RegulationAccounting StandardsLeader: Profession must collaborate or risk its reputation

Leader: Profession must collaborate or risk its reputation

In the wake of more tax avoidance publicity, the profession must do a better job of extolling its virtues, says Accountancy Age

Leader: Profession must collaborate or risk its reputation

THE LATEST BLOG from Michael Izza castigating aggressive tax avoidance-peddling among the institute’s members was well-meaning, but has been criticised by respondents for, among other things, effectively calling on advisors to not provide their clients with accurate tax mitigation options.

Balancing that out were comments from Tax Advice Network chairman (and former tax faculty chair) Mark Lee in support of Izza’s theme.

Taking a binary position in tax matters, particularly for advisors, is contentious. “If it’s lega,l it’s fine – we owe a duty to provide clients with the best options to reduce their tax bill as possible,” say many of them.

Those that see grey in-between the black and white are more likely to encounter hand-wringing situations where they are stuck between a ‘duty of care’ in outlining all options, despite some possibly being risky or … unsavoury. Of course, the decision is up to the client.

As long as our tax system stays fundamentally as it is, there will always be providers of ‘exotic’ tax schemes that, while legal, will be viewed by many as beyond the pale.

For the ICAEW, I don’t see how it could haul its members over the coal for providing schemes such as Jimmy Carr’s K2. Who is the institute to decide where the legislative line is drawn? That doesn’t mean it has to support them, but I think the institute should be pragmatic on this one.

The matter is made more complex by what are often relatively benign tax decisions presented as ‘outrageous’ by the media and publicity-gobbling politicians.

So what’s the answer?

We know the profession does a damned good job at doing HMRC’s dirty work – and, in a more general sense, is the major crutch on which an ailing business community leans for technical and advisory support.

I think the institutes must collaborate much more closely, policy- and publicity-wise, in extolling the virtues of their members, and making it clearer that advisors do follow the tax rules – it’s just that sometimes the rules aren’t very well put together.

If we have an umbrella group of professional accounting bodies known as the CCAB, let’s use it rather than letting it be a glorified tea and coffee meeting for the institutes’ presidents and chief execs. It would be great to get the firms themselves working as one on this, but I fear that’s a step too far.

In fact, such an approach could easily transpose across audit and insolvency, where various interested groups give those two sections of the profession a good kicking on a regular basis.

At the moment, the profession appears too cynical, fragmented and reactive. Reputational damage is serious – just ask ex-Andersen staff.

It’s time to pull together, step out, and focus on the ‘good things’ the advisory profession does.

Kevin Reed is editor of Accountancy Age

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