It took a top flight lawyer to tell the tax profession what they didn’t want to hear: That they are out of touch with the zeitgeist on matters of tax avoidance.
Des Hudson, former Chief Executive of the Law Society and current chairman of the Taxation Disciplinary Board was addressing the great and the good of the tax profession at the CTA Address. His core argument was: There is a disconnect between the tax profession and what society demands on tax behaviour. To bridge this gap the tax profession must reconnect with society as a whole.
A member of the audience said the standard of behaviour tax advisers should adhere to is to advise clients to pay all the tax the law requires – not a penny more – and that clients should be assisted to pay as little tax as possible. Des Hudson said this was exactly his point: such behaviour is no longer socially acceptable.
If organisations and individuals are seen to be avoiding tax, even through legal means, that is wrong. He went on to say that society’s expectations of the tax professional now goes beyond telling clients what the law allows, and arguing if you don’t like what the law allows then change the law. That position is no longer seen as persuasive, and the tax profession will fail when using that argument.
Tina Riches of Smith & Williamson made the point that current world of tax advice is completely different to that perceived by the public, as the tax cases going through the courts now are a result of what happened ten years ago.
Several members of the audience also emphasised that a big stumbling block to reforming the behaviour of certain tax practitioners is that the “tax profession” is not regulated; anyone is free to call themselves a tax adviser and is accepted by HMRC to provide tax services.
If Government wants to alter the way the professional bodies act they should consider whether tax should become a protected profession, with statutory rules on who can provide tax services. Des Hudson accepted that restricting who can provide tax services, such that those practitioners are subject to the professional bodies’ ethical code and rule book, is in the public interest.
Another view from the floor was that the profession should fight back and argue against the positions put forward by some of the so-called representatives of “civil society”, that the UK would be in a horrible position if tax legislation was applied in the way those representatives want. Des Hudson said it was too soon to do this, as informed public opinion is currently against tax avoidance.
What do you think? Should we be concerned with the opinions of the vocal section of society who hate the bankers, as they have a nil understand of the difference between tax planning v. tax avoidance v. tax evasion?
Rebecca Cave is the author of Tax Rates and Tables 2015/16 (Pre-Election edition) published by Bloomsbury Professional.