Ken McHattie CA, ICAS President: Ready for the challenges ahead

Ken McHattie CA, ICAS President
By Ken McHattie CA, ICAS President

11 May 2016

ICAS President Ken McHattie CA on his determination to uphold the principles of the Institute and to bring balance to the debate over tax and fairness.

So here it is, my first column as ICAS President.

Twelve opportunities to entertain, provoke, sound off and generally grapple with the key issues facing our profession and ICAS members. Wish me luck!

I embark on this with real pride and a determination to spend my 12 months as president working as hard as I can with my fellow CAs and with the very talented team we employ to continue to improve our Institute.

Our mission is to create “the leading, global professional community.”

My aim over the next 12 months is to make sure we continue to take the right steps towards that goal and that, when I hand over to my successor, ICAS is in even better shape than it is today.

I have spent a great deal of time over the past decade involved in committees and policy making inside the Institute. Now I hope to put that experience and knowledge to good use working on your behalf to make sure ICAS continues to be an Institute we are all immensely proud of.

My first few days as President bear witness to the challenges ahead as my term opened amid a political firestorm around the leaking of the “Panama Papers”. This has, once again, propelled the issues of tax avoidance and evasion into a national debate.

That 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.

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.

CAs need to take a lead in driving the agenda for greater transparency through innovation and openness.

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.

ICAS last year set out our key principles on tax, which we believe are critical to understanding the issues relevant to the debate.

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.

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.

Over the coming weeks and months, we shall ensure that these principles are to the fore as we attempt to bring balance to this debate.

I have spent a great deal of time over the past decade involved in committees and policy making inside the Institute. Now I hope to put that experience and knowledge to good use working on your behalf to make sure ICAS continues to be an Institute we are all immensely proud of.

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