The incoming President of the Chartered Institute of Taxation (CIOT), Patrick Stevens, will today tell CIOT members that the tax profession should be prepared to speak up in defence of the UK tax system when it comes under fire unfairly.
While acknowledging that the system is far from perfect, he will say that a stream of negative – and at times misleading – headlines about HMRC and the tax system risk giving taxpayers the impression the system is broken, which could undermine confidence in the system and reduce compliance by taxpayers. The CIOT should combine robust representations to the tax authorities on behalf of taxpayers and their advisers, with robust challenges to exaggerations about the tax system’s failings, he will argue.
Patrick Stevens will make the remarks in his speech at the CIOT’s annual general meeting in Westminster at 4pm today, as he succeeds Anthony Thomas as the Institute’s President. Stephen Coleclough is the new Institute Deputy President and Anne Fairpo becomes Vice President.
Patrick Stevens will say:
“In my day job, one of my responsibilities is to visit my tax colleagues around Europe and in some other parts of the world and see how they are dealing with their local tax systems and administrations. One of the countries in my area of responsibility is Greece... For the most part, the only people who pay anything close to the right amount of tax in Greece are overseas companies and groups doing business there... [Consequently] the country is completely broke”.
“In the UK we are in a different place. We respect the rule of law and our laws generally give a sensible result. The correct amounts of tax are paid and the tax system works smoothly most of the time. Nevertheless, over the last couple of years there has been a pretty steady stream of headlines in newspapers about the mistakes made by HMRC, their inefficiencies, the hidden economy, deals done with some large companies and the ability of some companies to do business in the UK while paying very little tax... Everyone in this room knows that we are so far away from the position in Greece that you cannot compare it. But every time those headlines appear, one or more of the passengers on the Clapham omnibus thinks our system must be broken and there is no need for them to join. That affects our members. It is often the perception rather than the reality that is important.
“We must continue our work to ensure our tax system functions effectively. We tax practitioners and tax directors need to help the HMRC side of the tax profession to get this right. This means that we must draw their attention to problems as they arise and push them towards getting it right. We should be robust - as we have been, for example, over business record checks - when we think they are not getting it right. But we should also support them when journalists, campaign groups and even, on occasion, politicians exaggerate their failings, and present the system as broken when it is not. Imperfect? Yes. Frustrating? Frequently. Over-complex? Undoubtedly. But not broken.”
He will say that some of this week’s headlines about the annual PAYE end of tax year reconciliation, which have suggested that under and overpayments are the result of widespread HMRC error, show a failure to understand the practice of PAYE and the purpose of the reconciliation process:
“There are lots of reasons why tax collected may be incorrect at the end of the year and most of them are not HMRC’s fault. But people believe what is repeated and not challenged – so we should challenge it. The risk in letting claims of a broken tax system go unchallenged is that people will believe them – so we should challenge them too.
“Our system could be better. But Britain is not Greece, and we should not let the perception that it is get legs.”
Notes to editors
The full text of Patrick Stevens’ remarks is available on request.
Patrick Stevens started his career with a two partner firm of accountants in Norfolk and since then has experienced life in most segments of the profession. This includes several years with a firm just outside the top twenty accountants, some time with BDO, and the last 16 years as a partner at Ernst & Young in London. During his time at E&Y he has spent a number of years as managing partner of the growth markets part of the business. His areas of tax specialisation include entrepreneurial companies and their shareholders, professional partnerships, retail investment funds and private clients.
These days he has a range of responsibilities within Ernst & Young including looking after the tax affairs of the firm in the UK, the EMEIA Area and the Global organisation as well as commenting to the newspapers and television on current tax matters. Patrick was elected Vice President of the CIOT in May 2010 and Deputy President of the CIOT in May 2011.
The Chartered Institute of Taxation (CIOT) is a charity and the leading professional body in the United Kingdom concerned solely with taxation. The CIOT’s primary purpose is to promote education and study of the administration and practice of taxation. One of the key aims is to achieve a better, more efficient, tax system for all affected by it – taxpayers, advisers and the authorities.
The CIOT’s comments and recommendations on tax issues are made solely in order to achieve its primary purpose: it is politically neutral in its work. The CIOT will seek to draw on its members’ experience in private practice, government, commerce and industry and academia to argue and explain how public policy objectives (to the extent that these are clearly stated or can be discerned) can most effectively be achieved.
The CIOT’s 15,800 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’.
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