The Chartered Institute of Tax issued a press release this morning saying:
The Chartered Institute of Taxation (CIOT) is calling for a moratorium on further major changes to the tax system from the Chancellor, Alistair Darling, when he stands up to deliver his Budget on Wednesday 22 April.
The CIOT believes, that in these turbulent economic times, it is better to consolidate and complete what is in hand and not introduce new measures.
The Institute is concerned that new proposals, however well-intentioned, will inevitably add to administrative burdens on the taxpayer when business taxpayers in particular need to concentrate on business matters.
Nick Goulding, CIOT President, says: “At a time when business and individuals are facing very challenging financial circumstances, they need stability. Part of achieving that is to ensure there is certainty and that the Government works towards a simpler and fairer tax system. If the Government wants to help people by using the tax system, reform needs to be thought through very carefully. A less complex, and therefore simpler, system would be one way to make things easier for the taxpayer.”
The CIOT’s firm view is that when the Government looks at the tax system they should take into account three underlying principles: simplicity, fairness and certainty.
I’ve got two comments.
The first is that this is a straightforward plea that the injustice in the current tax system be allowed to continue. As a result, for example, the CIOT wants Barclays to be allowed to continue its tax abuse. And as a consequence they want the burden of tax to remain on the middle classes and poorest in our society when reform needs to shift it to those best able to pay.
Second, I sit on a Treasury committee with the CIOT. It’s amazing how complicated the CIOT want tax reform to be when in the interest of the richest clients they represent and how much they dislike the simple alternatives I propose.
I can say no more right now — but candidly the CIOT needs to walk the talk — and from my experience it is not.
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It is an unfortunate fact that the professional institutes in the world of tax and accountancy rather than offering an impartial view, which they should do as professionals, in fact seem to be the prisoners of their wealthiest clients, who can, quite frankly afford to pay for lobbyists. In a perfect world, the opinion of the CIOT would be worth something since they do know about tax. However, the fact is that they are merely advocates for a particular interest group, masquerading as impartial professionals and should thus be disregarded. This is particularly frustrating for those members who hold different political positions. They remind me of the more notorious trade unions in the 1970s who adopted aggressive political positions often at variance with their members! Ironic, really.
My area is pensions but it seems like you have the same process:
– The Government proposes a worthwhile reform that is relatively simple
– The vested interests propose special treatment for the rich and powerful
– The Government succumbs to the pressure and makes amendments
– The vested interests complain that it’s all too complicated
We regret that our call for a moratorium on changes to the detailed tax system has been misunderstood.
We issued our call to reflect the fact that the UK has the largest volume of tax statutes in the world; that this year another 1300 sections join the statute book in the form of the Corporation Tax Act 2009, with further changes planned for 2010; that the UK has seen the major initiative of the new HMRC powers, penalties and general approach to compliance introduced this year; that our tax appeals system changes radically from 1 April 2009.
These huge changes need to be understood by HMRC, taxpayers and tax advisers. Getting to grips with this will not be simple. Further, adapting to electronic tax compliance will also put great burdens on HMRC and taxpayers before the benefits are realised.
Our call is not meant to argue against particular targeted measures, which will no doubt continue to be introduced as the Government sees appropriate, just that all those involved need time to cope with what is already in hand.
Finally, we should add that the CIOT is an educational charity. It does not comment on tax rates, nor on the situations of particular taxpayers, individual or corporate. We engage in conversation with all political parties and organisations with the aim of making the tax system work better and through our Low Incomes Tax Reform Group are very active in seeking to improve the tax system as it impacts the less well off who cannot afford tax advisers. Our objectives are to ensure the tax system works and that it is as fair, simple and certain as possible.
Simon
I know we have spoken
And of course I respect your right to differ from my interpretation of what Nick said – and as Nick was once my boss we also know each other well.
But I’m sorry – I’m going to stick to my guns – I think your message does read – and was meant to tread as I read it.
The messages from the Big 4 right now are do not change the tax base (blow tax rates – they’re much less significant) so that their clients pay more tax.
And that’s what I think this message says as well
It’s the wrong message at the wrong time with the wrong political connotation for a charity, I suggest
Richard
I am a CIOT member who is concerned at the use of the term “moratorium” on changes to the tax system. Changes are required in this budget to put an end to an abuse of the tax system: this is only fair because high worth individuals and big business are not paying their fair share of tax, and tax havens play a big part. Small businesses require changes to simplify tax to reduce the burden of compliance and the amount of tax they pay. Small businesses pay effective rates of corporation tax higher than large companies, which is not the intention of the law and symptomatic of abuse and avoidance. I suggest now is the time for change to correct the inequality. Equality should be a higher priority for an educational charity such as the CIOT, than Nick’s press release conveys. The CIOT is siding with the big boys…..