New President urges caution on tax tech revolution
The new President of the Chartered Institute of Taxation (CIOT) is issuing a warning that the Government should not get carried away with its enthusiasm to take the tax system online.
Anne Fairpo, who succeeds Stephen Coleclough as the Institute’s President today, will say that “wild enthusiasm for the wonders of technology [must be] tempered with some practical reality”, not least because not everyone wants to deal with their own tax affairs online. She will warn that any system which overlooks the desire of many people for someone else to take care of their tax affairs will damage the tax system.
In her presidential inaugural speech, to be made at the CIOT’s annual general meeting this afternoon, Anne Fairpo will also confirm an increase in the Institute’s support for the academic study of tax as a centrepiece of her presidency. The Institute will commission research into areas of tax which have an impact on its members and other tax professionals, and is launching a new Journal of Tax Administration, in conjunction with the Tax Administration Research Centre at Exeter University.
Extracts from Anne Fairpo’s inaugural speech as CIOT President
On tax and technology:
“Tax administration has long relied on technology, from tax compliance software onwards. That's something that's now accelerating when it comes to dealing with HMRC, as well as clients – partly because of advances in technology but also because government policy to reduce the costs of administration in general has inevitably led towards a greater use of technology in that administration.
“Sometimes, tax administration seems to be the poster child for optimistic use of technology in government, from the drive to get everyone filing online, to HMRC's Connect system which pulls together government data sources – not all of them internal to government – to analyse and highlight anomalies as well as double-checking tax returns (particularly inheritance tax).
“But – and this might come as a mild shock to those who've encountered my general tendency to use technology wherever it makes sense (and it usually does make sense. I'm a geek, it's not even worth trying to deny it) – I think a bit of caution might be in order, particularly over data. Not just data loss – the days of losing CDs of data in the post are probably over, as everything's in the cloud these days, but that just amplifies the potential risks. Of particular concern is over-reliance and inflated expectations: we're still somewhere in the early stages of the Gartner hype cycle when it comes to government and data (Gartner’s hype cycle is a theory that engagement with new technology goes through four stages, from wild enthusiasm through disillusionment and back to practical implementation). Government seems definitely in the early stages of that cycle still – possibly because of the success of the Connect system internally (cost: £45m; benefit: several £bn so far, it seems). Big data gives you possible correlation, not definitive causation: the potential for trouble is obvious. Even Google doesn’t get it right all the time – its Flu Trends data analysis fell off the rails after a couple of years when public search patterns changed in response to media coverage of that analysis.
“Over-enthusiasm for technological solutions at all costs is another problem: I might want an internet-enabled fridge that can re-order supplies for me (and I do want one!) but that's not going to impact anyone but me and my bank account, really. When Government wants everyone to deal with their own tax affairs online, they seem to overlook the fact that not everyone will want to. In fact, quite a lot of people would rather have someone else deal with it for them – and technological measures which overlook that do no favours to the public they are (supposedly) designed for, let alone the advisers that provide the support on which HMRC relies. This is an area where we can, and must, make sure that wild enthusiasm for the wonders of technology is tempered with some practical reality.
“And sometimes it just all gets totally out of hand – I'm going to watch the project to move HMRC manuals from the Revenue website to the gov.uk website with some interest.”
On support for academic study of tax:
“The last few years or so have seen tax come more and more into focus in public debate here in the UK as well as overseas. Tax is making headline news on a daily basis and not just when a comedian or DJ decides to utilise an 'interesting' interpretation of tax law. There are many drivers for this interest, but it's clear that the public debate is not always as informed as it could be: the tax education of the public in general, from school age onwards, continues to be a focus for the Institute. None of this is new: the technical and education teams in particular have long had projects which have a public focus as, of course, does LITRG. Branch meetings are of course open to the public, should they wish to attend.
“And, not least, we provide grants for the academic study of tax, principally to those studying and researching for a PhD qualification. All of this is important, and must continue, but it's not enough.
“In particular, the academic study of tax in the UK is something that needs more support. On the Continent and elsewhere, there are far closer ties between tax practitioners and tax academics – indeed, many of the tax advisers I've worked with overseas have masters-level degrees or doctorates in tax law, and quite a few also teach tax law at their local university on a part-time basis. That's not absolutely unheard of in the UK – I am one of a number of practitioners (most of them CTAs) who teach the tax LLM course at Kings' College, London, for example, but it is much less common here: partly for cultural reasons, and partly because there just has been less academic study of tax law here. That might be changing – in part because of the press coverage of tax issues over the past couple of years, which seems to have led (for example) to a 400% increase in applications to one particular tax law course! – but that doesn't negate the need to support academic study, to ensure that any current increase continues.
“This isn't simply a case of "we must catch up with our neighbours" but, importantly, it's a critical part of engaging in the tax debate both here and abroad. It's difficult to engage without information, although it clearly doesn't stop some people in the public eye from trying to do so. The academic study of tax – in the areas of policy, law, and administration – gives a perspective that it is difficult to obtain from practice alone. This is not to say that the experience of practice isn't important, of course. It is and will continue to be important and, in fact, is an area in which we as an Institute can support academic study of tax by providing access for researchers to practitioners, to better integrate practical experience with academic study.
“Academic research can also give another perspective to issues and problems, with a historical and geographical dimension which is sometimes difficult to find the time to explore when client demands drive responses.
“To support the academic study of tax in the UK, the Institute has increased the funding available for research – not just to pay out grants to PhD students, but also to enable us to commission our own research into areas of tax which have an impact on members, both in practical matters of administration and in the design and implementation of tax law in the UK.
“We are also launching the Journal of Tax Administration, a peer-reviewed international academic journal, in conjunction with the Tax Administration Research Centre at Exeter University. One of the problems faced by tax academics is a lack of tax-focussed journals; there are, of course, other academic journals relating to tax law such as the British Tax Review, but not enough of them. "Publish or perish" isn't simply a neat catchphrase, it describes well the need for academics to publish academic work in order to maintain and progress their careers. The focus of the Journal – the administration of tax law – does, of course, fit well with the focus of the technical work of the Institute as well and we also anticipate that articles produced for the Journal could be of interest to, and of benefit for, CTAs. The first issue of the Journal will, hopefully, be published in a few months time, before the end of the year – more information will, of course, follow in Tax Adviser (which, for the avoidance of doubt, is not going anywhere – the Journal is in addition to Tax Adviser, not instead of it!)
“And finally, with regard to supporting academic study, I suppose I should also mention the less-altruistic element to such support: tax authorities worldwide are taking a closer look at the academic study of tax, particularly tax administration. Here in the UK, for example, HMRC are closely involved with the Tax Administration Research Centre at Exeter University. If nothing else, where the tax authorities are interested, it seems like a good idea to pay attention because the results of their interest and involvement are likely to impact on advisers sooner or later, and I (at least) would prefer us to have some idea what's coming and (maybe) some more options to get involved beforehand.”
Notes to editors:
1. Anne Fairpo
Anne Fairpo became an Associate member of the Institute in 1998, and a Fellow in 2006. She is a barrister at 13 Old Square Chambers and Atlas Chambers, focussing on taxation of intellectual property, international tax issues and employment tax advice. She has been Chair of the Institute's Education Committee and is a member of the International Taxes Technical Sub-Committee.
Anne writes regularly for a number of publications, is a lecturer in tax law at King’s College London, and is the author of Taxation of Intellectual Property, published by Bloomsbury Professional. She also speaks regularly at conferences and seminars.
2. The new CIOT Deputy President, replacing Anne Fairpo, is Chris Jones. Chris is the Director of Tax Markets at LexisNexis and as such has overall responsibility for everything the company delivers under the eminent Tolley brand. He has a keen interest in promoting the public understanding of the tax system.
The new CIOT Vice-President, replacing Chris Jones, is Bill Dodwell. Bill is Head of Deloitte’s Tax Policy Group. He specialises in international corporate taxation. He also chairs the CIOT’s Technical Committee and was a member of the interim Advisory Panel on the GAAR.
3. The Chartered Institute of Taxation (CIOT)
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.
The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries. The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.
The CIOT’s 17,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Matthew Oliver
External Relations Officer (Monday, Tuesday and Wednesday)
D: +44 (0)20 7340 2702
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