THE RECENT CRITICISM of David Gauke’s pronouncements on morality and tax has shown how misunderstood tax and the tax profession are. This is not new. It is no surprise that people grapple with our tax system: it is complex, the code is long, and you need to be an expert to understand it.
There is no reason why people should misunderstand what a tax professional does. Of course, anyone can offer tax advice. That might be one reason why people are confused.
As a member of the CIoT and a tax professional, I have a vested interest in ensuring that people understand what tax advisors do.
The vast majority are small businesses serving small businesses and individuals. While they advise, their advice is to ensure that the taxpayer complies with the law.
The reason people need to make sure they comply is that the code is complex. Tax professionals mainly work in accountancy firms, in law firms and in companies. Some will deal with very complex financial and legal situations where tax plays a part in the company’s financial arrangements.
The arguments over evasion (which is illegal), ‘unacceptable avoidance’ and ‘acceptable tax planning’ has become confused, and led to indignation by many.
That indignation is justified when avoidance is based on aggressive complex schemes that lack any economic foundation. The constant “outing” of promoters and users of such schemes has led to the tax profession being seen as an industry that helps people pay less tax.
While that does happen, and sometimes because the government wants you or a company to pay less tax (by using reliefs or breaks), it is very far removed from what they do day after day for many in the tax profession.
It would not be an exaggeration to say that without tax advisors the UK would see a significant drop in revenue. This is not because people and businesses would all take the opportunity to evade tax.
It is because the tax system has become so complex that mistakes would be inevitable. HM Revenue & Customs would then have to spend a lot of time, and money, sorting the problems out. Tax advisors are part of the solution and should not be viewed as the problem.
Chris Jones, director of tax markets, Tolley
Making Tax Digital will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs
MHA MacIntyre Hudson has partnered with cloud accounting software provider Xero ahead of the government’s requirement for digital records
The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
Does Darwin's theory apply to taxation? Colin ponders...