In his inaugural speech as President of the Chartered Institute of Taxation (CIOT), Ray McCann will today emphasise the importance of maintaining high professional standards in the tax profession, while also stressing the need for HMRC to show respect for the rights of taxpayers and the role of professionally qualified agents.
As well as being a former chair of the joint CIOT / Association of Taxation Technicians (ATT) Professional Standards Committee, Ray is the first former HMRC inspector to become CIOT President (though former employees of HMRC’s predecessor bodies have held the role, including the first Institute President, Ronald Staples). During his 31 years with HMRC Ray was responsible for, among other things, the introduction of the Disclosure of Tax Avoidance Schemes (DOTAS) regime and the setting up of the Avoidance Intelligence Unit.
Speaking at the CIOT’s annual general meeting this afternoon Ray will also:
· Praise CIOT’s Low Incomes Tax Reform Group for its work since it was founded 20 years ago
· Welcome the growth in the number of CIOT members within HMRC
· Question the extent of the current system of reliefs within the tax system
· Restate the CIOT’s commitment to contributing to the design of an efficient and fair tax system
In addition to Ray McCann becoming President, Glyn Fullelove today becomes Deputy President and Peter Rayney Vice President of CIOT.1
On maintaining high professional standards Ray will say:
“Together with our partner professional bodies, in 2015 we took our professional standards in PCRT [Professional Conduct in Relation to Taxation] and started a new journey to make them relevant for today so that every member adheres to the highest professional standards. That journey has not ended.
“Having done that let me be clear, we laid out our principles and intent in PCRT, the CIOT exists for those who want to adhere to our standards we will not compromise on them. With our fellow professional bodies we will adapt and update them where needed and we will ensure that they are fit for purpose.
“For those members who support them we will always be with you. But we have no place or tolerance for anyone, member or not, who believes that the tax system is fair game for abuse or who ignores the reality that tax saved by one client through being encouraged or sometimes even misled into gaming the system is paid by someone else, often the less well off. In the end, unchecked, it damages us all.”
On his career at HMRC Ray will say:
“It is 12 years since I left HMRC. I still feel a sense of gratitude and affection for the Revenue and the career it gave me. I admit to some despair when I hear how dispirited former colleagues are at the continued upheaval and criticism.”
On relations between the Institute and HMRC Ray will say:
“We have strong relationships with the senior leadership of HMRC and good relationships at all levels but many of our members report that often the day to day relationship is more mixed. We obviously need to be careful not to see things through a one way lens and we cannot expect the senior leadership of HMRC to be on top of every case. But we can expect them to drive across the whole of HMRC a tone and approach that is conducive to mutual respect and to encourage open and efficient work practices.
“We should also be able to encourage HMRC to review its strategies and whether they are delivering what we all want.”
In particular Ray will express concern at HMRC’s approach to litigation, suggesting it is sometimes used inappropriately:
“Even some former HMRC people I know despair at the seeming lack of respect some in HMRC show for a taxpayers rights and the role of agents. It cannot be acceptable to anyone (including HMRC) when the LSS [Litigation and Settlement Strategy] is used to justify years of delay and an all or nothing approach is applied across the board, often to amounts of tax that anyone would consider low.
“Likewise there is no justification for causing manifest unfairness to many in the interests of “treating everyone fairly” or in forcing taxpayers who already feel they are being treated unjustly into a stressful and costly Tribunal process. When Tribunal judges make comments such as “where do I start” or “It is difficult not to conclude that HMRC has wasted everyone’s time” or they bar HMRC from presenting its case, it is clear that something is going wrong.
“Yes, HMRC wins all or most of the tax avoidance cases; we expect them to and we support them in that. But we must not lose sight of the fact that thousands of taxpayers, perhaps tens of thousands, remain in limbo. Many have been under enquiry for a decade or more and we need to keep pressing for a way to get this backlog cleared because the numbers make certain that HMRC will still be at this years from now.
“Too often supposed solutions have increased HMRC’s workload and made life desperately difficult for many of those involved who I am sure would like to put this behind them. To be fair to HMRC, unwarranted accusations of sweetheart deals have no doubt made finding a solution very difficult, but we must continue to find a way; only the promoters of these schemes were to blame but responsibility for how we got here is shared much more widely.”
On a more positive note Ray will welcome growth in the number of CIOT and ATT members within HMRC:
““Them and us” is becoming a thing of the past. There are now hundreds of CTAs and ATTs working in HMRC and I want to encourage that number to grow even more. It was great to see two members of HMRC were ADIT [Advanced Diploma in International Taxation] prize winners this month and two others received their ADIT diploma. ADIT is a success story that goes from strength to strength and is very popular with HMRC.”
Ray will stress the need for CIOT to play a constructive role in responding to concerns about unqualified tax advisers:
“As we have strengthened our professional standards concern remains in government and HMRC about the number of individuals who operate outside of a professional body. And it’s not just HMRC, John Cullinane and I recently met with a senior journalist who was surprised that someone giving tax advice does not need a qualification.
“There is clearly a perception issue; there may be a real consumer protection issue. Either way there is an issue for us and an urgent one. But establishing precisely how many individuals give tax advice outside the regulation or supervision of a professional body or as an employee of a reputable firm is not an easy task. I believe it is important that we play our part in finding a solution.
“This may require us to find new channels whereby such individuals can be brought within a framework that has professional standards at its core, as we have. We should see finding a solution as an opportunity not a threat and I shall be taking this forward with the President of the ATT and others including those involved and HMRC.”
On the Low Incomes Tax Reform Group Ray will say:
“Nothing we do should give us more pride than the support we give to vulnerable people on low incomes… That’s why we celebrate the 20th anniversary of the Low Incomes Tax Reform Group. LITRG was set up by CIOT to give a voice to people who otherwise have no-one to speak for them and it remains an integral part of the CIOT – and a part we are very proud of.
“The message to Government is simple, through LITRG we have shown that a real difference can be made to people’s lives. Funding the work of LITRG and the tax advice charities remains a major challenge. We will continue to make a very significant financial contribution - through the Bridge the Gap campaign others in the wider profession will also contribute - but with more help from Government we could do so much more.”
He will pay tribute to all those involved in LITRG over its 20 years, making particular reference to the the Group’s Technical Director Robin Williamson who retires this summer, having been involved in LITRG from the start.
Ray will also pay tribute to Chris Jones, former Deputy Chair of LITRG as well as a former CIOT President, who died last year:
“His legacy is present very much in what the CIOT does today. Chris was in many ways an advert for the best of us and his pride in being a CTA was obvious. Had he lived he would have become Chair of LITRG and I have no doubt a great one.”
Finally, Ray will also offer some comments on the tax system, questioning the extent of tax reliefs and promising the CIOT will continue to play a part in both increasing understanding of the tax system and improving how the system operates:
“Our system of tax reliefs, especially across capital taxes, is being seen as benefiting the few at the expense of the many… [This] is obviously a decision for Government. But it is right for us to question whether we have to provide tax reliefs that are free from any scrutiny as to their social or economic value to society as a whole?
“To put this another way, it is one thing to offer tax reliefs that encourage and enable businesses to grow, the creation of jobs etc. It is quite another to provide tax reliefs that simply reduce the effective tax contribution of those already well off or in some cases become the tools of the trade of those out to game the system through exploiting the rules.
“We are an educational charity. We promote wider debate on tax to increase knowledge. Government sets policy, Parliament legislates, HMRC administers. We must help get each stage right, we must be leaders not followers, persuaders not just critics, in short we must play our part in ensuring that the tax system can help us all face the challenges of today not those of twenty or fifty years ago.
“The work we do with the Institute for Fiscal Studies and the Institute for Government and others empowers us, if not to have all of the answers, at least to ask the right questions…
“By being a leader in the profession, as I believe we are and must be, we will contribute to the design of an efficient and fair tax system that is safer from abuse more transparent and more capable of supporting the civil society we all value.”More Articles by Chartered Institute of Taxation (CIOT) ...