Another senior figure from the UK’s accounting hierarchy has rushed forward to defend tax havens whilst seeking to neuter all at attempts to end tax abuse. This time it is Frank Haskew who heads the Tax Faculty of the Institute of Chartered Accountants in England and Wales.
Accountancy magazine reports, based on his comments, that the cost of filtering through information obtained in the proposed global crackdown on tax havens may outweigh the revenue raised. He told them:
[T]he core demand will be for all offshore centres to release the names of individuals with accounts in their territories, enabling tax authorities in other countries to track down those who are not disclosing all they should in their home country.
The exchange of information might be right, but there must be a balance, focusing on risk areas, rather than shed loads of returns. There’s so much data they don’t know what to do with it. How will HMRC deal with it?
We should be more focused and targeted on high-risk people. There’s so much information from businesses, it would take them forever to go through it.
Let me be quite categorical. There is only one reason for making such an observation, and that is that you want the abuse to continue. There is no other explanation because what is said is so glaringly wrong:
- How will HMRC deal with this data? Simple: take back on some of the 25,000 staff who have recently been dismissed. The trained people are ready and available to do the work. Why did Frank Haskew ignore that possibility?
- The suggestion that there are ‘shed loads of returns’ to process is deliberate misinformation. You would think that information exchange was done through the sending of a pile of cardboard files. It isn’t: this is electronic data. It is a list that includes a taxpayer's reference number (if known), their name, residential address, details of the bank at which an account is held and account number information and details of the income paid to new account during the course of a tax year. Processing it is about as difficult as sorting a pile of data on an Excel spreadsheet. Once sorted the opportunity to raise innumerable requests under Tax Information Exchange Agreements would exist on those cases of greatest concern — which would then have been identified as being the ones of highest risk. Don’t doubt it: this is when TIEAs would work — which is why people like Frank Haskew are so keen that automatic information exchange does not take place.
- Suggesting that the amount of information is insurmountable is absolutely ludicrous. As Frank Haskew knows, every bank in the UK sends information on every customer to whom they pay interest in this country to HM Revenue and Customs every year. That is tens of millions of items of data. It is a apparent that HM Revenue and Customs can handle that data.
- It is also very apparent that the awareness that the data will be sent massively increases the compliance rate of those who must declare their tax liabilities resulting from those payment of interest. We know that HM Revenue and Customs identified no more than 200,000 accounts of interest to them in the 2007 tax amnesty. To suggest that HM Revenue and Customs can manage tens of millions of items of data but that another 200,000 would overload the system is obviously absurd. To ignore the deterrent effect that automatic information exchange from tax havens would have in raising revenue, as Haskew deliberately does, is to turn a blind eye to the tax evasion that takes place in tax havens; evasion that I have shown costs the UK at least £4 billion a year.
It is so easy to show how absurd Frank Haskew’s arguments are that one has to come to an alternative conclusion as to his motivation, and that of his employer, the Institute of Chartered Accountants in England and Wales. It seems to me that they are turning a blind eye to tax evasion.
What a sad thing to say about the accounting profession.
What a sad thing for me to have to say about my own professional institute.
But I believe it is true.
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Sorry Richard – on this one I have to disagree with you.
Frank is no more pro tax evasion than you or I. And nether is ICAEW. By drawing such conclusions from the reported comments made in response to a journalist’s enquiry I think you risk undermining your own credibility. And that would be a shame.
Sorry Mark, but that’s not good enough.
Explain how his comments can be construed otherwise.
I believe he and the ICAEW (and organisation riddled by those with vested interest in maintaining tax haven abuse in which tax evasion is implicitly a part) are seeking to undermine the attack on tax evasion.
You don’t explain why you differ from me.
Saying, by implication, that you think Frank’s a good chap is not enough. If he puts obstacles in the way of tackling tax evasion he is for it – end of story.
And I assure you the only people with whom I might lose credibility by saying this are accountants – and the world at large knows they and their professional bodies are part of the problem, not part of the solution.
So please argue your case – assertion does not work on an issue such as this.
Richard
Richard
I should know better than to publicly disagree with you Richard.:wink:
I don’t know the context of the interview or the full extent of Frank’s statements to the journalist. All I have are the words the journalist has reported. They may be verbatim, they may not be. They may be complete or they may be out of context to help fill the space and to facilitate a catchy headline. They have been forced out of Frank in response to clever questions. he may have been allowed time to clarify or he may not.
I tend to agree that some accountants are the real problem. 😥 Others dislike being implicitly associated with such accusations. I assure you, no, I simply believe, that you would improve your chances of securing workable solutions (and any consequential changes within the profession) if you stick to the facts rather than offer invective by reference to reported quotes such as the one in question.
You draw one conclusion based on the quoted words. I draw another based on my personal knowledge of the interviewee. I’ve sat in countless tax technical meetings with Frank at the ICAEW. I know him. That’s all I’m saying.
Mark
That’s pathetic.
The journalist was working for the ICAEW’s own house journal. Do you honestly believe that the journalist was in the circumstance trying to do anything but show off the ICAEW spokesperson in best light? To imply they might have been ‘forcing’ Frank into a position is ludicrous. You should be ashamed of offering such lame excuses.
And I note you do not try to address the issues.
I’ll add you to the list of apologists in that case. I have no other choice.
You add convincing evidence that the profession, and those who seek to speak for it, are major obstacles to progress in tackling tax evasion. After all, did you when chair of the ICAEW tax faculty ever once name and shame tax haven operators? If not, my case stands and you are a part of this problem, not part of the solution.
Richard
All that is necessary for the triumph of evil is that good men do nothing.
This is probably the most quoted statement attributed to Burke, and an extraordinary number of variants of it exist, but all without any definite original source. These very extensively used “quotations” may be based on a paraphrase of some of Burke’s ideas, but he is not known to have ever declared them in such a manner in any of his writings. It may have been adapted from these lines of Burke’s in his Thoughts on the Cause of Present Discontents (1770):
When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle.
http://en.wikiquote.org/wiki/Edmund_Burke
Think about it Mark. Which side are you on? It’s a choice. Not an each way bet.
I’m sorry you’re having a bad day Richard.
Accountancy is a CCH publication. It’s not an ICAEW in-house publication. ICAEW only have editorial control over a small number of pages which are clearly shown as such. I doubt that’s where Franks’ comments appear. (For the avoidance of doubt, yes ICAEW did contract with CCH for the magazine to be provided FOC to all members of ICAEW. But it’s a heck of a leap to imply because of that that ICAEW has any form of editorial control over the bulk of the contents).
You say you have no other choice than to add me to your list of apologists because I have defended Frank whom I know is not in favour of tax havens and who I know did not rush forward to defend them, despite your unfounded accusation above.
Richard, you always have a choice. I’m disappointed in the one you’ve made above. You and I have had enough conversations for you to know me better than the picture you attempt to paint above. Indeed on 22nd December you stated on your blog: “Mark Lee is a man for whom I have a lot of respect and time, both professionally and just because he seems to me a very decent human being.”
Mark
You are pushing credibility – and you must know it. A journal officially endorsed by the ICAEW and sent to all its members is not a house journal? That’s about as good a fantasy as arguing that a Jersey trust with reservation of powers is not under the control of the settlor.
Yes, I have made a choice. A choice based on what I am quite sure Frank said (OK, I have the advantage of the journalist repeating it to me when asking for my quote – and I believe he was quoting correctly).
You’re disappointed with my choice. That’s your right. We’re disappointed in each other today. But at least I’ve presented a robust argument about why Frank is wrong and should change his mind.
Why not engage with the argument instead of making personal comments? Wouldn’t that be more useful? Prove to me why Frank is right, or wrong. Don’t just tell me I’m having a bad day. That’s irrelevant. And does nothing for your credibility on this one.
If you win the argument – of course I withdraw and admit I’m wrong. But don’t just seek to browbeat me. That will not work. Why should it?
Richard
Richard
I think it’s quite clear which side I’m on and I have made this clear publicly. Do you remember by lead Comment article in Taxation magazine last July? I explained in great detail ‘Why I gave up giving tax advice’. http://www.taxadvicenetwork.co.uk/why.
I noted that I was not comfortable with the idea of helping the wealthy to pay less tax. This was clear from the way that my advice focused on all the risks and disadvantages of getting involved in tax schemes. In effect I was talking people out of such involvement. I realised that I could not continue as a tax adviser in such circumstances. I cited other related reasons too.
You are also well aware that I decided NOT to permit the promoters of structured tax avoidance schemes to join my Tax Advice Network when I subsequently decided that this was a way that I could remain involved in the profession but without having to start giving tax advice again. This stance has had financial implications for me but I’m comfortable with where I am.
Mark
Agreed – your behaviour suggests I’m wrong on you being an apologist for tax evasion.
OK, I accept that.
But I wish you’d engage on the issues noted then. Put it another way – do you want automatic information exchange? Yes or no? And why?
Richard
“But don’t just seek to browbeat me. That will not work. Why should it?”
Burnt kitchen utensils come to mind.
Facts are facts. You may doubt the veracity of my statements about Accountancy magazine but that doesn’t change the facts. Do you have any evidence for your assertion that Accountancy is an ICAEW in-house mag? Please don’t just seek to browbeat me on this. That will not work. Why should it? 😉
Apology accepted.
Now about this “automatic information exchange”. I think I can guess what you mean by this term and so give you a simple ‘yes’ I’m in favour. That’s my instinctive reply. Of course I should do some research first and check that it means what I think it means. But I’ve been sidetracked enough this afternoon and am signing off now.
Mark
I didn’t need to pick up the latest copy of Accountancy to notice the link with the ICAEW
Their logo is on the front every month.
Coincidence? I don’t think so
Richard
P1 – small print: “It is editorially independent, except that it carries material that the ICAEW wishes to communicate to members in the ICAEW section” This is then repeated under the heading “Accountancy Editorial Policy” at the foot of p2.
Editor appointed by CCH. All staff employed by CCH. Publsihed by Wolters Kluer (UK) Limited. CCH is part of Wolters Kluer which is an enormous independent publisher.
Facts Richard.
Mark
P1 – small print: “It is editorially independent, except that it carries material that the ICAEW wishes to communicate to members in the ICAEW section” This is then repeated under the heading “Accountancy Editorial Policy” at the foot of p2.
Editor appointed by CCH. All staff employed by CCH. Publsihed by Wolters Kluer (UK) Limited. CCH is part of Wolters Kluer which is an enormous independent publisher.
And I can also tell you that this independence is apparent in practice too.
Facts Richard.
Mark
Mark
Structure v Form Mark
Your argument is as convincing as KPMG et al claiming they are one firm for some purposes but never for legal liability
So the ICAEW has outsourced production? So what. It’s the ICAEW journal – the world thinks it, the ICAEW wants the world to think it, the small print says otherwise.
You win the technicality – but anyone would see that is the consequence of a ruse
I’m happy I’m entirely right and the man on the Clapham Omnibus would agree
Richard
Let’s also be honest Mark – if that’s the level of argument required to win it’s like resorting to an offshore structure…..
😆
R
I was simply challenging the accuracy of your statement that “The journalist was working for the ICAEW’s own house journal. Do you honestly believe that the journalist was in the circumstance trying to do anything but show off the ICAEW spokesperson in best light?”
And I think my point is also strengthened by the fact that Frank’s quotes didn’t show him in the best light; and that the journalist in question also had free reign to obtain your quote in the same article.
Please do not imply or accuse me of such activities Richard; with or without a smile. You know me better than that.
It would seem to me that Frank is simply a realist, not an idealist. Basic economics, resources are limited. HMRC and the UK government are not immune to such rules.
Mark
I think you have quite successfully lead this discussion of track.
Accountancy is the outsourced in-house journal of the ICAEW which it endorses with its logo on the cover and by providing a significant amount of editorial content. To argue that it would have given Frank a hard time was, I think, wholly unrealistic and a side show.
Let’s get back to the issues. They are:
a) Automatic informatiion exchnage works – the EU STD has paved the way
b) Automatic information exchange massively increases compliance (US surveys show compliance rates increase from 50% or so to 90% +)
c) HMRC can afford to do this – the tax raised would more than cover the costs, which need not be great
d) Without automtaic information exchnage TIEAs don’t work.
In that case 1) automatic information exchange will cost effectively increase the tax yield and 2) tax evasion will be reduced as a result.
This is fact.
So do you approve or oppose automatic information exchange?
And why do you think Frank opposes on behalf of the ICAEW?
I think those are fair questions which need answers. If fair answers can be given that show alternative cause for Frank’s opinion he is not turning a blind eye to tax evasion, as I suggest. I’d be wrong.
But shall we stick to that point?
Richard
For the second time I agree with your assessment of the value of automatic information exchange. I’m in favour of it.
And I doubt that Frank opposes it despite your interpretation of his reported comments to a journalist.
We’ll just have to agree to differ on this one Richard. But the last word will of course go to you as it’s your blog.
Richard
I take it you will not be renewing your ICAEW membership? Why remain associated with an organisation you seem to believe supports tax evasion?
Paul
Paul
Of course not
More chance of effecting change from inside
Richard