Tax advisers do not act just for the wealthy and most of their efforts are directed to helping ordinary deal with a ‘hugely complex and bewildering system’, the President of the Chartered Institute of Taxation said in a speech to CIOT members at the weekend.
Anthony Thomas told the CIOT’s Cambridge conference that much media and political comment about the tax profession was ‘ill-informed, ill-conceived, ill-thought out, and often deliberately misleading’.
‘Comments such as “there are few more worthless specimens of humanity than tax accountants and tax lawyers” or statements which deliberately confuse tax evasion with tax avoidance do nothing to improve understanding of the way in which our tax system functions,’ he said.
‘In an ever growing complex tax and business world most tax advisers do an excellent job. There are very, very few who discredit the profession either by illegal activity or practising at the margin: I suspect that it is roughly the same number as rogue Revenue officials,’ he added. ‘To suggest otherwise is misleading and mischievous.’
The CIOT would work closely with HMRC on shaping the proposed GAAR in accordance with Parliament’s intention. ‘This is not going to be easy and the road ahead will be difficult,’ Thomas warned. ‘I fear that the public may soon discover that a GAAR is not the silver bullet which will eradicate all forms of tax avoidance.’
The ‘specimens’ comment was made by Peter Oborne, chief political commentator at The Daily Telegraph and a fierce critic of tax avoidance, on the day of the recent Budget.
‘The clampdown on stamp duty avoidance and other methods of tax-dodging by the very rich is excellent,’ Oborne wrote. ‘There are few more worthless specimens of humanity than tax accountants and tax lawyers, and if some of them are put out of business by these measures, so much the better. More likely they will be kept more busy than ever.’
Graham Aaronson’s recent report on the merits of a general anti-avoidance rule paints a very different picture. Aaronson told HM Treasury that in discussions with ten representative bodies – including the CIOT and tax specialists at the ICAEW and the Law Society – several concerns were raised regarding the practical effect of a general anti-avoidance rule.
But there was ‘unanimous disapproval, indeed distaste, for egregious tax avoidance schemes’.
Aaronson said: ‘There was consensus in the view that purposive interpretation, even coupled with DOTAS [the disclosure of tax avoidance schemes regime], would fail to deal with carefully contrived schemes that rely on the application of prescriptive rules where no underlying principle can be discerned in the rules as set out in the statute.
‘It was a widely, and strongly, held view that highly aggressive schemes of that type made for an un-level playing field. It put tax professionals, whether advisers or company tax managers, in the invidious position of having to decide whether they should try to reduce the tax bill by using such schemes, given that on the present law the schemes would almost certainly produce that result, even though they personally regarded the schemes with distaste. The obvious dilemma lies in the fact that their competitors might set aside such scruples and gain a commercial advantage by recommending or adopting the scheme.’
Critics say that the ‘anti-abuse’ rule recommended by Aaronson will be too narrow. The Association of Revenue and Customs, representing senior HMRC staff, has warned that it may ‘widen perceptions of what is responsible tax planning and so make it harder to tackle avoidance’.
Tax advisers do not act just for the wealthy and most of their efforts are directed to helping ordinary deal with a ‘hugely complex and bewildering system’, the President of the Chartered Institute of Taxation said in a speech to CIOT members at the weekend.
Anthony Thomas told the CIOT’s Cambridge conference that much media and political comment about the tax profession was ‘ill-informed, ill-conceived, ill-thought out, and often deliberately misleading’.
‘Comments such as “there are few more worthless specimens of humanity than tax accountants and tax lawyers” or statements which deliberately confuse tax evasion with tax avoidance do nothing to improve understanding of the way in which our tax system functions,’ he said.
‘In an ever growing complex tax and business world most tax advisers do an excellent job. There are very, very few who discredit the profession either by illegal activity or practising at the margin: I suspect that it is roughly the same number as rogue Revenue officials,’ he added. ‘To suggest otherwise is misleading and mischievous.’
The CIOT would work closely with HMRC on shaping the proposed GAAR in accordance with Parliament’s intention. ‘This is not going to be easy and the road ahead will be difficult,’ Thomas warned. ‘I fear that the public may soon discover that a GAAR is not the silver bullet which will eradicate all forms of tax avoidance.’
The ‘specimens’ comment was made by Peter Oborne, chief political commentator at The Daily Telegraph and a fierce critic of tax avoidance, on the day of the recent Budget.
‘The clampdown on stamp duty avoidance and other methods of tax-dodging by the very rich is excellent,’ Oborne wrote. ‘There are few more worthless specimens of humanity than tax accountants and tax lawyers, and if some of them are put out of business by these measures, so much the better. More likely they will be kept more busy than ever.’
Graham Aaronson’s recent report on the merits of a general anti-avoidance rule paints a very different picture. Aaronson told HM Treasury that in discussions with ten representative bodies – including the CIOT and tax specialists at the ICAEW and the Law Society – several concerns were raised regarding the practical effect of a general anti-avoidance rule.
But there was ‘unanimous disapproval, indeed distaste, for egregious tax avoidance schemes’.
Aaronson said: ‘There was consensus in the view that purposive interpretation, even coupled with DOTAS [the disclosure of tax avoidance schemes regime], would fail to deal with carefully contrived schemes that rely on the application of prescriptive rules where no underlying principle can be discerned in the rules as set out in the statute.
‘It was a widely, and strongly, held view that highly aggressive schemes of that type made for an un-level playing field. It put tax professionals, whether advisers or company tax managers, in the invidious position of having to decide whether they should try to reduce the tax bill by using such schemes, given that on the present law the schemes would almost certainly produce that result, even though they personally regarded the schemes with distaste. The obvious dilemma lies in the fact that their competitors might set aside such scruples and gain a commercial advantage by recommending or adopting the scheme.’
Critics say that the ‘anti-abuse’ rule recommended by Aaronson will be too narrow. The Association of Revenue and Customs, representing senior HMRC staff, has warned that it may ‘widen perceptions of what is responsible tax planning and so make it harder to tackle avoidance’.
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