To mark my retirement as a consultant with RSM, I write this, my final article. I will continue to be involved in the wider tax world in the future, but stepping down from 'active service' as an adviser inevitably does lead me to look back over my career.
In some ways things have changed beyond recognition. I started in a world of typewriters, telex messages and a working routine dominated by the time that the post was delivered and collected. I vividly recall my first encounter with a fax machine and wondering whether this new-fangled technology would ever catch on!
The tax world then was very different. The Inland Revenue and HM Customs and Excise were separate organisations and every town had its own local tax office with a walk-in enquiry counter. HMRC has largely retreated from direct contact with the public, and despite some hiccups seems determined to drive through its digital agenda.
It is easy to look back with rose-tinted spectacles, and there is no doubt that we have lost something of the public service ethos of the old Inland Revenue. But I do think that there have been positive changes as well. When I started in tax, the Revenue’s internal guidance was a closely-guarded secret and it was a sacking offence to reveal it to taxpayers. Now HMRC’s manuals are available on the web and are backed up by a range of other information which would have been unthinkable a couple of generations ago. There is still much more to do, of course, to ensure that the right information is easily accessible, but I wouldn’t want to go back to the old days.
Similarly, there is a much greater openness when it comes to consultation about tax changes than there once was. Again things are not perfect, but what we have now is far better than the days when everything in the Budget was announced with no prior notice.
What about the tax system itself? It is vastly more complex that it was when I started. Partly this is because business life has changed beyond recognition. I ordered something online yesterday evening and it arrived this morning: contrast that with the days when the standard on mail order was 'allow 28 days for delivery'. Technological changes like this inevitably put pressure on the system. But there has undoubtedly been a tendency to go to extreme lengths to 'avoidance-proof' new tax measures. This rarely works and all too often such complex drafting has led directly to the creation of more loopholes.
But in many ways the fundamentals have not changed. In recent articles we have discussed issues which would have been very familiar thirty years ago. What expenditure do you get tax relief on? How should non-doms be taxed? What should HMRC’s powers be to go back and look again at prior years? How should pension contributions be relieved?
Recently, we reflected on the latest employment status case, involving Lorraine Kelly’s personal service company. That really brings me full circle. One of the very earliest memories I have of my tax career is speaking to a senior Inland Revenue official at a reception, who told me that he had been instructed by ministers to come up with a simple checklist of no more than nine questions, which could be used to give a binding decisions on a person’s employment status. He was struggling to do this and 30 or more years later I don’t think that we are any nearer resolving the issue. The fact that conclusions are never reached on such fundamental points is a source of enormous frustration to taxpayers of course, but I have to confess that it is one of the reasons why I have found taxation to be such a fascinating career.
Thank you for reading my contributions over the years. I certainly appreciate the warm feedback that I have had on many occasions – even when people fundamentally disagree with what I have written. I will continue to read this bulletin with interest and look forward to seeing how George and his colleagues reflect on the tax issues of the day. I suspect that they will never have a shortage of things to write about.