Visualising tax law
A Good Law event on 24 September discussed an approach that Dutch authorities use to uncover the structure of the laws they administer and identify duplication and inconsistency. Nick Birks works in the Central Customer Directorate at HM Revenue & Customs, which is exploring the method. Here he writes about what the Good Law gathering looked at.
Visualising tax law
What does tax legislation have to do with Douglas Adams’ Hitchhiker’s Guide to the Galaxy?
HMRC administers a galaxy of tax law built up over decades in response to different priorities, but that’s where the connection ends. Although we have experts in every area of legislation, there’s no complete guide available to them showing what all these are.
Lately we’ve been trialling methods that government departments in the Netherlands and Belgium are using to show the structure of the regulations they administer.
The chief outputs are pictorial representations of legislation and processes on giant posters. Those of us at the Good Law gathering in September had the opportunity to inspect and discuss them.
Tax Law Challenges
HMRC was keen to explore the potential of a poster that would show tax law as it looks to the public, because most of our costs flow from the way we support the public in complying with their tax obligations and getting their entitlements (in case you are wondering why a Customer Directorate is involved).
We also have an ambition to design all our services around customers, not the individual taxes they pay or how we in HMRC organise ourselves. In pursuing this quest, a number of challenges arise from the way we administer legislation. One is keeping guidance for the public up to date with continuous legislative change. Another is something called ‘process convergence’ — standardising processes across all tax product lines, in place of a bespoke process supporting each product.
There are also things we’ve managed without for so long we haven’t known we needed them. One is an overview of all policy, processes and customer journeys across HMRC. We would have doubted it possible to tame a beast built up piecemeal, where we’ve become used to ring fencing specialists as a way of managing large volumes of disparate legislation.
Volume of legislation
One government department in the Netherlands told us that a policy and process overview poster had brought out unseen differences and let them reduce the quantity of policy by more than a third.
What did they mean by policy? In HMRC, geared up to annual Finance Bills and largely relying on legal authority to shape behaviours of the public, policy is a synonym for legislation. Policy colleagues are the in house experts who commission legislation from the Office of the Parliamentary Counsel (a little different from departments where qualified solicitors coordinate with drafters).
The Dutch take a slightly wider view. Policy is the regulations and the essential processes those regulations depend on to be delivered. Together these represent the ‘DNA’ of the department.
HMRC trial
Our process transformation colleagues were keen to try out the approach. They want to know what legislation governs each process and whether it stands in the way of reform. Does the law specify something be done on a paper form with a wet signature? If so, could we get an idea of the space we might need in future Finance Bills to digitise the process?
A group of policy experts and process owners got together to identify areas for a trial. More colleagues rolled up sleeves to produce a core team of four experts who could build something as a proof of the concept in a UK context.
Designing the poster
After a day’s familiarisation, the software was easy to use.
More effort went into design. A simple web tool let us organise our inputs by ‘Areas of Interest’. We found a trade-off between clarity and clutter, and that seven areas are as many as anyone can handle given the constraints of working memory. Other than that, we could add anything we wanted, ourselves, to arrive at an architecture that would work with HMRC’s legislation.
Eventually we had a design based on nine tax product lines, intersected by nine generic process steps. We tweaked this a few times when we tried to fit in another product, so it would cover all situations.
The Dutch provider also enabled direct import of statute from www.legislation.gov.uk. We found this site doesn’t always take account of changes made in subsequent Finance Acts, which was initially perplexing (“there’s no Section 8ZA in our tool, where did that come from?”) It meant this part wasn’t as straightforward as we would have liked.
(Detail: once we had input items, we had to ‘relate’ them to a process step in a product line. That means legislation shows up on the poster as a small orange box. Customer forms are small yellow boxes. Looking at where clusters of coloured boxes show up across different tax products provides inspiration on where to simplify.)
Did the model tell us anything about HMRC’s business?
The trial highlighted 74 registration forms in three (of nine) product lines. We’ve since identified 183 registration forms, a long way from the five main ones we usually think about.
We discovered that it was hard to find people who know about the process the public uses to transact with HMRC, and knew about the laws.
A real insight was that staff don’t know the difference between processes based on administrative policy and those that have legal authority — decisive knowledge when looking for what to simplify within the limits of legislation.
We found we had nine times the volume of guidance as legislation. This was something we didn’t know we already knew (for 10,000 pages of tax law we had 89,000 pages of public guidance, before gov.uk).
Specific differences
We found differences in the two main areas we looked at. For example, five payment options and 116 help sheets for one tax product, ten payment channels and 76 help sheets for the other. Of course, had we asked ourselves we would have discovered this anyway, but the model provided a stimulus, ahead of any specific project to look at the similarities and differences between the two.
A Hitchhiker’s Guide to the Galaxy?
Following the trial, we took the decision to complete the policy and process overview for all product lines. Will this mean we will eventually have the guide to HMRC’s legal galaxy?
We hope to find out, but the Douglas Adams analogy may not stop there. The Dutch find the posters let people from different areas of expertise understand each other despite their specialised vocabularies — think the ‘babel fish’ in The Hitchhiker’s Guide (the alien fish acting as a universal translator between species).
Whether a fully completed poster will merit Don’t Panic in large, friendly letters, we shall find out.
Nick Birks of HM Revenue & Customs’ Central Customer Directorate