A near full auditorium was treated to an unusual CTA address. The calling of a snap general election meant that ‘purdah’ rules prevented former Tax Director of OTS John Whiting CBE – who remains a non-exec director of HMRC - from giving his planned speech on tax simplification. Instead, this year’s event was a panel discussion on topical tax matters. The panel was made up of Stella Amiss, of PWC, Paul Aplin, of ICAEW, Vanessa Houlder, of the Financial Times, Jill Rutter, Institute of Government and the CIOT’s Tax Policy Director John Cullinane. An audio of the event is below,
New CIOT President John Preston chaired the panel. He opened the event by encouraging attendees to volunteer for tax charities such as Bridge the Gap, in order to make a difference to low income people who face unexpected financial stress because of the tax system.
On the topic of Making Tax Digital (MTD), Aplin, Vice President of ICAEW, said market forces are leading to a change in how taxes are collected and that MTD is just a ‘catalyst’. However, he said that the ‘payback’ period predicted by HMRC is ‘way out’. Houlder predicted that politicians will not make a big deal of MTD during the general election given the many high-profile policies that will need to be promoted by parties in this short campaign period. Rutter said improvements to how Customs are managed should take priority over MTD because of Brexit. Cullinane added that it is the mandation and timescale of MTD which is causing the rancour.
From the audience, Lord Turnbull, the former Cabinet Secretary, now on the House of Lords Economic Affairs Committee, said peers were ‘aghast’ at how MTD was ‘not adequately prepared’ for a public rollout. Anthony Thomas, the outgoing LITRG Chair, suggested that there will be a backlash against the Government if MTD does not work.
When asked by Preston what should happen to the many clauses left out of the shrunken Finance Bill at the last minute, Amiss said ‘we are kidding ourselves’ if we think many of them will be dropped for long. She added that ‘Brexit is a great opportunity to simplify the tax system’. Rutter said the move to a single fiscal event should avoid ‘Budget hyperactivity’ that can lead to ‘rabbits’ being pulled out of hats by Chancellors. Andrew Tyrie’s retirement as Treasury Committee chair is a ‘blow’ to the profession, not least because it will be ‘difficult’ for his replacement to come up to speed quickly, she added. Houlder remained confident that Philip Hammond will remain as Chancellor under the next Conservative government.
Audience member Natalie Miller floated the idea of an independent tax commission if the public mood was that tax was too complicated to leave to politicians. Rutter replied that there should be more independent reviews of different taxes, on top of the work done by OTS. However, she said the Treasury finds that some stakeholders provide input too late to make a significant difference to policy.
When the discussion turned to the tax triple lock and whether it should be maintained, Cullinane expressed his concern that the country risks becoming ‘ungovernable because too many things are fixed’. Rutter derided the triple lock as ‘stupid’. Aplin said it is incumbent on tax professionals to explain how the tax system works to the public or else tax debate among the public will continue to be focused on the ‘subjective filter of what is fair’. Amiss’ final point was to state that ‘we cannot have tax competition and tax simplification’.
An audio recording of the May 9 debate at the Institution of Civil Engineers is available below.
Part 1/4 - Opening by John Preston
Part 2/4 - Making tax digital
Part 3/4 - Policy and legislative challenges (incl. Finance Bill)
Part 4/4 - Public perceptiion of tax