This is economically brain-dead.

We’ve seen this story before: flashy outsourcing deals sold as “innovation” or “transformation” often end up locked into expensive contracts, plagued by shifting scopes, hidden costs, and vendor dependence. Once the private supplier is entrenched, they hold the leverage - and taxpayers foot the bill for every extra change or fix.

Meanwhile, in-house expertise is hollowed out. The public sector becomes dependent on external firms not just for services, but for understanding its own systems. This creates long-term fragility: the state loses control over critical infrastructure and sensitive data, while the supposed “efficiency” gains evaporate into profit margins.

The very idea should be scrutinised. Why outsource core government functions when the evidence so often shows ballooning costs, delivery delays, and underperformance? Especially when you’re dealing with tax data - the crown jewels of citizen information - handing it to private firms (who may themselves be engaged in tax fiddles) is a glaring risk.

It’s easier, politically, to sign big, shiny contracts than to do the hard, unglamorous work of reforming internal operations. But taxpayers will be paying for this failure twice: once through the contract, and again when the system underdelivers.

@elsergiovolador

"Why outsource core government functions when the evidence so often shows ballooning costs, delivery delays, and underperformance?"

The argument can be to fight ballooning costs, delivery delays, and underperformance. This isnt an argument for either distribution but to identify the problem exists on both sides. For example Labour have just been handing out pay rises like money is going out of fashion because unions demand so. They demand so because labour solution to train strikes was to give them a load of money to go back to work. And once you cave to one the others see weakness and so more demands.

But where is this extra money to do so? We have a huge covid bill to pay already and the national debt incurs a good amount of interest. This is at a time when the gov is hammering growth and jobs by taxing too much already and needing more.

"It’s easier, politically, to sign big, shiny contracts than to do the hard, unglamorous work of reforming internal operations"

Such is the curse of government. It is worth more to them to look good to get votes than to maintain and manage what already exists. Its a difficult one.

You’re right the government faces tough fiscal constraints - but let’s stay focused. Outsourcing doesn’t solve those constraints - it adds to them. Why? Because you’re taking an already underfunded public service and baking in extra costs: contractor profit, shareholder returns, corporate admin overhead, legal wrangling, plus the long-term cost of losing in-house skills. You’re turning a hard problem into a guaranteed money drain.

Here’s the blunt economic picture: imagine you’re broke and your roof is leaking. Instead of patching it yourself or hiring a local roofer once, you sign a 10-year luxury maintenance contract with a firm that says they decide when and how to fix the roof, and you must pay them a management fee no matter what - even if they never lift a hammer. That’s public-sector outsourcing.

Yes, public pay pressures exist - but public sector wages are pitiful, and basic services like trains, healthcare, and tax collection are the arteries of the economy. If you want growth, you need those arteries clear, not choked by broken infrastructure and outsourced band-aids.

High taxes are a real issue, but bad outsourcing guarantees you pay more for worse. It’s economic stupidity in a suit - it lets politicians pretend they’re solving problems while they shovel public money into private hands, locking in poor results and rising costs. It’s not just inefficient - it’s deliberately rigged to be worse.

Capita has entered the room.....

I wrote HMRC a letter to sort something out and their web site said that they expect to process the letter and I shouldn't send another letter or call them again until April 2026 as that's how long it will take to process the letter I sent them in February 2025. This is something I've been trying to sort out for about 3 years - so I'm not surprised with their last response.

I've no idea if outsourcing will be better or worse, but it's pretty dire at the moment.

If you want to see if they are alive, just miss the tax payment deadline by a day.

...or without a coconut? -------------------------->>>>>>>>>>>

We need to focus on something far more important.

If I'm phoning the helpline... you've already failed. It means the tax system isn't clear and obvious, it means that answers cannot be simply found online, and it means that online channels have proved insufficient.

If this happens at precisely one time of the year in excess, too, it means something else is broken: Making everyone file on the same day. It's a nonsense. You could stagger them throughout the year and instantly spread that load across 365 days instead of a handful near tax return time (it's not like that payment is going to happen instantly, it's not like everyone is billed on the same day, etc.).

Someone having to phone HMRC at all means... you failed in the 21st century.

Personally, as a mathematician who was self-employed for nearly 10 years, I avoided everything I could possibly do to make my tax return as simple as possible, precisely because without a qualified and experienced accountant it's impossible to accurately determine whether something is allowed or not, whether there's something else you could claim for or not, where the boundaries lie on any definition, or even what the case law says about exactly what things apply to. I literally took to just putting down my income in one box, filling out all the related calculation boxes (this was when they were still trialling the online tax return), and put zero or N/A in everything else. I could have claimed for ALL KINDS of things back, but it honestly was not worth the time and effort to do so, especially if you got it wrong about something being allowed. The numbers didn't scare me. Even filing it online wouldn't have scared me. But simple things like "what can I claim back and what can't I and how long do I have to keep the evidence of it all" just meant that it wasn't worth my time or hiring an accountant to do it for the odd travelcard and an occasional spot of lunch. Literally, income = X. Expenditure = NIL. Anything else wasn't worth my time to determine it to their extraordinarily un-disclosed criteria to either of our satisfaction.

If you made the tax system simpler, if you tied tax return dates to, say, company start dates, and if you actually had the information and assistance available online... you would probably never need the phone line at all.

And when it comes to benefits, it's quite simple. Tell people what they're entitled to based on HMRC's knowledge, write them a letter (or an online notification) every month reminding them of any eligibilty or circumstance change, and then police that effectively so that people can just simply tell you "Oh, yes, someone lives with me now" or "I got divorced" or whatever, and when it appears on their dashboard every month they can't deny "not knowing". And you can't deny that it would be far simpler to just allocate the benefits according to that data than faff around expecting elderly/disable/etc. people to magically know what they might be entitled to.

"If this happens at precisely one time of the year in excess, too, it means something else is broken: Making everyone file on the same day. It's a nonsense. You could stagger them throughout the year and instantly spread that load across 365 days instead of a handful near tax return time (it's not like that payment is going to happen instantly, it's not like everyone is billed on the same day, etc.)."

They set the target dates for self assessment, e.g. Oct 31st for paper filing, Dec 31st for online if you want to pay by instalments in the next tax year, or end of Jan as absolute limit, but nothing says you have to wait until then.

I've had about 5 emails since April from them saying why not get your assessment out of the way now. My tax affairs aren't complicated, really just the high income child benefit charge, reclaiming gift aid and interest payments over £500 total to declare in case banks have screwed it up so I can knock mine on the head within about 20 minutes once I've got my P60 but YMMV.

Obviously more complicated for the self-employed where they are changing over to quarterly reporting.

... and that's why it won't be done!

I take the same view as you. I don't even self-assess as the TAX office know that it's not worth it. I do claim professional memberships and home office expenses - by letter, every couple of years. I have tried claiming online and it was fine for a few years, but it had changed last time I tried and it is just too obscure to do something so simple, so back to writing a letter.

Return your Tax on your birthday. A date you can remember easily, and that should spread the workload for the office fairly evenly through the year!

The UK tax system’s complexity isn’t an accident. It’s a design feature. Complexity keeps the average person uncertain, anxious, and overpaying - while the wealthy and corporations pay for specialists to navigate the loopholes. The system works for them because they have VIP access: private tax advisers, priority HMRC hotlines, bespoke settlements. Meanwhile, the ordinary taxpayer is dumped into overloaded call centres or labyrinthine online forms, forced to over-disclose and under-claim, terrified of triggering penalties.

When government outsources these broken systems, there’s no incentive to fix them. Why simplify the tax code when the chaos itself creates profit opportunities? Outsourcing contracts, consultancy gigs, software deals - all thrive on the existence of unsolvable problems. The corporations lining up to “solve” HMRC’s mess often have deep ties to political donors, former ministers, or elite networks. You can bet they aren’t bidding to abolish their own revenue stream by making the system clear, fair, and self-service.

This isn’t just inefficiency - it’s a structural class mechanism. The rich glide through the system on polished rails; the rest are left waiting on hold. British “fairness” and “decency” are just the polite wallpaper over what is, fundamentally, a rigged setup.

Until we recognise that the complexity and dysfunction are features, not bugs, outsourcing will keep serving the same elites - and taxpayers will keep paying the price, both financially and in wasted human energy.

This is Labour in power, feeding the working class empty promises while handing the real system over to corporate elites.

>” This is Labour in power, feeding the working class empty promises while handing the real system over to corporate elites.”

You were doing so well.

The complexity of the tax system (and welfare & tax credits systems) is largely due to Conservatives, Labour are using the system they been given, and as you observe availi themselves of the complications it allows.

Child benefit is a good example of a simple benefit getting changed into a class/wealth football, for no real gain to the taxpayer.

The sad bit is that if Reform actually form a government I doubt they will do anything to simply the tax system.