THE GOVERNMENT, along with a great many other organisations, is incredibly keen to continue hurtling towards ‘technology by default’ in as many aspects as possible.
The introduction of e-tax returns, real-time PAYE and Universal Credit have all been ushered in by all HM Revenue & Customs in recent years, while most accountancy firms will use the cloud to manage their clients’ affairs.
But newly-inaugurated CIoT president Anne Fairpo is keen to temper that rush into all things technological.
It’s perhaps a surprising stance for a self-confessed ‘geek’, but Fairpo is sanguine and measured in her assessment.
“I routinely carry more computing power than NASA had until the early 2000s,” she quips. “Anyone who knows me knows I like gadgets, but I have some concerns the government is trying to get HMRC to run before it can walk in the case of technology. That can mean people get left behind and it becomes more difficult for those who want to comply, and easier for those who don’t want to comply.”
Particularly, it’s the use of things such as data to determine risk, which is open to scrutiny from Fairpo. The potential to introduce errors, or to pursue spurious correlations, is something that can be fuelled by the increasing use of technology and something not always recognised.
“It’s not that I don’t think it’s something the government should be using,” she adds. “It’s just I think they should be aware of its limitations. They can get overexcited about it.”
A barrister at 13 Old Square Chambers and Atlas Chambers, Fairpo has spent much of her career focusing on taxation of intellectual property, international tax issues and employment tax advice.
Also a lecturer for King’s College London, Fairpo is well-placed to address the other major theme of her presidency: education.
In particular, Fairpo is keen to foster stronger links between the institute and the academic study of tax. As such, she has struck up partnership with the University of Exeter – which has a specific tax research centre – in order to provide somewhere for academics to be regularly published.
“As a country, I don’t think we pay enough attention to academic study at a higher level,” Fairpo explains. “In contrast, on the continent, a lot of tax advisers have higher degrees, masters’ degrees or even doctorates and quite a lot more study or teach at their local universities and it’s something perfectly normal and straightforward.”
A move to that culture, Fairpo says, would be particularly pertinent at the moment with so much focus on the tax climate and the affairs of large business and the wealthy. And while there is some credence to the grievances many hold over tax avoidance and evasion, Fairpo believes a lack of tax experience and knowledge is holding many back from engaging with the tax debate – and the wider regime – on a meaningful level.
“I wonder whether part of the problem is that the average individual doesn’t have to engage with tax particularly closely,” muses Fairpo. “It comes out of your pay before it gets to you. If you can get interest in a bank account, it comes out of the interest. If you happen to have shares in a company, the chances are the dividends come with a relief that covers off the tax bill, and VAT is automatically included in the prices you pay in shops. So you never really see and engage with tax, and I think that creates a disconnect.”
As a result, many are left angry and ill-informed by the coverage of scandals surrounding Jimmy Carr, Garry Barlow, Google, Amazon and Starbucks, and others.
“It would interesting to see how it compares to somewhere such as the US, where everybody has to fill in a tax return every year,” Fairpo notes. “Things like sales taxes are not actually included in the prices you see in the stores. You’re much more aware of it as a concept.”
“There is a gap between public perception and reality, and what gets in the press is not necessarily reasoned analysis and that creates its own problems,” she adds.
To that end, Fairpo is looking to see the CIoT’s wider educational and commentary role increase, and in particular she is keen the wider context of tax is taken into account by both the profession and society at large.
“It’s always difficult to discuss incentives, for example, because there isn’t enough information put out about the benefits. We may get companies coming here interested in the Patent Box, which means a chunk of their profits get taxed at half the normal corporate tax rate. How many jobs has that created?”
Indeed, Fairpo is keen it’s not just in the context of all the income tax and national insurance from those jobs, but real employment which might not have otherwise been available.
“They’re paying for services, paying rent or buying property,” she says. “There’s a massive knock-on effect to getting a large investment into the UK. I think a lot of that gets overlooked. It swings back round to academic study and economics – understanding the collateral benefits of having an attractive tax system.”
Anne Fairpo’s CV
2009 to present – Barrister, Thirteen Old Square Chambers and Atlas Tax Chambers
2008-2009 – Director, Wragge & Co
2005-2008 – Director, Rawlinson & Hunter
2002-2005 – Consultant tax lawyer
2000-2002 – Senior manager, KPMG
HMRC has outlined a change in VAT policy to the treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings
Let us hope that valuable asset protection vehicles are not made prohibitively burdensome or abolished in the desire to “simplify” IHT
Smith & Williamson has named Grant Hotson as group finance director
Freelancers and micro-businesses still need more information about the government’s plans to make tax digital