increase their earnings from work; and
• Update their details.

and nor is the role that LSS's are expected to play "that big" either, and better yet, that is expressed in a totally "jargon and wonk speak free" way:

Local support services have to be focussed on delivering appropriate outcomes for claimants, communities and wider society. Although individuals will present specific challenges, and so require a tailored pathway to bring them closer to the labour market, the broad criteria for success are:
• Constructing a service that claimants, agents and intermediaries view as easy to use, easy to understand and easy to access - giving them confidence in the system;
• Helping individuals, especially those who need extra support, to make and manage a claim to UC;
• Providing a joined up and holistic support service to claimants ensuring minimum hand-offs between different agencies;
• Substantially improving work incentives and the recognition that work pays; and
• Increasing the number of people in employment when compared to the equivalent point of the previous economic cycle.

The ultimate aim of those providing services under the framework will be the creation of a “single claimant journey” from dependency to self sufficiency and work readiness, as far as is possible, behind which all service providers should be aligned. To this end DWP and delivery partners will identify specific outcomes required by individual claimants to help move them closer to the labour market and financial independence.

Can't fail, can it ?

And a f-ing lot of good the investigation will be

Bob E summarises the likely conclusions of the investigation, full article at the BBC:

A lot of people collectively failed to do their jobs. Someone died as a result. That is unfortunate. No one person is to blame. This was not "corporate manslaughter". No one can be punished for this unfortunate and tragic accident, as it is no one person's fault. Measures are now in place to ensure it never happens again. Until it does. We will then dust off this report, change the dates and a few of the names, and go public with it and how horrified we are. Again.

Free School Woes

Ladies and Gentlemen,

Forgive me for promoting another blog.

I have a client who is trying to set up a free special school in Suffolk. Needless to say, it's a bureaucratic nightmare.

I am sure that she would welcome any support.

Lola

THE COALITION AND ITS SUPPORT FOR THE PRIVATE SECTOR

I am not Mark Wadsworth

One of the unheralded successes of the British financial services sector is company incorporation. For around £30 online you can have a fully functional private limited company incorporated and ready to trade in 24 hours. Compare this with our "partners" in the EU. In Spain, for instance, the cost of an equivalent company to the punter is about 100 (yes one hundred) times that. Moreover, there's endless delay together with a Grand National's worth of bureaucratic hurdles to jump over.

Unfortunately, the coalition is unhappy to see this tiny piece of excellence and efficiency continue. The Registrar of Companies proposes, on the basis of what appears to be the wilful misreading of two EU directives - 2003/58 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:221:0013:0016:EN:PDF and 2006/123 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:376:0036:0068:en:PDF , to set up in competition. The new service, to be called the "Citizens Incorporation Service", will be provided in concert with another taxpayer funded organisation (Business Links) and in competition with the existing (private) providers. The cost of incorporation through the new service will be £18.

On a reading of the Directives it's clear that 1. they were not issued to give Companies House and another taxpayer-funded entity an effective monopoly on company incorporation in the UK and 2. the existing Companies House regime already complies with the directives. I write "effective monopoly" because the £18 proposed fee is equivalent to the cost price of the service to company formation agents. This basic cost to the CFA does not include any return on the extensive software investment necessary to the CFA to effect an incorporation.

Worse, the basic cost doesn't include the cost to CFAs of applying, at considerable expense, the money laundering and "know your client" regulations. These regulations, by the way, will not apparently apply to incorporations through the Citizens Incorporation Service. I know those regulations are a farce (the equivalent of the "security theatre" mounted daily at airports world-wide) but, even so, you would expect the producers of the farce to ensure that their own bureaucrats at least went through the motions.

I should add that a similar proposed scheme was turned down by the previous (Labour) government partly because of the significant damage it would do to existing CFAs. This doesn't seem to worry the Minister for Business - Mark Prisk (a "Conservative") - or his boss Vince Cable.

On a personal note I should add that part of my services to clients includes arranging incorporations. I use a very efficient and reasonably priced CFA who I intend to keep using.

Umbongo

The Unpaid Tax Collector

Mark has made many posts on the evils of VAT and its attractions for HMRC, but there is one particular evil that HMRC must love: it makes all VAT-rated businesses into unpaid tax collectors. The genius of the system is, for the taxman is that assessing the VAT the business has to pay is easy to check, just tot up all the VAT they've charged their customers.

However, the difficult bit, and the bit where HMRC have no incentive to lift a finger to help you, is assessing the VAT that you can claim back, which involves a huge amount of time sorting and entering purchase invoices, which tend to be far more numerous than sales invoices. This is a huge hidden expense, especially to small businesses just above the tax threshold.

If you are unlucky enough to try and make a living in the construction industry, HMRC has a special hell for you, called CIS. Based on the well-known fact that all builders are crooks, the CIS scheme forces building contractors not only to collect and hand over the income tax of their employees, but also of their subcontractors. Nor do they make this easy. Each subcontractor has to be "verified" using the sort of user-hostile computer system that everyone who deals with civil service IT knows about and dreads.
----------------------
MW adds:

It's worse than that. There are plenty of sub-contractors who aren't registered for gross payment (subtext: HM Revenue & Customs doesn't trust them to declare their income and pay over the income tax) but who are VAT-registered. If such a sub-contractor does £1,000's worth of work and puts in an invoice for £1,000 net plus £175 VAT, the main contractor deducts 20% quasi-income tax from the £1,000 but still adds on the VAT and pays him £975 cash.

This process will become even sillier next year when the standard rate of VAT increases to 20% as mandated by the EU, when such a sub-contractor will render an invoice for net £1,000 and receive £1,000 cash, but main contractor has the hassle of deducting £200 quasi-income tax and paying that over to HMRC using one set of forms; and the hassle of reclaiming the £200 VAT via its own VAT returns (unless the main contractor is exempt); and the sub-contractor has the hassle of keeping all the vouchers showing the £200 quasi-income tax withheld to offset against his own income tax or PAYE liabilities; and the hassle of completing VAT-returns and paying over the £200's worth of VAT.

Even ignoring the hassle involved (and spiteful penalties for non-compliance, late payment etc), if HM Revenue & Customs don't trust sub-contractors to pay over their income tax (they may well have a point), what makes them think that they will pay over their VAT?

"Ee, it's not like when I were a lad..."*

The Metro celebrates a fisherman who has been in the business for seventy years:

"When I first started, it was very different. In those days, all you had to do to be a fisherman was get your register signed once a year. Now, you’ve got forms to fill in morning, noon and night."

* Obviously, he has a Cornish accent, not a Yorkshire accent, but it's difficult to imagine The Sketch with anything other than a Yorshire accent.