Time to debate the issues

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Accountancy Age has a good article called 'Guarding reputations: tax profession needs to clean up its act'. By seasoned journalist Sarah Perrin, it seeks to explore an issue.

I won't comment on much of what it says: there's enough of me in the original. What I am interested in is the comment by Bill Dodwell, head of the tax policy group at Deloitte, who described the TUC's 'Missing Billions' report as 'just rubbish'.

Given that I was interviewed by Sarah for this article, and presumably Bill was as well, and that my comments are fairly reflected I guess this is what he said. In that case I have to admit it's not a good reflection on him. Nor is his argument credible. It is true that, as he says:

Essentially the things it claims are tax avoidance are current tax policy of the government. These include companies claiming relief on plant and machinery, and the independent taxation of spouses, which enables legitimate income shifting.

But the report made a particular point: this is neither the common perception, nor is it clear that parliament intended these allowances to be used in this way.

If parliament had intended large companies to pay tax at lower rates than smaller companies, as now seems likely to be the case, then it is not clear why it would have created a rate differential between the two to achieve the opposite effect.

And if HM Revenue & Customs really believed that parliament intended independent taxation of spouses to legitimise income shifting I really do not think that the whole Arctic Systems issue would have been pursued as it was.

So, if tax avoidance is, albeit legitimately, subverting the will of parliament, then it is clear that the Missing Billions does draw attention to substantial tax avoidance. Rubbishing that seems like the action of a person who does not wish to engage in the debate in the hope that it will go away.

But this argument will not go away. It is abundantly clear that the tax system is being exploited at cost to the most vulnerable in society. By rubbishing this report Bill Dodwell seems to be saying that he'd rather ignore that fact, and would wish to perpetuate the exploitation. That cannot be to the benefit of his firm, or the tax profession, which he notes in the article needs to:

get involved in trying to explain their massively complicated world to the general public, to show people what tax is about

I can't see how he thinks that dismissing the alternative, and widely held view amongst the public, as 'just rubbish' is going to achieve that.

Of course, I may be wrong in my interpretation of what he says. I've never met him. I'm very willing to do so. In fact, I'm sending this blog to him to invite him to discuss the issue. Because I am as interested as him in having a well regarded tax profession, but don't think that possible unless the profession and firms accept their social duty, and that will mean we must improve the standard of debate and focus on the real issues. Otherwise the public will, rightly in my opinion, continue to hold the tax profession in low regard.