Dear HM Revenue and Customs,

I am looking for information relating to the number of people likely to be affected by the provisions of the Finance Act 2017 relating to the 2019 Loan Charge. HMRC should have easy access to this information after creating the policy.

Can you please provide me high-level figures on:

1. The total number of people expected to be caught by the Loan Charge according to HMRC's records? They appear to suggest it is 40,000 or 50,000. I am assuming that an accurate number should be accessible to HMRC through tax return records submitted from 1999-2017 that had identified a registered scheme.

2. The number of people (actual or estimated, but please indicate which) the Loan Charge will affect who currently reside outside of the UK - broken down by key countries/areas. At a minimum, please include the collective EU (excluding the UK), Canada, Australia, New Zealand and South Africa.

3. The actual number of people that HMRC has contacted, or attempted to contact, in regards to the Loan Charge via individual email or letter.

I am only looking for a view of how many people are likely to be affected by the legislation, and whether they have been appropriately informed - in particular those non-residents who have no reason to follow UK legislation.

Yours faithfully,

Mr William Furlots

Dear HM Revenue and Customs,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of HM Revenue and Customs's handling of my FOI request 'Quantifying the number of people (in total and non-resident) Impacted by the 2019 Loan Charge'.

I have worked in and for the public sector for over a decade, have had previous experience in meeting information requests, and now run a team that provides economic and policy advice for government agencies. I have noticed an alarming trend where HMRC appears to refuse almost every request for information, not only for me but for most other publicly available FOI requests. I have concerns that HMRC are intentionally avoiding providing appropriate disclosure in order to either reduce public transparency and accountability over its activities, or to hide a lack of capability/competency within the organisation and protect your senior stakeholders from reputational damage.

My fundamental issue with this rejection is that my request should not have been a difficult one for HMRC to have provided some information for, or had at least attempted to meet this request in some way. The reasoning underpinning my complaint is outlined below:

1. I fail to understand how HMRC does not have a view on this information as part of its management of the disguised remuneration process. At its simplest, any economic impact analysis underpinning the implementation of this policy should have highlighted the relative split of those targeted by the changes in legislation. While that would not have included those contacted to date, it would have been a reasonable starting point for at least one element of my request.

2. HMRC currently have a team specifically designated to manage this process, and to do this effectively it would need to have an understanding of the data I have requested. At the bare minimum, for HMRC to be undertaking this process with an adequate level of competency, it should have metrics/measures to track progress that include information on total number of targeted people, where they are located (which will impact on collectability and potential process costs to collect), and whether they are aware of the legislation (which will impact on the response rate from targeted people). Is your response suggesting that this is the case?

How is HMRC making statements highlighting that it has informed people and that people have had three years to resolve this issue (a misleading statement in itself due to the need only arising with the recent change in legislation) if it cannot provide a view on its progress in undertaking this activity.

3. Assuming that the above two points don’t apply, the effort required to undertake the analysis underpinning my request should surely have greater internal benefits for HMRC because it is basic good hygiene for managing the process. While I appreciate that there may be a cost in terms of time/effort, HMRC would get the greatest benefit/reward from doing so. Therefore any perceived cost should be recognised as not only a benefit for me, but also for HMRC and the relative cost considered accordingly.

4. In the event that you have not undertaken adequate performance management of this process, and the only way you can create a view of the information that I have discussed is through a manual process as you have highlighted, I believe that you have grossly overstated the level of effort required to complete my request. This is a relatively simple of data manipulation activity that any one of my junior analysts would be able to do in less than three and a half days. I have outlined the most likely (simplified) approach below, and this would take no more than two days for an adequately competent analyst, with additional time for review/confirmation:

a) Identify and collect the raw data sets need to complete the task. I am yet to find a system with a database that is unable to perform this task with a little bit of effort. This is usually the most difficult part, but you have informed me that HMRC has this information available so it has an effective starting point.

b) Identify the unique identifiers for taxpayers across the datasets – in this case it is probably the UTR. This will be used to link the different data sets together.

c) Identify the relevant data fields required to undertake this analysis. Will include current addresses, and some tax return info - likely to be tied to tax returns by using something like the P11D form, or anything that has a registered scheme referenced perhaps.

d) Undertake some data manipulation, probably to separate the location of the taxpayer. Personally, I’d just do this off the postcode or the most recent tax return date, but there are a number of other alternative ways that may work.

e) Create flags against core data as required. This is a binary approach where using data you create what are effectively yes/no flags to mark the valid data fields as being either in or out of the required scope.

f) Do a count of the flags, by location.

In summary, I feel that your justification for refusing my request is insufficient. Either HMRC do not have this information to hand, which suggests that it doesn’t have a view on how well it has informed people, or it doesn’t have the basic competencies required to perform this task. If either of these is the case, I fail to understand how HMRC can be confident that targeted individuals have been notified and make statements to that effect.

It would be embarrassing if it turns out that you’ve had a CEO and a Minister explaining how fair HMRCs treatment has been of its targets when in fact HMRC have no view on who it is targeting, have not attempted to contact those people, and then state if they don’t comply with taxation relating to events 20 years ago it is these taxpayers fault.

Other points

I’d like to raise a number of other points in relation to your response:

1. Firstly, I appreciate that HMRC published settlement terms on 7 November 2017. My FOI request is related to how HMRCs targets are meant to know about the loan charge or the settlement opportunity. In the UK, publishing these terms is not a sufficient way of notifying people if they do not know about it. For foreign non-tax residents or non-domiciled people I would be interested to see your views on why HMRC believes those who may be affected would think to look follow HMRC tax arrangements many years after they have left. Unless this is effectively a retrospective tax, they should have few concerns with UK tax legislation because they have not undertaken any activities in the current tax year that would normally be susceptible to UK tax laws.

2. You highlighted that you notified people through letters, emails phone calls and webinars. Firstly, I did not request that you break the information down by notification type, only that you highlight how many HMRC have notified. I am happy for the data request without this breakdown. Secondly, webinars are not a form of notification, unless you expect people to, for some reason, follow HMRC webinars voluntarily which seems unlikely. Notification should be targeted at an individual level, rather than creating a magical catch-all approach as you appear to have suggested you’ve done. HMRCs charter is expressly clear on its need to treat people in a fair and just way – I would suggest that inadequate notification would fall outside of that.

3. You have identified that you estimate the numbers affected at 50,000. It concerns me that at this point you are still talking about an estimate. Surely to be managing this process properly you now have a view on actual numbers. Otherwise it seem as though you may not have actually notified those affected because you have no view on who they are. Also, note I was happy with an estimate of those non-tax residents affected – if you can estimate the total amount, is there any reason that you can’t estimate this figure as well?

4. Thank you for outlining that non-tax residents are also impacted by this tax. I am aware of this, which is why I requested the information of these people likely to be affected, and whether HMRC has informed them. Right now, based on your response to this FOI I have a feeling that you don’t have a strong view on the number, and are highly unlikely to have notified most of those affected.

If HMRC has not undertaken this effort to date as part of managing the 2019 Loan Charge process, and the related attempt to make people settle, then surely it should be doing it going forward. If HMRC has some other way of generating the information required to adequately manage this process I am happy to receive that in the first instance. But as it stands, your reasons for rejection are not adequate and are either suggesting that HMRC are not performing its job in the manner that it should be, are not willing to do its job in the manner that it should be, and are using the excuse of excessive time to prevent people discovering this fact.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/q...

Yours faithfully,

William Furlots