Simon Sweetman was an inspector of taxes for 18 years. He left the Inland Revenue in 1989 to join Chartered Accountants Scrutton Goodchild & Sanderson, later part of Scrutton Bland, where he was successively a senior manager and later a partner. He has been an independent consultant since 2001. He is a former member of the tax policy unit of the Federation of Small Businesses and the small business working group of the Chartered Institute of Taxation.
Well, we all agree that it is everyone’s right to arrange their tax affairs however they like in accordance with the law (actually lots of people don’t but let’s start from there), says Simon Sweetman.
Much of the professional comment about the appearance of tax skippers from the Big Four in front of the PAC misses the point badly. They are not accused of breaking the law (well, not deliberately, though they sometimes misjudge it) but of legal practices which in a time of comparative hardship for ordinary people (and ordinary workers have not seen their position improve for 20 years – all the new created wealth was scooped up by the rich) are seen as deeply offensive and as a way of avoiding taking just their fair share. That feeling goes well beyond MPs.
And then we have the story of the Cup Trust, revealed by the Times. Here we have a supposed charity which raised £176m in donations and managed to give £55,000 of it to charity, with the balance going back to its donors one way or another – but still enabling them to claim gift aid relief. Now this may or may not succeed in the long run, but it appears to be as blatant a piece of manipulation of the tax law as one could hope to find (bearing in mind that there could be stones to be turned over out there with even more unpleasant things lurking underneath). Somebody – somebody with a substantial knowledge of tax law – set this up. Now, to be fair, it looks like something with a tax barrister’s sticky fingers all over it, but the people who have subscribed to it are very likely to be Big Four customers and certainly have taken their advice. So if you see a client doing something profoundly unethical and (perhaps more to the point) with what seem like slim chances of success, what do you advise?
Nobody asked that question at the PAC and commentators are right to point out that MPs don’t know very much about tax compared to those of us who don’t know much about nothing else: but it’s not really the point. What MPs do know is which way the wind is blowing.