The tax profession has to do better than name call if it’s going to be anything close to credible

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It's quite hard to think of a calm and appropriate response to an editorial comment in Taxation magazine this week in which editor Mike Truman awarded Margaret Hodge MP the title of Tax Prat of the Year.

One, I think, quite fair response is to hope Mike (who is a Methodist lay preacher on the side, and who I should note I have known for many years) has some feelings of remorse for being quite so rude.

I would also rather hope that he now feels he's been faintly ridiculous: awarding anything for 2013 when January is just out does show a remarkable lack of judgement.

And that, I think, to continue the calm approach  is what the whole tenor of Mike's piece. Two themes emerge from it. First there is total distaste for anything Private Eye and the Guardian may say: deep political bias is at the core of this piece. Second there is naive dismissal of the argument that there could be any problem with large firms seconding staff to HM Treasury and H M Revenue & Customs to work on tax policy, with those so seconded then returning to their firms to sell the resulting legislation as a tax planning opportunity (as Hodge evidenced happening). Truman said:

[T]he part of the session which really incensed me was when she attacked the work done on technical committees and working groups by tax professionals from private practice, and in particular the work done by staff who are seconded from their firms to HMRC and HM Treasury (HMT).

Well, with the greatest of respect to Mike Truman, he's wrong. Not just wrong, but very wrong.

The reality (and I know it from experience) is that working with the Treasury means no pay if serving on a committee and, as Truman acknowledges, low pay if seconded. It costs, a lot, to do this work. And the reality is that except for very large business and the biggest firms of accountants that cost is hard to bear. I am thankfully supported by grant funding from third parties when I do it, but that is exceptional. So the truth is that the arrangements in place mean there is an inherent and complete bias that has nothiong to do with the competence, experience or the relevance of those seconded and has everything to do with economic power. That is what Hodge is objecting to: she's saying inherent privileged access for an elite (for that is what big business and the Big 4 are) biases the advice given to HMT and the result is inappropriate tax policy that can harm the UK economy.

I remember that being very clearly evidenced when work needed to be done on small business accounting and tax returns and the Big 4 provided the expertise. That was absurd. They simply do not see this issue the way smaller practitioners do, who could have added considerably more value. But they weren't asked, and nor was their opinion requested on a paid for basis. As a result they could not have afforded to help. The result was some fairly absurd suggestions, far removed from economic reality,  as I recall. I don't know that was the Big 4's fault, but it did not reflect the common sense the best small practitioners can provide, or the holistic view they have to offer.

Truman ignores this. I suspect he has alienated a great many of his readers in the process. Yes, Margaret Hodge is robust. And I suspect for many in the Big 4 and some elsewhere this is shocking: they're not used to people standing up to them. Elites aren't. But she was seeking to speak truth to power and has done a valuable service to this nation in doing so. Mike Truman on the other hand has done a considerable disservice to his profession, his publication and his own reputation by being closed minded as to the issue and resorting to name calling instead.

Although given that the process of change is always one where the demand is first ignored, then violently rejected and then accepted as self-evidently right at least Truman has  done us the favour of telling us we're now in phase 2. That's the best I can say for his diatribe.

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