Gary Ashford Presidential Inaugural Speech

You can watch Gary's speech here.

Full text of Gary Ashford's presidential inaugural speech - CIOT AGM - 30 May 2023

Thank you Susan. And thank you for all that you’ve done over the past year. You have been a powerful voice for our profession and for taxpayers.

The journey

I’d like to thank my family, particularly Clare my wife, and my colleagues – at CIOT and also at the firms I’ve worked in – EY, Grant Thornton, RSM Tenon, Kinetic Partners and my home of the last nine years, Harbottle and Lewis. Without your support I wouldn’t be standing here today as your President.

Actually it’s not just firms. I started my career at HMRC in the 1980s, and worked there for 17 years and learned a huge amount in that time.

I was young enough when leaving HMRC to study for ATT and then CTA.  As I say to anyone joining the profession, or to those would be Tax Partners of the future, those exams were fundamental.  Whilst at GT, I took the plunge of joining the Birmingham and West Midlands Branch, ending up as Chairman.  Then the famous John Whiting invited me to join the Management of Taxes Committee, which I also ended up chairing, and my good friend Anthony Thomas suggested I join CIOT Council.  Eleven years on, here I am.

Tax administration

My own journey means I am acutely aware that the tax system is a three way partnership – taxpayers, tax advisers and tax authorities.

Tax payers must pay the right amount of tax at the right time.

Tax advisers must give accurate, honest advice to their clients and their employers to support them in being compliant.

And tax authorities must provide a framework that makes it as easy as possible for taxpayers to be compliant.

That doesn’t feel the case right now.

I will always defend HMRC, as I know there are lots of great people there, doing some very important work, but when people can’t get prompt answers to queries – that makes it more likely they’ll get things wrong.

When people are stuck on phone lines for hours on end – taxpayers and their advisers – that adds to compliance costs.

When people can’t get timely repayments – that harms cashflow and threatens business viability.

Poor service levels at HMRC are not just a pain for taxpayers and advisers, they harm tax compliance, hinder business activity and hammer away at trust in the tax system.

A strong economy needs an effective tax system.

HMRC have 6,000 fewer customer service staff than they did five years ago.

Now I’m a true believer in the power and the potential of technology.

But cutting staff numbers now in anticipation of efficiencies from digitalisation which have not yet arrived, seems to me to be putting the cart before the horse.

Ministers must resource HMRC properly for the job it has to do.

Engaging with HMRC

What is the Institute’s role here?

It is surely to be a candid friend to HMRC. Sometimes critical. But always constructive.

We engage with HMRC every day.

Last year alone more than 200 consultation responses, and more than 600 meetings.

This delivers results –

• Administrative changes like the more sensible timetable for the roll-out of MTD
• Policy changes like the CGT and trust and estate measures in the current Finance Bill
• A crackdown on rogue tax refund companies

LITRG and the tax charities

The latter is just one of the many achievements of the Institute’s Low Incomes Tax Reform Group.

LITRG celebrates its 25^th anniversary in July.

And there is a lot to celebrate –

• More than five million visitors a year to the Group’s websites
• Policy wins like the net pay pension top-up – tackling a glaring injustice against many low paid workers
• Influential reports like last month’s on improving taxpayer guidance

Victoria Todd and her team deserve huge credit.

As do their predecessors – in particular John Andrews who set the group up; and Robin Williamson its first Technical Director, who sadly passed away in September.

John and Robin both played central roles in what is perhaps LITRG’s greatest achievement so far – the setting up of Tax Help for Older People.

Tax Help, and its partner charity Tax Aid, are the profession’s safety net, providing free help and advice to vulnerable, low income taxpayers. The need for this has never been greater. The charities help around 20,000 people a year by phone and in-person, but demand continues to rise.

I invite you, if you can, to support the work of the tax charities – with a donation, or with your time. They are the profession’s safety net, and they need your help.

Regulation

Now, as I said earlier, the tax system is a three way partnership – tax-payers, tax authority, tax advisers.

The relationship between these partners is crucial.

That is why the issue of regulation of tax professionals is so important.

In November the Financial Secretary told Parliament that regulation of tax agents is something she is ‘considering actively’.

If the government decide to move forward in this area there are two broad directions they can go – government regulation, or a solution based around professional bodies.

Government regulation would likely be costly and ineffective. The standards imposed would likely be lower than those already required of our members.

Better by far would be to build on what we have now, by requiring anyone providing tax advice on a commercial basis to belong to a recognised professional body.

Our rules already protect taxpayers, by making clear that there is no place in our profession for those who devise, promote or sell avoidance schemes. They make clear that, as professionals, our members have obligations, yes, to their clients, but also to wider society, and to the reputation of the Institute and the tax profession as a whole.

Public benefit role

Our high professional standards are just one of the ways in which we fulfil our mission to deliver public benefit.

Most obviously, we have our qualifications.

But our educational role is wider than this. It stretches to public education too –

• The work we do through the media to publicise tax rules and obligations
• The wonderful guidance produced by LITRG
• The work we do supporting parliamentary scrutiny of tax laws

And of course we are a powerful voice in the tax policy debate –

• Pointing out unintended consequences
• Arguing for a fair balance of powers and rights
• Making the case for those much neglected qualities of certainty, clarity and simplicity

Simplification

Now I can’t mention simplicity without mentioning the Office of Tax Simplification.

Scrapping the OTS is a mistake. Instead the government should have strengthened it – giving it a louder voice, a wider remit and greater resources. This is what we argued for.

But if it must go, then the government must be held to their promise to ‘embed… simplification into the institutions of government’. Alongside other bodies, we’ve suggested some ways they could make a start on this. We met with the Financial Secretary earlier this month to discuss these, and we’ll be keeping up the pressure.

Technology, crypto and AI

One route to simplifying compliance is through technology.

We’ve been critical of some of the aspects of MTD – the pace of change and underestimates on costs, to name just two.

But the idea that digital tools can increase both compliance and customer experience in the tax system is a sound one.

Technology is also a big part of HMRC’s plans to reduce the ‘tax gap’ - though we remain doubtful that MTD will reduce taxpayer error by anything like as much as HMRC think it will.

Then there’s crypto. One of my roles at the Institute is chairing our crypto assets working group, joint with the ATT. It’s a fascinating area.

In my view digital assets in their broadest form will play an essential part in the development of financial services, in both the UK and the world.  I sit on HMRC’s crypto taxation working group, and whilst I am pleased with some of the technical work being undertaken behind the scenes, and the excellent tax technical guidance, I think HMRC, and other government departments, could say more publicly to help the general population understand this area better, rather than simply repeat the message about risk! This is an area where a policy vacuum will simply be filled by bad actors, and scams and fraud will proliferate.

In my view, we need to recognise crypto assets and the broader Decentralised Finance sector as unique, and therefore needing their own, specific and clear, set of legislation for how you tax them. The government’s new consultation looks to be edging down this road, which is welcome. But wherever we end up, there will have to be a huge awareness campaign to make owners of crypto aware of their obligations.

Then there is AI.

First some reassurance.

I don’t think we are all about to be replaced by Chat GPT and Bard.

In the words of my predecessor Peter Rayney: “We survived the calculator. We survived the spreadsheet. And we can survive the AI revolution too.”

But we’re going to have to adapt.

There isn’t a lot of space in the profession these days for people who can’t use a spreadsheet or the internet.

In a few years’ time it could be the same with AI.

I’ve heard it said that AI is best thought of as a graduate researcher: smart and articulate, but you need to check their workings.

That’s a good approach. This is a powerful tool – for research, writing basic text and coming up with ideas. It could suggest, for example, which reliefs might be available to our clients.

It can free up our time to let us provide more tailored support.

Even more than now, successful future tax professionals, will be those whose offer goes beyond simply crunching numbers and ensuring compliance, to become their clients’ trusted advisers.

This is where our new Diploma in Tax Technology comes in.

It’s our response to the changing demands on tax professionals.

We’ve worked with tech specialists and firms of all sizes to produce a qualification which matches the needs of the profession.

It’s the first of its kind.

I encourage you to take a look.

International

Now, of course another of the impacts of technology is making it easier than ever to trade across borders.

Addressing the tax challenges that come from digitalisation is the aim of the OECD and G20 Inclusive Framework, with its proposals for reallocating tax rights and for a global minimum rate of corporate tax.

So I am delighted that Pascal Saint-Amans, who until last year was heading up the OECD’s tax work, will be joining us in London next week to give this year’s CTA Address, not just looking back at his work at the OECD but looking forward to what comes next in international tax.

Environmental taxation will surely be part of that – and rightly so, given the huge threat of climate change. I expect to see greater and greater use of tax and other means of carbon pricing in the future, to drive down emissions and resource use. As our debate last week on a carbon border adjustment mechanism illustrated, international co-operation will surely be key to achieving this successfully and without degenerating into a trade war.

The international dimension of tax has long been an interest of mine.

For me, understanding our tax system in an international context is key not just to the success of my clients, but to the success of the whole UK economy. When I travel overseas, I want to be able to promote UK PLC as a location for investment and other business activity. I want to be able to promote a world class tax system that encourages entrepreneurship – a framework that supports the scientists and technologists who we need not just for our economic success, but to address those huge challenges like climate change.  Also, our world leading financial services, creative industries and entrepreneurs, throughout our four amazing nations.  

Conclusion

To conclude, I am deeply honoured to be your President for the year ahead.

This AGM may be online but I’m looking forward to getting out and about, meeting as many of you as possible, face to face, at our debates, branch meetings and other events.

See you there!