IT’S FAIR TO SAY the BBC made very few friends in accountancy this week after broadcasting a Panorama programme criticising government policy on tax avoidance, casting accountancy as an insidious, underhand influence.
While in equal parts simplistic, cheesy and bizarre – the journalist Richard Bilton spent much of the programme scuttling about the countryside in an old mini, somehow trying to use the scenario as an analogy for the tax system – it did have serious ramifications. As a result of the investigation, Baker Tilly tax partner David Heaton resigned his post on the GAAR panel after being secretly filmed describing tax planning strategies two months prior to taking the role.
Be that as it may, it did little to further the tax debate, and largely served to fortify the stereotype that wealthy individuals and companies will stop at nothing to keep the “chancellor’s grubby mitts” off their money. In fairness, Heaton saying that – even in jest – doesn’t exactly help matters.
There was no real analysis or context provided – something that is admittedly difficult in a programme of just 30 minutes – and created an impression of us – the man on the street – and them – the corporations and a complicit government.
It is, of course, far more nuanced than that. Tax reliefs are not, as the programme suggests, government-sponsored avoidance schemes. They’re there to encourage particular behaviours, such as investment in infrastructure. Many of these man-on-the-street characters will work for some of the accused corporations, which contribute to their pension pots and other investments.
That is not to say it was not without its virtues: the brief interview with Hervé Falciani, who famously stole HSBC data on UK taxpayers holding accounts in Switzerland raised questions on whether the information was used to its full potential. Criticism of the Patent Box playing into large businesses’ hands was dealt with in a more balanced manner. Small businesses simply cannot afford to devote time and resources to patents, Panorama was told.
But in its response to the programme, the ICAEW reiterated that accountancy is under more scrutiny than ever, and members are under an imperative to maintain high ethical standards.
True, but perhaps the tax community ought to be given a greater voice – an opportunity to defend itself – in programmes such as this in the future. It can’t hurt, can it?
Calum Fuller is the tax correspondent for Accountancy Age and Financial Director
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