FOIMan comments on the Budget. Well, one particular aspect with data protection implications anyway…

FOIMan's Budget Box
FOIMan’s Budget Box

George Osborne, I’m sure, pleased all of us who work for ourselves when he announced in the Budget that annual tax returns were being abolished. Unfortunately, it turns out he still wants the tax.

Therein lies the problem. How will HMRC know how much tax you owe if you don’t fill in a form telling them how much you earn?

Presumably it will require an IT system to collect and make sense of all the data. A big shiny new online database. Where have we heard that before? Anyone remember NHS databases, ID cards, care:data, – the government-wide website that makes it almost impossible to find anything? Big government IT projects don’t have the best reputation. If you’re not feeling nervous by now though, let’s remember that this is the same HMRC that lost the personal details of 25 million families a few years ago.

How would it work? It seems to me – having only been self-employed for less than 18 months – that one way or another, HMRC will need to access our bank records. Either they would have a direct feed, or would obtain a report once a year. What’s the problem?

Well, I’m a sole trader. Like many sole traders, I use my normal current account to do all my banking – business and personal. I keep records of my business spending so that it’s easy to separate it out when I come to do my tax return. But what will happen now? Will HMRC have access to everything whether or not it’s business related?

I’m perfectly happy for the Treasury to know about my £49 spent on a night at Premier Inn before I delivered a training course. I might not be so happy for them to know about the £5.99 I spent in Boots on “Chemist Goods”. Or the £120 I spent in Majestic Wines at the weekend (or at the Dog & Duck Pub – take your pick). Perhaps I’ll need to set up a new business bank account to preserve my privacy – for which I’ll have to pay a fee.

It would certainly be desirable for the current process to be streamlined, and I’m not against what the Chancellor is proposing in principle. But if it is to avoid the problems encountered with other government IT projects, HMRC would be well advised to carry out (or ideally to have already carried out) a privacy impact assessment (I’ve provided a link to the Information Commissioner’s Code of Practice on Privacy Impact Assessments in case they need it). Will we self-employed be consulted to establish issues like the ones I’ve raised above? How will the data be secured? Who else will have access to it, and for what purposes? No doubt this data will have value to others – but should they be allowed to use it?

All good questions, and ones that should be asked sooner rather than later. Perhaps they already have been, and I’m worrying about nothing.


  1. I doubt Gideon and his cronies give a monkeys about privacy.

    Using the bank account example you may remember a few years back when the national Fraud Initiative started and there was a furore after bank account no’s were handed to the NAO for public sector staff despite many accounts being jointly held and the other account holder not being a public sector employee.

    What was there solution? Tweak the rules to allow them to share these no’s anyway.

    I suspect that will be the case here. Privacy is an inconvenience that can be dealt with by legislating it away, nothing more, nothing less.

    Cynical maybe but I am slightly jaded by the attitudes of the last couple of governments and their attitudes to personal privacy.

    Lee Gardiner

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