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HMRC case study 

Red tape can be a major constraint for businesses the world over, draining resources that could otherwise be used to address emerging opportunities and develop more effective operations.

In March 2005, following publication of the Better Regulation Task Force report, Regulation — Less is more, the U.K. Government decided to take action. It asked KPMG in the U.K. to measure the administrative burden of the tax and duty system, surveying thousands of businesses both large and small. At the same time, it asked another organisation to look at red tape across other areas of government.

 

The brief
How KPMG in the U.K. measured the administrative burden on business
HMRC asked us to model the administrative burden of tax compliance using a prescribed methodology — the Standard Cost model. This used activity-based costing techniques to analyse where the most burdensome areas of regulation were. It was a new and innovative approach made even more challenging because the timescales meant there was no opportunity to test the process before starting. Time, in fact, was our number one challenge on this project. We had to deliver our report in time for the 2006 budget — an extremely tight timescale taking into account the scale and complexity of the project.


The solution
We hit the ground running
We quickly mobilised a multi-disciplinary team of over 400 people, mainly from the Tax and Advisory practices in the U.K. firm, renting a large project office in London because of the size of the team. We also used some external consultants and recruited a high profile Advisory Board made up of leading business figures in the U.K.


How the team worked
Anna, who worked as a tax assistant at the time and who has now been promoted to assistant manager in Tax, led the communications work stream for this project, helping to set up the Advisory Board representing both large and small businesses and working closely with the other organisation involved on joint publicity materials. Anna had originally joined KPMG as a marketing assistant but after a year joined our Tax Graduate Entry Plan, gaining her ATT (Associated Tax Technician) qualification in May 2004. She then studied to become a Chartered Accountant, qualifying in December 2006.


"Initially this project was very daunting as many of the team did not know each other and none of us had ever worked on something like this before," says Anna. "However, it was very exciting to be part of a team helping to shape the future of tax in the U.K. I was given lots of responsibility and had the opportunity to make lots of good contacts. I was lucky enough to spend the last six months working for KPMG's Global Head of Tax. One of the highlights of this was organising a project that involved a business trip to Chicago."


Looking ahead, Anna now has her sights firmly set on gaining some international experience. "I plan to have a long career at KPMG. I definitely want to be a very senior tax partner one day," she says.


Lead Project Partner
As Lead Project Partner, Rachel took overall responsibility for the multi-disciplinary project. This meant a day-to-day role of ensuring the different but interdependent work streams were on course to meet the stringent deadlines and were joined up when necessary. She was also the first and main point of contact for the client. Rachel kept the entire team on track and continually boosted morale — her daily 'prayer' meetings during critical stages of the project were definitely one of the keys to achieving the fantastic result.


Senior Manager, Indirect Tax, Process & Technology
Tom was responsible for ensuring the project was completed in time for Budget 2006. His role included running the Indirect Tax team, coordinating the combined Advisory/Tax effort and writing parts of the final report. He was also one of the co-presenters at the Advisory Board meetings and played a major part in the final presentation to the government and business representatives. Following his success on this project, Tom was asked to provide guidance on how to implement the work effectively into the policy-making process, taking a 3-month secondment at HMRC to oversee this.


Results
The British Government used our results immediately
We delivered a very challenging project both on time and budget and the data we collected is now being used to help decide how and where to cut red tape in the tax and duty system. In fact, the Chancellor had sufficient confidence in the quality of our results to use them immediately to set up and announce targets for reducing the administrative burden of tax in the 2006 Budget. This was a major achievement, particularly considering the initial scepticism surrounding the credibility of the model. The Advisory Board concept was also so successful that the Government has decided to keep it going even thought the project has now finished.


Says Anna: "The quality of the U.K. firm's service was seen to be so good that the project won KPMG's overall internal Client Service Award. As an added bonus each team member received an extra 2 days' holiday and an MP3 player!"

 

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