DAVID CAMERON’S keynote speech at the World Economic Forum in Davos saw him address some of the biggest names in global business and put accountancy firmly in the spotlight. He called on his international counterparts to crack down on companies that were avoiding paying their fair share of tax and ensured the issue is at the top of the agenda for the UK’s presidency of the G8, kicking off in June.
The long-term avoidance issues of global companies such as Starbucks and Amazon, which have both hit the headlines of late, was not only a cause of immense embarrassment to the government, but also damaged the reputation of the accountancy profession by association. Yesterday’s commitment by Cameron to focus on tax and ensure all businesses pay their dues is a step towards repairing the public image of the profession – also essential in ensuring young people continue to enter the industry and join the ranks of practices up and down the country.
The ICAEW’s CEO Michael Izza remarked after the speech that the prime minister had again dismissed accountants as an “army of avoiders”, but I don’t think that was the intention. The blame for last year’s avoidance has been laid squarely at the door of multi-nationals, and the impact on the reputation of the accountancy profession has been an unintended, but not insignificant, consequence. Tackling the issue head on and explicitly prioritising the tightening of the tax system will – hopefully – draw a line under the whole affair and enable the profession to move on with a clean slate.
What is crucial to the success of David Cameron’s big idea, however, is the buy-in of accountants. It is only by working closely with accountants that any reform can be truly implemented. Izza went on to say that “an effective accountancy and finance profession can and does help solve many of the problems the prime minister wants to address”, and he’s absolutely right. As the relationship between business owner and accountant becomes ever closer, so must the relationship between accountants and government.
The detail on how the prime minister plans to turn his words into action is unlikely to surface for some time, but the prospect of a genuinely simplified tax code in the UK is good news for accountants and businesses everywhere.
The year may have only just begun, but with tax at the top of the government agenda and some of the most significant changes to regulation, such as Real-Time Information, fast approaching, it is shaping up to be a landmark year for the profession. The value with which accountants provide clients will truly come to the fore in 2013, and that is something I am looking forward to with anticipation and that the whole industry should be ready for.
Jim Scott is managing director of Sage Accountants Division
HMRC compliance crackdown targets SMEs, resulting in £468m for year ending 31 March 2016
The average cost of fraud increased 35.4% to £3.9m in 2016, compared to 2015 data
Report argues that the government must change the way it makes tax and budget decisions
Harrison Beale & Owen will (HB&O) have a new chairman and managing director at the helm for 2017