Nichola Ross Martin Presidential Incoming Speech

Thank you Charlotte,

You have been a really excellent president, leading CIOT through all the challenges of the last 12 months. Thanks to you, to our brilliant volunteers on Council, committees and branches, and to our wonderful staff team, our institute has continued to grow in size, in profile and in influence.

This is the first time one female CIOT president has handed over to another – an overdue landmark!

I look forward to continuing to work with you, as past president, with Paul Aplin as Deputy President and with John Barnett as Vice President over the year ahead.

My journey in tax

My background was not in tax at all, in fact quite the opposite. I graduated with a degree in the History of Art and Design and I had ambitions of moving up through the world of decorative arts, perhaps rising to run a museum or gallery. But it was not to be as, by a strange quirk of fate, my chance to do a Master of Arts degree got lost in the post and for want of a job at short notice I elected to train as an accountant instead. As an audit junior, an occasional task in the office was to insert paper updates in the large volumes of tax guides that lined the tax partners’ offices. There seemed to be a never-ending stream of updates, I tended to read them as I went and that was what got me hooked on tax.

I created my first tax website in 1994.  I had become fascinated by the internet throughout the 1980s and taught myself some basic coding. I was running a small practice at that time and I thought that online was the ideal place for tax know-how. Back then business websites were just simple static pages. If you went to an accountant’s website, it was usually just one page with their phone number and address. My website had lots of pages and even a spoof blog. My clients liked my online tax guides and I found that I learn best by writing. It was a win-win situation.

The rest, as they say, is history. I launched Rossmartin.co.uk, as my own practical tax database, in 2010. It now has thousands of subscribers I cannot thank enough all those people who have worked with me to make that resource what it is today.

My involvement with CIOT started back in the noughties when HMRC was reviewing its Powers, Safeguards and Penalties. I was tax editor of Accounting Web at the time and was asked to write some guides on this area for CIOT members. I also created an App for CIOT, where you scanned a QR code to instantly Gift Aid any donation, storing the details for claiming relief on your tax return. In 2017 I joined the Institute’s Council and here I am today.

A time of transformation

So what does the next 12 months hold?

This is a time of transformation.

We have an ambitious new government, a volatile world order and, above all, an ongoing technological revolution that is changing our profession and our society.

As an institute we need to ensure that we are the forefront of managing these changes, that our systems and qualifications are fit for purpose, that we are supporting our members as they adapt to technological change, and that we are bringing the practical insights of our members to the important work of modernising tax law and administration.

Modernising our qualifications

Let’s start with our qualifications. During Charlotte’s term we launched a review of the CTA to make sure it retains its relevance and meets the needs of the market. Last month we launched a consultation, seeking views from members, students, employers and others on what the new syllabus should look like. Please let us know what you think.  What are the skills and competencies tax advisers will need in 10 years time? How should we test for them?

Tax technology skills are clearly central. As well as thinking about their place in the CTA we have our new and very popular Diploma in Tax Technology, and ‘AI for tax’ and we are in the process of developing an ‘AI ethics in tax’ course in partnership with the ATT. And I am looking forward to our Tax Technology Conference next week in Birmingham, exploring the latest advances in this area.

We also have our Advanced Diploma in International Taxation, ‘ADIT’, continuing to hit new heights, with almost 4,000 students worldwide studying for it and another new module, this one on South African tax, set for its first exam round next month.

Delivering public benefit

Our qualifications are one way in which we fulfil our public benefit remit, promoting tax education, however it does not end there. We also do a lot in supporting members with their professional development, through our branch events, webinars, conferences and through other initiatives. I want to thank everyone involved in delivering this vital work.

I also want to thank our professional standards team and volunteers, including those at the Taxation Disciplinary Board, for their work upholding the standards that clients and wider society rightly expect from us – not just pursuing breaches but reviewing, publicising and educating, helping to maintain trust in our institute and our profession.

And then there is the work we do directly with the public. At the heart of this is our Low Incomes Tax Reform Group. We’ve just redesigned and relaunched LITRG’s website and the team is innovating in social media to ensure that we get our messages out to a broader audience.

In the run up to last year’s general election we created Tax Policy Explainers, written to inform policy debate and expand understanding of how the tax system works. We are continuing to work on these and expand them to wider audiences too.

We also have a role as a convenor of tax debate, bringing together those with an interest in tax to share ideas and insights. We do that at events like our recent ‘20 years of HMRC’ conference and the debates we hold with the IFS and other bodies.

And of course there is our technical work, seeking to improve the policy and processes of our tax system.

Making Tax Digital

A huge focus right now is on Making Tax Digital for income tax. In April next year, the first group of self employed traders and landlords are mandated into digital record keeping and quarterly reporting. HMRC’s MTD team are being proactive in getting out and about and publicising that fact. They are taking a truly public facing role and talking and listening to tax agents as they go. Judging by the crowds at software events and accountancy trade shows the tax and accountancy professions are very keen to hear more and get properly engaged too.

Moving clients into MTD will not always be easy. The transformation required is not just about software, it’s about having the staff and other services in place to deal with demand.

Making a success of MTD will need HMRC and tax professionals to continue to work closely together. The building in of multi-agent functionality, as requested by CIOT and others, is a really welcome step in HMRC’s MTD development process. We appreciate how long it takes to make this kind of transformation but are still pushing to ensure that this doesn’t remain a second-tier priority in future digital changes.

We will play our part, publicising, educating and providing constructive challenge where we think things can be improved.

My message to everyone in practice on MTD is to talk to your clients and your software providers and think about whether the public beta pilot might be a good option for your clients – but don’t wait too long as the clock is ticking.

Service levels

The shift into digital is inevitably a slow process, due to the complexities involved. That means it is important that government ensures that online services are fit for purpose before restricting access to traditional contact methods like phone and post.

Our joint report with the Institute of Chartered Accountants (ICAEW) on HMRC’s service levels set out constructive recommendations for how services can be improved and with that pressure on HMRC’s systems reduced. The minister’s announcement that a dedicated mailbox will be set up for agents with unresolved PAYE and self-assessment queries delivers one of those recommendations and is welcome. I’ll continue to press our other proposals with ministers and HMRC over the year ahead.

Regulation of the tax profession

Something else happening next April is the introduction of the compulsory registration of advisers who interact with HMRC. We supported this in our response to the consultation. It’s a potentially useful first step in raising standards among unaffiliated agents.

We are waiting to see what will happen next, ever mindful that regulation must not impose excessive burdens and HMRC must have a plan to tackle rogue agents in the meantime, as any new framework will take some years to introduce.

Tax reform - some big questions

Finally, I want to make some comments on tax reform.

Tax was at the centre of last year’s election. The tax changes announced in the following autumn’s Budget continue to be hotly debated. However, while there is plenty of argument about rates and burdens in parliament, there is very little about reform and design.

Take employment taxes. The PAYE system is the government’s main bread winner.  Successive governments have tweaked the rates and thresholds for national insurance but paid rather less attention to the fundamental issues as to how tax policy might adapt to cope with the changing world of work.

At the core of this is a really important problem for many employers and workers and that is defining their employment status. This is not clearly defined in legislation. But it’s an area where employers and employees need certainty. I appreciate that HMRC has developed its Check Employment Status for Tax tool, but this does not always provide conclusive results, and that uncertainty can result in long and expensive disputes.

I have long thought that determining employment status for tax is far too difficult and costly, and that legislation would be desirable. We have a statutory test for residence, with a system of tie breakers, and by and large that works very well. A similar approach for employment status could clear up a lot of uncertainties and reduce administration costs for business, workers and HMRC.

And then there is the problem of the sheer complexity of a lot of our current employment legislation. Someone has got to tackle this sooner or later.

As someone advising owner managed businesses I cannot fail to mention the proposed changes to inheritance tax. The tapering of business and agricultural property reliefs in particular have had huge amounts of media and political attention. I get the politics and appreciate the desire to redistribute wealth, but where in these changes is the wider debate? Could the government have achieved their aims in a less contentious way if they had consulted at an earlier stage, or perhaps even considered this as part of a wider review of inheritance tax or even capital taxes as a whole?

On that front I wonder whether it is a sensible policy to promote a system that incentivises entrepreneurs to retire early when the government wants to grow and not shrink the workforce? This is the sort of issue that we are keen to explore in our party conference debates this coming autumn, with the Centre for Analysis of Taxation, which I’m very much looking forward to.

And there is the Corporate Tax Roadmap, progressing through various consultations, but limited in its scope and missing any statement of strategic aims.

To pose these questions is not to argue for an ‘everything everywhere all at once’ approach to tax. But it is to point out that there is more to tax policy than rates and thresholds. Strategy is crucial. Back in 2017 CIOT, the IFS and the Institute for Government argued in the ‘Better Budgets’ report that chancellors should make an early statement in a new parliament spelling out their guiding principles and priorities for tax policy, to encourage them into a more strategic, less ad hoc approach. This advice still stands.

And there are other big questions. Like where international tax co-operation is going. And how we can improve how we tackle tax crime. These are too big to answer in this speech. But they are, thankfully, just the kind of topics we can explore in our debates – and they will be the topics of our June online debate with IFS, and our July CTA Address respectively.

On issues like these, this is the role CIOT can play – convenor, facilitator; bringing together tax professionals, economists, policy-makers, academics and other stakeholders to chew over the knotty problems in tax and try to identify fruitful ways forward.

Concluding remarks

So to conclude, I am really looking forward to the year ahead. This position is not just about chairing our Council of Trustees, it’s also an ambassadorial role and I look forward to going out and about to meet and greet new students and members, support the staff, visit the branches and ‘fly the flag’ for the CIOT. And I want to hear from you, so please do come and say hello if you see me out and about.

It is an enormous honour to take on this role. Thank you for entrusting me with it.