Caring, sharing tax data… or #flogitHMRC
Sharing and publishing data for the public benefit sounds innocuous enough. "Sharing" is a nice word. "Public benefit" is a good phrase.
I confess I missed this consultation when it launched last summer, and I never went back to look into it when the responses were published in December. And in fact I never thought anything about it at all until I opened my newspaper on Friday morning (18 April 2014) and saw the headlines. "HMRC to sell taxpayers' financial data".
So I had a look. The consultation starts sensibly enough. At the moment, the legislation prevents HMRC from sharing information it holds about us except via legislative "gateways" which require the sharing to benefit the work of HMRC. The first proposal is simply that HRMC should be able to share its data when the sharing might benefit another government department – that the government should act as one entity working together for the public good rather than as a series of competing silos. There are complicated and nuanced issues about data security and the benefits of 'big data' which we might come back to later, but rather than make this piece 'tl:dr' let’s put a pin in them for the moment and say, so far so good.
Then there is a second proposal, that the VAT registration data which HMRC holds on VAT–registered businesses should be shared. Essentially this would be a database of all UK businesses with a turnover of more than the VAT threshold of £81,000 and smaller traders where they have voluntarily registered for VAT (usually because they have more outputs than inputs so there's a financial advantage). It would be a big database of business names, VAT registration numbers and trade classification numbers. You would know there was, say, a business called "Bond James Bond", that it was registered for VAT, and that its trade was 007 (which I imagine to be the classification for international spy, but I admit I haven't actually checked)
I'm still not clear what the benefits of this list of numbers would be, but it seems relatively unobjectionable. If you find yourself in business, I imagine it's rather unlikely you would want to keep it a secret? Even if James Bond decided to forego employment in her Majesty's Secret Service in favour of self-employment, presumably he'd still have to let M know he was available for freelance villain-foiling and world-saving?
Then I came to suggestion 3.
This is the really offensive one. It's the "controlled" release of the entire VAT dataset. Not just the VAT number and trade classification number this time, but the business address as well. I'm assuming this is the part that brought the consultation out of the policy-wonkery arena and into the "MP says it's borderline insane" category. In this proposal the word "controlled" means "monetised", or in other words flogging it off, selling our data to the credit reference agencies.
Because whose data is it, anyway? It belongs, surely, to the person who has been compelled to supply it to HMRC for tax purposes (and tax purposes only.) If HMRC then wants to aggregate it and publish it for the public good then I have no particular objection provided there are safeguards and opt outs. People fleeing abusive spouses, for example, should be able to run a business without being afraid of being tracked down via some other data point linked to their business name. But I find it beyond offensive that HMRC should even be considering selling it. If "information wants to be free" then let it be free. I thought that was what "open government" and the Freedom of Information Act were all about. If information can be published, then it should be published for the good of all the citizens who have created and contributed towards it. But certainly not sold to enhance the business model of commercial data crunchers, without benefit of an opt out or an "if you don't want us to share your data with other carefully selected firms tick here" box!
In fact if you read between the lines, HMRC is not only contemplating selling our data but actually envisaging buying it back for accounts screening purposes after it has been "enriched"! This is from the original consultation:
4.12: "Potential qualifying parties such as CRAs [credit referencing agencies] may be able to enrich or supplement VAT registration data from their own data sets. Enriched or supplemented data could be useful to HMRC in better understanding and segmenting its business customer base and in enhancing compliance risking and enforcement activity."
So what do we do?
Well, there is a petition doing the rounds (find it via the twitter hashtag "#flogitHMRC") but perhaps more useful would be to check here, on the gov.uk consultations website, and respond to the second wave of consultation when it is published later in the spring. There were, it appears, only 16 responses from individuals (including six academics) to the first consultation. A few hundred thousand concerned citizens writing in to the next phase might have the potential to change minds.
But you might also look at page two of the terms of reference of the Tax Transparency Sector Board which governs this kind of activity by HMRC. You will see that the membership is largely government bodies: HMRC, the Cabinet Office and the Information Commissioner's Office. "Academia" is represented by the Economic and Social Research Council grant-awarding quango (academics have a slender majority on their governing council) and "other representative bodies" include the Taxpayers Alliance and the Institute of Directors. There are two Credit Reference agencies, Experian and Equifax, on the Board, but no representatives of small businesses, trades unions or civil society in general.
Perhaps a useful way to express disquiet at the potential sale of what should be open data with strong safeguards and opt outs, might be to write to David Gauke and ask him to look at the composition of the Board overseeing these decisions? Because sharing data with proper safeguards can be useful or invaluable; selling data, however, is problematic. And the process should be driven by taxpayers rather than by the credit reference agencies, surely?
© Wendy Bradley, a former senior tax inspector, is a PhD student at Sheffield University, working on the relationship between tax simplification and better regulation. She is a member of the Women's Budget Group and also blogs at http://tiintax.com. Twitter: @wendybradley Ekklesia blog: http://www.ekklesia.co.uk/blogs/wendy-bradley
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