History

7 Apr 2021

History of the Chartered Institute of Taxation

At a dinner in Leicester in late 1929, two former tax inspectors - Cecil Newport and Ronald Staples (the founder of Taxation magazine) - discussed forming an institute of taxation. A year later, eight tax men met at Hutchins & Plowman, Chartered Accountants, and founded the Institute on 5 December 1930. Ronald Staples was Chairman; Gilbert Burr was Secretary. The Founder Members of the Institute were Roy Borneman, Edward Boyles, Gilbert Burr, Roger Carter, Gordon Howard, Whorlow Legge, Cecil Newport, HA Silverman, Walter Smee, Stanley Spofforth, Ronald Staples and Dr AV Tranter.

The modern institute is considerably more diverse.

Examinations

From the start, the Institute offered its own exams.  The first exam was held in December 1932 and had four papers: Income Tax Theory, Income Tax Practical, Death or Inheritance Duties (or Other Taxes), and Economic Theory. For the second paper, the candidate could take in a copy of the Income Tax Act 1918 and Finance Acts. A fifth paper could be taken, then or later, to obtain a special certificate. The British College of Accountancy provided a special course and published model answers; it said that the examination was too hard, so an intermediate (renamed associateship in 1940) exam was introduced in June 1934.  The Institute made passing the institute exams compulsory for membership from January 1965.  In 1968 a record number of 1,370 sat the associate examination, but only 244 passed, so registration twelve months before sitting an examination was introduced from May 1971, and from May 1972 the examination was divided into intermediate and final stages.  The fellowship exam never attracted many candidates and was withdrawn in 1979, to be replaced by the current thesis system.

More recently, the CIOT introduced ADIT – the Advanced Diploma in International Taxation.

Membership

By 1934, the Institute had 242 fellows and 143 associates, 90% of whom were accountants. Membership climbed steadily to 1,000 (including 500 fellows) in 1942, 2,000 (690 fellows) in 1952 and 3,000 (720 fellows) in 1961. The announcement in April 1960 that all future entrants must pass the Institute's own examinations brought a surge of applicants to beat the January 1965 deadline; by December that year membership reached 5,100, with a peak of 1,017 fellows. By 1972 membership reached 5,850 (908 fellows), but the introduction of the intermediate examination caused a temporary fall and 6,000 (775 fellows) was not reached until 1979. In 1988 membership reached 7,500, of whom 650 were fellows. Membership reached 10,000 (601 fellows) in 1996 and 13,500 (490 fellows) in 2005. The first admissions ceremony was held on 26 March 2000 in Guildhall, and these have since been held there twice a year. In 2004 the first Fellows' Dinner was held at King's College Library, Chancery Lane WC2.

Legal status

On 1 November 1934, the Institute of Taxation was incorporated as a company limited by guarantee.

The letters FTI and ATI were introduced in May 1933 when members and associate members were renamed fellows and associates. However, the Textile Institute of Manchester had those letters under its 1925 Royal Charter. After a personal interview with the Board of Trade, FTII (Fellow of Taxation Institute Incorporated) and ATII were agreed on 23 October 1935.

A grant of arms without supporters was obtained in 1945, and a grant with supporting owls was obtained on 30 July 1971.

Following the Institute's 21st anniversary, it petitioned for a Royal Charter in 1952, but other professional bodies objected that taxation was not a separate profession. The topic was revived in 1972 and 1980, but no action taken until a petition was submitted in 1991 and a Charter was granted on 29 April 1994 to the Institute of Taxation. It changed its name to the Chartered Institute of Taxation on 18 October and Lord Mackay of Clashfern, the Lord Chancellor, formally presented the charter in Lincoln's Inn Hall on 14 December. The Privy Council agreed in 1997 that members may use the title 'Chartered Tax Adviser' and in 2002 that they may use the initials CTA.

Charitable status was obtained on 15 September 1981.

The Institute’s magazine

The Taxation Practitioner was produced by Sweet & Maxwell every two months from September 1973. Besides Institute news it reproduced the ‘Current Tax Intelligence’ pages from British Tax Review. Then from January 1976, with help from Ian Dickson of Butterworths and with Leslie Livens as editor, the Institute published its own monthly journal Taxation Practitioner. In 2000 the title changed to Tax Adviser.

International links

in 1963 the Institute established links with the Union Européenne des Experts Comptables, and in 1974 the Institute was admitted a member of the Confédération Fiscale Européenne. The CIOT and the ICAEW are the two UK members of the CFE.

Some Presidents

Originally Presidents served for an unspecified term but in 1974, a two-year presidential term was inaugurated. This was reduced to one year from 1986, although the 2020-21 pandemic has meant eighteen-month terms for Glyn Fullelove and Peter Rayney.

Stanley and Michael Spofforth are the only two family members to have served as President (father and son).

 Wreford Voge of Edinburgh was the first Scottish President and the last to serve a two-year term; he introduced as a member Lord Mackay of Clashfern, later Lord Chancellor. He also proposed the formation of a body for those who provide compliance services, leading to the Association of Taxation Technicians.

 John Avery Jones was the first solicitor to be President in 1980-82.

Jennifer Ainsworth was the first woman Council member and President (in 1992-93).  Penny Hamilton was the 2002-03 President, followed by Anne Fairpo in 2014-15.

Professional Standards

Ethical Rules and Practice Guidelines was published in 1989, and guidelines on disclosure were published jointly with the ICAEW early in 1992. These are regularly revised jointly with the ATT. In 1995 Professional Conduct in relation to Taxation was also produced jointly with the ICAEW and other professional bodies, and this too is kept up to date, with the current edition being adopted in 2017.

The Institute encouraged continuous professional development from 1991 and made it compulsory from 1996. It set up a Standards Committee in 1996, which was much involved with the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2003. A joint Disciplinary Consultative Committee, formed in 1997 and chaired by Roy Jennings, harmonised and streamlined the disciplinary procedures of both the Institute and the ATT, making them independent.  The independent Taxation Disciplinary Board was established by the CIOT and ATT in 2001.

In 1998 a members' support service was introduced to enable those suffering from personal or professional worries to talk in confidence to another member.

Low Incomes Tax Reform Group

Launched by John Andrews in 1997 as part of the CIOT, LITRG helps those least able to afford tax advice. LITRG works to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of people on low incomes.

LITRG works extensively with HMRC, the Department for Work and Pensions (DWP), HM Treasury, Revenue Scotland, Scotland Office, the Welsh Government, and the Welsh Revenue Authority as well as other government departments, local authorities and devolved administrations. LITRG comments on proposals and put forward its own ideas for improving the system. Too often, tax and related welfare laws and administrative systems are not designed with the low-income user in mind, and this often makes life difficult for those we try to help.