New ICAS president tells CAs to be aware of court of public opinion
New ICAS president Ken McHattie has used his first address to members to issue a warning that the changing mood of public opinion surrounding tax advice means ‘legal’ may no longer mean justified in the eys of the population and CA’s now risk public vilification.
Mr McHattie, who qualified as a CA with Thomson McLintock in Aberdeen in 1978, and as a solicitor in 1985, made clear he was aware that his first few days as president had coincided with the leak of the now infamous ‘Panama Papers’, days, he said, that “bear witness to the challenges ahead” as the scandal “once again, propelled the issues of tax avoidance and evasion into a national debate”.
The leader of the organisation, which now boasts more than 10,000 members in Scotland and 10,000 members across the rest of the UK and in 100 countries around the world, said the disclosures, and the ensuing debate, will “change the public landscape for all those who own and lead businesses, and for those in the profession who advise individuals and companies on tax.
He said: “Already, the openness expected of our top politicians has changed, probably forever. From here on, no-one will become prime minister, first minister or lead the opposition without having publicly revealed the details of their tax affairs.
“The leak also makes it more likely that new legislation will be enacted making it a criminal offence, perhaps on a strict liability basis for the taxpayer, to take part in or to have advised in relation to offshore tax evasion.
“There is a clear need to take steps to end abuses associated with offshore vehicles. In the current febrile atmosphere, perhaps this is the time for the tax authorities to demonstrate that they mean business, although it’s hard to think that there will be no devil in the detail of that legislation.
“While I have reservations as to whether it is worth further complicating the situation with these measures, they are certain to appeal to public opinion. That may be because, thus far, the political and media debates have largely failed to distinguish between lawful and sensible commercial activity and the secretive and very often illegal use of offshore tax havens by tax evaders and criminals.
“In the middle of all this stands the majority of professional advisers who, like it or not, are now in danger of being vilified (or worse) for providing advice in relation to activity which is clearly legal but which no longer fits the moral attitudes of the day. Advisers will need to proceed with renewed caution.”
Mr McHattie said that the historic body last year set out our key principles on tax, which he believes are critical to understanding the issues relevant to the debate.
He said: “The first principle is that the law must work properly. The UK tax code is one of the longest in the world and growing rapidly as successive chancellors add new complexity at every opportunity. Simpler, better legislation is essential to provide greater clarity and to encourage and monitor compliance.
“The next principle is that high standards of behaviour are expected from CAs, tax advisers, tax administrations, businesses and individuals.”
However, he also used his address to issue an appeal to politicians and industry commentators.
He said: “We want to see better information being provided by government and the media. The debate should not be a witch-hunt of the wealthy (most of whom are party to nothing more than buying ISAs) but about ensuring everyone pays the right taxes at the right time, with a focus on ‘tax saving schemes’ that bear no relation to normal commercial activity.
“Next, we believe that businesses need to be transparent. CAs need to take a lead in driving the agenda for greater transparency through innovation and openness.
“And finally, our tax principles state that government must focus more on tax evasion. The right resources and the right structures need to be in place to crack down on criminal behaviour. In this respect, we would welcome further investment in this area and greater resource for HMRC.”