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Tax professionals should be willing to defend tax rules when they're wrongly criticised, according to Patrick Stevens, the new president of the Chartered Institute of Taxation (CIOT).
Speaking at the professional body’s annual general meeting, Mr Stevens acknowledged that the UK’s tax system is not perfect, but he went on to say that negative – sometimes factually incorrect – media coverage risks giving taxpayers the impression that legislation is not working, which could undermine confidence and reduce compliance.
Comparing the UK’s tax set-up with that of Greece, where ‘for the most part, the only people who pay anything close to the right amount of tax… are overseas companies and groups doing business there’, the new CIOT figurehead said British taxpayers ‘respect the rule of law, and our laws generally give a sensible result’.
But he warned that in recent 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’.
‘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,’ said Mr Stevens, who has been a partner with Ernst & Young for 16 years.
His remarks follow those of his predecessor, Anthony Thomas, who last month attacked the ‘ill-informed, ill-conceived, ill-thought out and often deliberately misleading’ press coverage of tax matters.
Mr Stevens said this week’s reports that underpayments and overpayments of PAYE were the result of widespread Revenue error show a failure to understand the purpose of the reconciliation process.
He argued that argued that the CIOT should combine vigourous representations to the tax authorities on behalf of taxpayers with equally forceful challenges to exaggerations about the system’s failings.
‘We must draw attention to problems as they arise and push [HMRC] 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,’ said the institute’s president, who will be joined in his 12-month role by Stephen Coleclough as deputy president and Anne Fairpo as vice president.
I'm guessing but I think it's a few years since Patrick Stevens travelled on a (Clapham) omnibus.
Large companies and those companies doing business in the UK while paying very little tax don't ride on the Clapham omnibus either.
What matters to the man on the Clapham omnibus is how much tax the passenger in the next seat is evading and the chances of him and his fellow passengers being caught by HMRC.