Bill Dodwell, Head of Tax Policy at Deloitte comments on the report from the Public Accounts Committee:
26 April 2013
“The report highlights the important role tax advisors play in the effectiveness of the tax system, alongside the challenge that comes with the complexity of tax law. We agree that confidence in our tax system can only be maintained if individuals and companies pay, and are seen to be paying, the tax levied by Parliament.
“The Government needs to capitalise on international initiatives to update the principles of allocating taxing rights for the challenges of new technology; continue to work to simplify the tax system and make it more competitive; maintain and strengthen their vigilance against avoidance; and lead an educated public debate on how the corporate tax take has risen substantially over the last 40 years in an increasingly competitive world.
“We agree that HM Treasury needs greater tax expertise, and the policy of frequent rotation of roles within the Treasury and Civil Service does not help. We have responded to requests for secondees and have provided a small number of people with some tax experience to help the Treasury and HMRC teams working on policy initiatives. Our secondees have all reported to experienced Treasury and HMRC officials and have never driven any policy initiative.
“We are pleased the committee acknowledges the valuable role provided by tax advisers in giving technical tax advice to the government. We do not believe that there has ever been any conflict of interest but would want to help ensure that there is no perception of conflict. We would also note that bodies such as the Chartered Institute of Taxation and the Chartered Accountants’ Institutes – which we support - put in significant effort into ensuring that the Treasury and HMRC receive views from smaller firms and small business.
“We disagree with the Committee’s claims that there is a lack of clarity over where we draw the line between acceptable tax planning and aggressive tax avoidance. We have a significant role in helping our clients understand the law and meet their vital compliance obligations. The UK has a very substantial body of tax legislation and case law; we perform an essential function in the UK economy by helping our clients navigate this complexity.
“Tax advisers are already governed by a code of professional ethics which is set by a range of professional bodies including the Chartered Institute of Taxation and accountancy bodies and this is regularly updated to reflect the current environment. We expect that the next update of the code will cover this issue in more detail, to help all tax advisers understand their professional obligations.
“We also believe that account needs to be taken of the total contribution made by business. Firstly, business pays a very wide range of taxes – about 30% of total tax in the UK. Secondly, business collects most of the tax for the tax authority. Thirdly, business provides a much wider range of contributions to society, such as employment, and investment.
“The UK – like all countries – wants to attract businesses to base themselves in the UK and a competitive tax regime is vital to achieving that. Growth in UK employment is the single most important factor in economic growth. The UK’s newly competitive corporate tax regime is encouraging multinationals to move additional activities here supporting jobs and building on the many strengths of the UK.”
Notes to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
Member of Deloitte Touche Tohmatsu Limited.