State of the profession report: Taxation

To prepare for a return to the role of AccountingWEB.co.uk editor, John Stokdyk takes a personal look at how the UK tax landscape has changed in the past five years.

When I set off for my sabbatical in the world of technology in 2005, what everyone said they wanted was simplification of the tax system. Did they get it? Fat chance. The closest we got to anything approaching reform was the tax law rewrite project, which conincidentally reaches its cocnclusion with the implementation of the Companies Act 2008 in April.

Continued...

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Comments

Question of Balance

Anonymous | | Permalink

If it's true that accountants bear a duty to help clients minimise their tax liabilities, then does it follow that tax inspectors bear a duty to maximise tax liabilities?

Inspectors seeking to maximise tax liabilities unfairly is a frequent - and perhaps justified, what do I know? - source of complaint. But why complain if they are, as suggested in the previous paragraph, just doing their duty?

'Ah yes' you will say 'but they do it zealously, and unfairly'. But surely, clients expect their accountants to be zealous in minimising their tax liabilities. And, dare I say it, they don't mind if their accountants are a little unfair to HMRC.

I'm going to nail my anonymous colours to the mast here. I think that accountants and tax inspectors should be striving to get people to pay the right tax at the right time. But I am certainly not going to attempt a definition of 'the right tax'.

Right tax at right time?

Anonymous | | Permalink

I am totally with this last post.  I strongly believe that we should help our clients to pay the right tax at the right time.  Might I suggest that the 'right tax' determined by the accountant should be on the basis of the accountant having a reasonable grasp of the applicable tax law and also having reviewed the relevant books and records of the client.   Do we therefore need to ask HMRC to weed out incompetent agents?......

I have just finished preparing the 2009 tax return for a new client.  I have also had to register them for VAT as from 1 December 2006, and resubmit their tax returns for 2007 and 2008, not only because of the flat rate VAT that came off the original profit, but also because the previous accountant had, quite extraordinarily, only charged net salaries in the accounts!  The recorded payments to HMRC had been totally ignored!  At least these revisions will produce £7,000 towards the VAT bill of £16,000.

It is true that this so-called accountant had only charged £200 plus VAT a year, but why, oh why, are they allowed to act as tax agents at all? 

If any one wishes to add their reasons and pleas to mine for HMRC to remove approval from persistently negligent/ incompetent agents, do contact your professional body with comments.  For the ICAEW, the contact person  dealing with HMRC on 'Working with tax agents' is Frank Haskew.

Right tax at right time

sandralee | | Permalink

I agree wholeheartedly with the 2 comments thus far about paying the right tax at the right time. Having worked in industry for large global companies, and now focussing on SME's as a sole practitioner, the tax burden does appear  to rest with the smaller sized companies, with no opportunity to indulge in tax avoidance schemes.