Chairman of the Tax Faculty reflects on the last few years
In 2015 Carl Bayley took over from Rebecca Benneyworth as chairman of the Tax Faculty. Here he discusses what the last few years have entailed – Professional Conduct in Relation to Taxation, Making Tax Digital – and the appointment of Mary Monfries as his successor.
Three years ago, I faced the daunting task of stepping into the shoes of my predecessor, Rebecca Benneyworth, as chairman of the Tax Faculty. The reins were handed over in May 2015 and I can recall being urged to find a cause to champion during my term. I pondered this idea for a while... and then events took over!
First there was PCRT...
In July that year, we began work on a new iteration of our core document on professional standards, Professional Conduct in Relation to Taxation (PCRT), in response to the government’s 19 March 2015 challenge to the professional bodies to 'take on a greater lead and responsibility in setting and enforcing clear professional standards around the facilitation and promotion of avoidance to protect the reputation of the tax and accountancy profession and to act for the greater public good'.
Updating PCRT involved a huge collaborative effort across ICAEW, led by current president Nick Parker, in conjunction with the six other professional bodies that sign up to the document. I was immensely proud when the updated PCRT guidance was formally adopted in November 2016 and made effective from 1 March 2017.
Our response to the 19 March challenge was crucial in protecting the reputation of our members, and we know the recognition that the new version of PCRT has achieved with HMRC, and others, will help to secure our members’ position as we move forward into an uncertain future which is likely to contain some sort of, as yet undefined, agent strategy. Not only was the new PCRT the right thing to do, but its role in protecting our members will become vital in the years ahead.
...And then MTD
Six months into my chairmanship, the November 2015 Autumn Statement brought something of a shock to the system when the government announced plans for mandatory electronic record-keeping for the vast majority of UK businesses, including landlords. Making Tax Digital (MTD) had arrived on our desks, on our agendas and in our consciousness, and it has remained there ever since.
The faculty sprang into action straight away. Right from the start, we made our position crystal clear: we are strongly in support of the government’s desire to move to a digital tax system as we believe it will create significant efficiencies and thus bring enormous benefits to the UK economy. However, we are firmly opposed to mandation. That was our position in November 2015 and it has remained our position ever since.
Our approach on MTD has been two-pronged. First, we campaigned relentlessly with HMRC, government and other bodies to resist mandation. We critically analysed the proposals; questioned the timetable for introduction; and advised on the many practical implications of MTD.
This work showed the faculty at its best: being the ‘critical friend’ to government and HMRC and, while supporting the overall direction of travel, pointing out the practical concerns that we, as a body whose members are engaged in tax practice in the ‘real world’, can see, and, of course, standing up for what we know is right: no mandation.
Our efforts have borne fruit already, with a delay in the timetable for MTD’s introduction for income tax, although our work continues. The introduction of MTD for VAT will be a crucial test of the new regime and we await the results with interest.
Second, at the same time as campaigning against mandation and advising government on some of the practical aspects of MTD, the faculty has been working hard to help members prepare for its introduction.
As readers will have seen, there have been numerous articles in previous issues of TAXline and we have, of course, run a number of webinars (with more planned) and featured the latest developments on MTD at our conferences in London, Manchester and Scotland, as well as numerous other roadshow events around the UK. On top of all this, our MTD hub on the ICAEW website has provided a home for all the latest technical information and practical insights on the issue.
One could be forgiven for thinking that PCRT and MTD must surely have been the greatest challenges of my term as chairman of the faculty and, indeed, for some of my colleagues, they certainly have been. For me personally, however, my greatest challenge emerged during the second year of my term.
Governing the faculty
As many readers will know, the Tax Faculty was founded in 1991 and, while our predecessors did a marvellous job of setting it up, by 2016 it had become clear that our internal governance structure was in need of modernisation. Back in 1991, tax was seen as a very technical, specialised, subject, and our own structure at the faculty reflected this.
But nowadays tax is very much ‘centre stage’, both within ICAEW and in the political and business world which surrounds us and in which our members operate. The 19 March challenge was a prime demonstration of this. In 2016, we realised we needed a governance structure which reflected the changes that had taken place over the quarter-century since the faculty was founded.
And so, I found my cause to champion. Or maybe it found me. Either way, the project to design and implement a new governance structure for the faculty involved another enormous collaborative effort across ICAEW. It was essential to create something which reflects the needs of all our colleagues across the Institute; which serves the interests of both ICAEW and Tax Faculty members; which enables the faculty to remain the strong voice of tax within ICAEW, acting in the public interest; and which embraces the diverse range of our membership. I believe our new structure achieves all of this and it was formally endorsed at the March 2018 ICAEW Council meeting.
One thing I would like to assure readers of just now is that the fantastic work of all our technical committees and sub-committees will not be affected and will continue as normal.
As anyone who has held any form of office will know, one of your most important tasks, if not the most important, is to find your successor. Indeed, this was another major challenge which I faced during my term as chairman. I am, of course, delighted that Mary Monfries agreed to take on the role.
They used to say: 'Behind every great man is a great woman,' but these days, as the Eurythmics observed: 'Sisters are doin’ it for themselves'. Quite right too: I am pleased to reflect that I am, in my time as chairman of the faculty, sandwiched between two great women of the tax profession.
A role like chairman of the Tax Faculty is very much like being part of a relay team. I hope I’ve had a good lap, but it’s the team’s performance that matters. Looking back over the last three years, there is a great deal for the faculty team to be proud of.
All our achievements (and there are many more than I have been able to list here) have been team efforts and I would like to take this opportunity to thank Frank Haskew and all the faculty staff; the events and central services staff who have supported us; and, of course, all the volunteers who contribute so much to the faculty through working on committees, contributing to consultation responses, speaking at conferences, presenting webinars, and in so many other ways. There are too many of you to list here, but thank you all.
So, my final thought is this: it seems to me that the faculty should have the same motto as the Los Angeles Police Department. We have protected the interests of our members by updating PCRT, campaigning hard on MTD and in many other ways.
We have served our members by providing all the information and resources they need to deal with MTD and the many other challenges that come their way and by changing our governance structure to ensure we can serve them better in the future.
We have served the public interest by being that ‘critical friend’ to HMRC, recognising the crucial roles played by everyone within the tax system, and making sure that the system works day to day at the coal face. In fact, what we do is nothing less than to protect that most essential part of civilised society tax.
So, our motto should indeed be: ‘to protect and serve’.
About the author
Carl Bayley was the former chairman of the Tax Faculty and is director of Bayley Miller Ltd