LETTERS

The future of CIPFA

The fate of CIPFA mirrors that of public-sector organisations generally: they wither and die when they lose their legitimacy in the eyes of their stakeholders.

And so Chris Wheal was right – though somewhat premature – in his unsympathetic obituary of a body that finds itself exposed on all sides to the inexorable forces of the market (News Analysis, 7 August).

As public money increasingly finds itself obliged to make a return, CIPFA cannot possibly hope to compete with the other accountancy bodies whose members are so much better geared to working for profit. What’s more, if CIPFA does try to compete, then it will lose its distinctive character, and would be lucky to find itself the public-sector division of the AAT.

The forces of change are even-handed, however, for the private sector is going through a severe crisis of its own at the moment. CIPFA can exploit this.

The recent National Lottery debacle regarding ‘excessive’ remuneration is symptomatic of the private sector’s sudden shamefaced attitude to profit.

Everywhere, in an effort to dispel the so-called ‘fat cat’ image, profit-making organisations are beginning to emulate the public sector.

They now feel it necessary to hide the fact that they are out to make money and are beginning to engage in more esoteric issues that can be covered by the ‘caring capitalism’ rubric. This may be CIPFA’s lifeline, since only its members carry the value-laden tools of judgement needed to remake the public image of private companies. CIPFA is dead! Long live CIPFA?

Gareth Griffiths, Nottingham

Detecting resentment

Taking Stock (14 August) was a bit harsh on CIPFA. Do I detect oppressed sympathy with the ‘no hopers’ of CIPFA from the aspiring Nigel Dempsters of Accountancy Age who never quite made it?

Gareth Jones, Wembley, Middlesex

Backing sole practitioners

I agree with the concerns of Michael Cox on self assessment (Letters, 7 August).

The additional burden that has been put on sole-practitioners by the new regime is totally unacceptable.

If professional bodies are aware of the pressures sole practitioners are now under, then they appear to be doing nothing to convince the Inland Revenue of our concerns.

The money spent by the Revenue on the mass advertising campaign has fallen on deaf ears. The vast majority of the public are no clearer on the rules of self-assessment now than they were nine months ago.

Even tax inspectors and other Revenue staff do not know how accountants are going to be able to complete all formalities by the 31 January 1998 deadline. They themselves are still trying to come to terms with their computer systems and other aspects of self-assessment.

Is it not therefore time for professional bodies to act on behalf of the profession they represent and do whatever is in their power to reduce the burdens placed on practitioners? A moratorium on penalties or putting back the 31 January deadline would be a much welcome start to this process.

SD Reece, Warrington

History of tax avoidance law

The UK has had its own catch-all anti-avoidance tax legislation (News, 14 August).

Section 32 of the 1951 Finance Act stated: ‘Where the commissioners are of the opinion that the main purpose or one of the main purposes for which any transaction was or were effected was the avoidance or reduction of liability to the profits tax, they may, if they think fit, direct that such adjustments shall be made as respects liability to the profits tax which would otherwise be effected by the transaction or transactions.’

Profits tax was an additional levy to income tax on company profits. It was based on profits drawn up under income tax principles adjusted by its own rules. It was charged at 15% while income tax was 40%. The law was repealed in 1965 when profits tax was subsumed into corporation tax.

Subsection six of section 32 gave a clearance procedure before the commissioners, and under subsection seven appeals were heard before the special commissioners.

Reports of hearings before either sets of commissioners were not made public, but no appeals (by the Revenue or a taxpayer) were taken to the High Court.

Section 32 remained in force for 14 years without modification. One does not know why this general anti-avoidance legislation was not extended to income tax, or adopted into the corporation tax legislation.

Paul Donert, Cambridge

Harsh on Hampel

As usual, Austin Mitchell’s article (View from the House, 14 August) is long on rhetoric, but devoid of substance.

He has not taken account of the Hampel committee’s terms of reference.

Since when was it an objective of the Hampel committee to remedy ‘all the problems afflicting UK companies’?

Mr Mitchell’s particular gripe seems to be that his views were ‘heard with impatient disbelief’. If he bothered to give the committee the benefit of his expertise, he should not have been surprised, based on the content of his column, at such a response. Even his parting aside – ‘back to your port and cigars, Sir Ronnie’ – is inaccurate: Sir Ronnie is both teetotal and a non-smoker.

James Taylor, Letchworth

Medium-sized firms thrive

Can it be the heat? Is it an outbreak of midsummer madness? I find it hard to think of any other explanation for Phil Shohet’s extraordinary outburst in your front-page story on the possible merger between Baker Tilly and Casson Beckman (14 August).

I cannot imagine which accountancy practices he has in mind when he speaks of cash-strapped medium-sized firms unable ‘to satisfy their own internal needs and those of their client base’. Nor do I know who he is thinking of when he says that the Baker Tilly/ Casson Beckman talks could spark a ‘frenzy’ of mergers.

My own medium-sized firm has been growing strongly both in numbers and range of services, and continues to provide its clients with the support they need. Far from being moribund, some of the most vibrant and innovative practices in the country are in the medium-sized category.

Maybe Phil Shohet should talk to a few before he next pronounces on the subject.

Paul Beer, HW Fisher, London

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