If you could make one change to a tax law or practice what would it be?
Reverse the 2010/11 change to the self-assessment late filing penalty. The old penalty was capped at the tax due. We now have a situation where someone who is owed a refund but who is late with their return is exposed to penalties of £1,600 after a year. That is unfair, disproportionate and often counterproductive. The problem will go when we have a points-based system, but why wait?
What would you say is the greatest challenge facing the UK tax profession today?
Increasing complexity. We need, of course, to continue to press for simplification but I am not holding my breath. Tax law has to keep pace with increasing complexity in the commercial world, but two other factors are at work. Firstly, even if there is political will to simplify, there is little political time. Secondly, we have a system that has been creating ever-increasing amounts of new law for so long now that it has become routine. These factors will continue to generate more, not less legislation. I do not, however, despair. I believe that the answer (in part) lies in technology, especially artificial intelligence, to cope with increasing complexity. The challenge for both practitioners and HMRC is to create demand for and then embrace the necessary new technology.
If there’s one thing the government needs to get right on making tax digital, what would it be?
I am and always have been a fan of using digital technology for improving tax administration, but with one very simple proviso: it must benefit all stakeholders. We should be thinking about software that businesses want to use because it helps them to function more efficiently (and that generates the information HMRC needs as a byproduct). So, the thing that government has to get right is to ensure that businesses and agents – as well as HMRC – get what they need from new digital technology. All stakeholders should all be winners here and we can be if we get it right.
And HMRC digital projects generally?
HMRC has delivered massive digital change over the last two decades. Over 90% of self-assessment returns are now filed voluntarily – that is quite an achievement and proves that people don’t need to be forced to use good digital systems. I am disappointed that MTD for individuals has been slowed because I believe it holds huge potential for improving the way individual taxpayers deal with their tax affairs: pre-population has been working elsewhere in the world for two decades and it could be used far more extensively it in the UK to everyone’s benefit. And lessons do need to be learned when things go wrong: the Trust Registration Service is an example that needs to be learned from.
You are a fellow of both ICAEW and CIOT – which means more to you?
I am proud to be a fellow, and indeed Council member, of both bodies, and in my year as ICAEW president I want to see ICAEW and CIOT building on what is already a very close relationship.
A turning point in the last few years for the tax profession?
Stepping up to the mark with the revised PCRT. We faced criticism in the press and by politicians but also by wider society. Seven professional bodies worked together to react to that criticism and to adapt PCRT to address it. Now the audit profession faces criticism and I think we have a model for reacting to that as well: listen to the criticism, take time to fully understand it and then react where necessary to address it.
How do you see the relationship between HMRC and practitioners?
I have seen it go through good and bad patches. It is at its best when we work together in a spirit of genuine partnership to drive better tax administration - and by genuine partnership I mean that we are willing to listen to each other and to understand where we differ. The peak for me was during Mike Clasper’s chairmanship, when he recognized that there were serious problems with service delivery and instigated quarterly joint meetings to drive through improvements. They were genuinely collaborative. If we are now going to harness the power of digital we need to have that kind of spirit and I am confident that it is there to be had.
Finally, you might not know this about me but…
I’m an amateur mountaineer and once shook the hand of Sir Edmund Hillary. In my mind’s eye I can still see him raise that bear-like hand, the one that many years earlier had reached out to his Everest co-summiteer Tenzing Norgay. And the memory still sends a shiver down my spine.
If you could make one change to a tax law or practice what would it be?
Reverse the 2010/11 change to the self-assessment late filing penalty. The old penalty was capped at the tax due. We now have a situation where someone who is owed a refund but who is late with their return is exposed to penalties of £1,600 after a year. That is unfair, disproportionate and often counterproductive. The problem will go when we have a points-based system, but why wait?
What would you say is the greatest challenge facing the UK tax profession today?
Increasing complexity. We need, of course, to continue to press for simplification but I am not holding my breath. Tax law has to keep pace with increasing complexity in the commercial world, but two other factors are at work. Firstly, even if there is political will to simplify, there is little political time. Secondly, we have a system that has been creating ever-increasing amounts of new law for so long now that it has become routine. These factors will continue to generate more, not less legislation. I do not, however, despair. I believe that the answer (in part) lies in technology, especially artificial intelligence, to cope with increasing complexity. The challenge for both practitioners and HMRC is to create demand for and then embrace the necessary new technology.
If there’s one thing the government needs to get right on making tax digital, what would it be?
I am and always have been a fan of using digital technology for improving tax administration, but with one very simple proviso: it must benefit all stakeholders. We should be thinking about software that businesses want to use because it helps them to function more efficiently (and that generates the information HMRC needs as a byproduct). So, the thing that government has to get right is to ensure that businesses and agents – as well as HMRC – get what they need from new digital technology. All stakeholders should all be winners here and we can be if we get it right.
And HMRC digital projects generally?
HMRC has delivered massive digital change over the last two decades. Over 90% of self-assessment returns are now filed voluntarily – that is quite an achievement and proves that people don’t need to be forced to use good digital systems. I am disappointed that MTD for individuals has been slowed because I believe it holds huge potential for improving the way individual taxpayers deal with their tax affairs: pre-population has been working elsewhere in the world for two decades and it could be used far more extensively it in the UK to everyone’s benefit. And lessons do need to be learned when things go wrong: the Trust Registration Service is an example that needs to be learned from.
You are a fellow of both ICAEW and CIOT – which means more to you?
I am proud to be a fellow, and indeed Council member, of both bodies, and in my year as ICAEW president I want to see ICAEW and CIOT building on what is already a very close relationship.
A turning point in the last few years for the tax profession?
Stepping up to the mark with the revised PCRT. We faced criticism in the press and by politicians but also by wider society. Seven professional bodies worked together to react to that criticism and to adapt PCRT to address it. Now the audit profession faces criticism and I think we have a model for reacting to that as well: listen to the criticism, take time to fully understand it and then react where necessary to address it.
How do you see the relationship between HMRC and practitioners?
I have seen it go through good and bad patches. It is at its best when we work together in a spirit of genuine partnership to drive better tax administration - and by genuine partnership I mean that we are willing to listen to each other and to understand where we differ. The peak for me was during Mike Clasper’s chairmanship, when he recognized that there were serious problems with service delivery and instigated quarterly joint meetings to drive through improvements. They were genuinely collaborative. If we are now going to harness the power of digital we need to have that kind of spirit and I am confident that it is there to be had.
Finally, you might not know this about me but…
I’m an amateur mountaineer and once shook the hand of Sir Edmund Hillary. In my mind’s eye I can still see him raise that bear-like hand, the one that many years earlier had reached out to his Everest co-summiteer Tenzing Norgay. And the memory still sends a shiver down my spine.
