Tag Archives: simplicity

How HMRC costs us 90 hospitals through complexity

There’s a good article in the Guardian by Polly Toynbee today, illustrating the chaotic effects of politically influenced short term-ism on systems. The official estimate (i.e. lowest, most optimistic level) of missed revenue on tax collection is £35bn but it could range as high as £100bn. The entire HMRC costs £3.5bn to operate yet their system generates 10 times as much again in effective failure demand.

£35bn is about the cost to build 90 hospitals. It’s a third of the NHS Budget. We could give all 450,000 full time teachers in England a £12k raise to £50k (similar to average newly qualified accountants/solicitors) so they’re paid like the professionals de-facto developing the next generation should be – and still have enough leftover to give all 2.3 million unemployed a £5k grant to start a business.

Take one look at a self-assesment form and it’s no wonder the system is rife with potential for misery and manipulation, never mind what a corporate tax adviser can do with it.

I’m sure a big part of why taxes are so complex and high is the inevitable overhead in simply maintaining a system so horrifically complex and impenetrable. When the head of the National Audit Office says “Reducing running costs by £1.6 billion over four years is a big challenge for HMRC“, it seems like ripping out complexity would make that rather trivial.

Moral of the story: If it’s simple, it’s hard to game. It’s hard to get wrong, fake, cock-up, cover-up and miss mistakes that cost yet more in failure. If it’s simple, it’s easier to operate. It’s easier to teach, support, use, improve, scale, monitor and measure. Simple resists meddling. Simple is powerful.

Engineering Simple into a system isn’t easy, but it’s so powerful when you can achieve it : 90 hospitals powerful.