Opinion Former Article

Tax advisers welcome Treasury Committee reviews of tax

Commenting on the launch of three parliamentary reviews into the tax system, CIOT Tax Policy Director John Cullinane said:

“We welcome these three inquiries into aspects of Britain’s tax system. They are an opportunity for HMRC, the Government – and other stakeholders such as professional bodies – to take stock and renew their efforts to work towards a more efficient and less complex tax system in which the public can have greater understanding and confidence.”

The three reviews will be carried out by MPs on the Treasury Committee; they will look at the VAT in relation to Tax Gap, Brexit, Business and Good Tax Policy; how well HMRC is dealing with tax avoidance and evasion; and The Conduct of Tax Enquiries and the Resolution of Tax Disputes.

The CIOT believes that the more straightforward the tax system the less opportunities there are for aggressive and abusive tax avoidance schemes; and the less need there is for costly HMRC intervention. There is much work to be done by the Government and politicians in simplifying and streamlining the system.1

The CIOT and other professional bodies recognise that they also have a responsibility to help support the integrity of the tax system. Seven professional bodies work together to maintain and update Professional Conduct in Relation to Taxation (PCRT), which seeks to govern the conduct of tax professionals in the context of the ‘tripartite relationship’ between the tax adviser, their client or employer, and HMRC.2

John Cullinane said:

“We believe the PCRT Standards for Tax Planning make it clear to any of the small minority of tax professionals who are tempted to facilitate and promote tax avoidance schemes that this behaviour is not acceptable. The Government has supported the professional bodies in updating PCRT, with HMRC acknowledging that the guidance sets out an acceptable basis for dealings between members of the bodies and HMRC.”

John Cullinane added:

“We hope the reviews that have just been announced lead on to more effective and routine post-legislative review of whether tax measures are achieving their objectives at an acceptable cost. The Treasury Committee is suited to such a role and should hold government to account for its announcements on tax, some of which are announced at Budgets without any or very little prior public consultation.

“The CIOT has long argued that HMRC need to put more effort into investigating and prosecuting those who seek to evade tax. MPs would be right to call for extra resources in this direction, as well as tackling artificial and abusive attempts to avoid tax.”

Notes for editors

1.       Published by the Chartered Institute of Taxation (CIOT), Institute for Fiscal Studies (IFS) and Institute for Government (IfG), the Better Budgets report outlines ten steps toward making better tax policy, see link here.

2.       The Professional Conduct in Relation to Taxation (PCRT) sets out the high ethical standards which form the core of the tripartite relationship between tax adviser, client and HMRC. It was last strengthened in late 2016 by the leading UK accountancy and tax bodies, including the CIOT.

In that update, the professional bodies strengthened the pre-existing five fundamental principles by the addition of five new Standards for Tax Planning that members must observe. These included a standard which makes clear that members “must not create, encourage or promote tax planning arrangements or structures that (i) set out to achieve results that are contrary to the clear intention of Parliament in enacting relevant legislation, and/or (ii) are highly artificial or highly contrived and seek to exploit shortcomings within the relevant legislation.” Such behaviours would lay a member of one of the bodies open to disciplinary action.

This addition to the PCRT responded to the Government’s challenge to the professional bodies, made in March 2015, to take a greater lead in setting and enforcing clear professional standards around the facilitation and promotion of tax avoidance. The professional bodies that work on PCRT are: Chartered Institute of Taxation, the Association of Taxation Technicians, the Association of Accounting Technicians, the Association of Chartered Certified Accountants, the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants of Scotland and the Society of Trust and Estate Practitioners.

3.       The Chartered Institute of Taxation (CIOT)

The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.

The CIOT’s 18,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.

Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk  (Out of hours contact: George Crozier, 07740 477 374)

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