CIOT president: Tax system ‘not broken’

The UK tax system is often frustrating and too complex but it is “not broken”, according to the new president of the Chartered Institute of Taxation (CIOT).

In his inaugural speech, incoming president Patrick Stevens said that although the UK tax system is “far from perfect” a stream of negative and at times misleading headlines about HMRC and the tax system risk giving taxpayers the impression that the system is broken. This could undermine confidence in the system and reduce compliance by taxpayers, he said.

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, said Stevens, who succeeds Anthony Thomas.

The tone of Stevens’speech and his measured support for HMRC contrasted with his predecessor Anthony Thomas who began his year in 2011 by warning HMRC that it risked losing taxpayers’ and advisers’ trust.

Coverage of HMRC mistakes in the past couple of years and deals it has done with some large companies may give people the impression that the UK tax system is similar to Greece’s, Stevens said.

“Everyone in this room knows that we are so far away from the position in Greece that you cannot compare it,” Stevens told CIOT’s annual meeting in London. “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.”

Tax advisers should support the taxman when journalists, campaign groups and politicians exaggerate its failings, and present the system as broken when it is not, Stevens said. “[Is the UK tax system] imperfect? Yes. Frustrating? Frequently. Over-complex? Undoubtedly. But not broken.”

Stephen Coleclough has been made the CIOT’s new deputy president. AccountingWEB contributor Anne Fairpo was appointed vice president and should rise to the top spot in 2014.

Comments

"not broken"    3 thanks

mikefleming3028 | | Permalink

As a rule of thumb my old senior partner used to say "if it ain`t broken don`t try to fix it". If as Patrick says the tax system is not broken why oh why are the Treasury / HMRC  introducing new or amending Legislation  like its going out of fashion. Having spent 19 years with HMRC and 26 in private practice I thought i had seen it all that is until I had the misfortune to read George Osbornes Remit Letter to Lin Homer dated 29th march 2012. If I was still a serving Inspector or a trainee with prospects I would without doubt be considering my future and  looking for the Exit door. The Treasury has at a stroke raised the bar to a level that any Chief Exec of a multi million £ business in his right mind would reject out of hand. I would like to have been a fly on the wall when this missive landed on Lin Homer`s desk and if I was a betting man I would be tempted to give odds on how long it will be before a new Chief Exec is being head hunted.

I would recommend Mr Osbornes Remit Letter to your readers and if shall leave it up to their judgement to decide if the current  system is either broken or fit for purpose in the opinion of the Chancellor.      

 

 

What!    3 thanks

ThornyIssues | | Permalink

From the ordinary small business users and general taxpayer, it is seriously broken. When it takes 62p in the Pound to collect taxes (the highest in Europe and one of the highest in the World), the tax system is broken by almost any benchmark.

It is not broken of course when there is vested interest in maintaining the status quo.

mr. mischief's picture

Sad news    4 thanks

mr. mischief | | Permalink

Personally, I found the previous guy really refreshing.  There is more or less a conspiracy of silence from the main accountancy bodies.  Maybe the guys at the top never have to deal with HMRC personally, more likely they all meet each other in Club land so don't want to tell it how it really is because they'd be upsetting their mates.

Whatever the reason, the system is close to meltdown and anyone who says anything different should forthwith emigrate to Greece where pretending things are not the way they are is par for the course.

And if it's close to meltdown now, RTI could just be the tsunami that blows the reactor core wide open.

weaversmiths's picture

Not a clue    1 thanks

weaversmiths | | Permalink

Patrick Stevens must have his head permanently buried somewhere. I wonder if he would change his tune if he was faced with Bailiffs taking away his goods because HMRC are inept at keeping records of payment and answering post?  Possibly not, he has to keep in with the right people.  Shouldn't have put his picture up - one can read a lot from a photograph.

 

TheAncientOne

Headless chickens    1 thanks

The Black Knight | | Permalink

Will it make any difference?

HMRC will do the opposite to what is sensible just for the sake of it.

Consultation? Well you can but we don't take any notice.

Accountancy bodies and accountants, well you have a vested interest (spin for you can see what is happening and we don't want to listen to that).

added to which I feel that those presenting to HMRC on behalf of the professional bodies do not really understand either, because it is all a jolly wheeze to run off an write some more software and courses on the new rules.

Greece! It's closer than you think...We might have nasty penalties but no enforcement and if you don't want to pay your tax then you don't have to. There are lots of methods that work.

e.g.1. Form a company online (very cheap) trade for 2 years, put some dividend income on your personal tax return, don't file the accounts. Companies house will help you by striking off and HMRC will not pursue because it's too much effort. Start new company (similar name if you like) and repeat process. Naturally you can be more competitive and work with lower margins thus putting the opposition (the mugs that pay their tax into your tax credit payout fund) out of business.

In the meantime we are fiddling with PAYE and cash accounting while the real tax revenues go up in smoke!!!

Anyone still wonder why our economy is F*******

This is not a matter of HMRC v Accountants v the daily whotsit.....The current position and plans are headed in one direction.........GREECE.

The answer is stop fiddling and get on with enforcing against the errant not the willing customers. Tax simplification Job done! Then you can change the bits that are silly one line at a time.

Some people obviously have a vested interest in a failing economy!

 

Broken tax system

ken of chesterl... | | Permalink

I am no defender of the tax system, and if it costs that much to collect it certainly needs looking at, but how is the figure of 62% arrived at, please?