After an illustrious career in the tax advice sector, John Whiting has taken a directorship at HMRC. He wants more consultation – and he’s looking to bring AAT members into the heart of the discussion, finds Ben Walker
John Whiting is a pragmatist. The man who the Government recruited to simplify taxation – only to be accused of ignoring him and making taxation more complicated – says he understands the pressures his masters are under.
‘If politics and the economy weren’t factors we could do a great deal with the tax system,’ the Office of Tax Simplification (OTS) director says. ‘But they get in the way. The OTS came up with recommendations that we were pretty sure of, but they have to be put in the pot with lots of other things. Quite understandably, the Government’s number one priority is closing the deficit – and sometimes that conflicts with simplification… We need to accept we don’t live in a perfect world.’
I put it to Whiting that many argue that some of the measures the Government has introduced contribute to neither a simpler tax system nor a reduced deficit. ‘What’s the old saying, Ben?’ he says: ‘You might very well think that, I couldn’t possibly comment.’
Fans of television drama will recognise Whiting’s response as the catchphrase of Francis Urquart, central character in the UK version of House of Cards (which has since been re-made by Netflix starring Kevin Spacey), who uses it as a way of telling a journalist he agrees with her assertion without expressly putting his concordance on the record. In this case, it is perhaps more about Whiting being diplomatic than Machiavellian.
His smooth manner – along with his unquestionable expertise and cast-iron track record – has surely contributed to his recent appointment as non-executive director at HMRC. There are some commentators who argue that the appointment of Whiting, a big name tax accountant and former partner at PwC, represents a conflict of interest.
Is Whiting’s appointment a conflict of interest?
But Whiting refutes this, saying he just wants to help the much-maligned Taxman perform even better (he already thinks it does jolly well). ‘The country needs the Taxman,’ he says. ‘And they need him to work efficiently. We hear so much about government spending from this department or the other, yet HMRC is the only department that actually makes money for the government… People don’t realise what a good tax system we have here.’
That final sentence might make many readers splutter into their coffee. Yet Whiting backs it up by arguing that HMRC has a far better record at tax collection than its international peers. ‘In the UK we pay 93% of the taxes we are due to pay,’ he says. ‘In the US, it’s about 85%. And European countries are behind us too. The way it is sometimes portrayed is that the Revenue is falling apart and it’s a shambles. Well sorry, but we are actually pretty good.’
Room for improvement at HMRC
This resolute defence of the Taxman’s record doesn’t stop Whiting admitting there is room for improvement. ‘I think there is a lot more that can be done,’ he concedes. Certainly, the guardian of the nation’s bank balance has itself been a victim of the crisis within it, being subject to cuts that many businesses argue is beyond what the department can bear if it is to maintain a decent service.
Does Whiting think there are enough experts on hand to handle the thousands of tax inquiries made by British businesses? ‘It’s a question I’m going to ask,’ he reveals. ‘I don’t want to express any view now – because I don’t know… [But] staffing is one area that I am interested in.’
Whiting is careful not to state clear objectives before he has become au fait with the character and machinations of the department. ‘I need to understand what my role is,’ he says. ‘I’m an non-executive and I’m not going in to run x, y and z. I need to get to know it.’
Why HMRC needs to focus on consultation
Yet, he says, he is keen for the Revenue to focus even more on consultation, an area where he says it has already made great strides, but where there is much more to do. Tax policy has been generally good, he argues, when the Government followed its own rules on tax creation. When it circumnavigated them, monsters such as the Higher Rate Child Benefit Charge were born. ‘With that, we got to the answer before we’d asked the question,’ he says.
I suggest that one area where HMRC might improve is to listen as carefully to the needs to small businesses as it does to those of major corporates. ‘If you employ 10,000 staff you are much more likely to have someone to spare to go out for a day to talk to the Revenue,’ admits Whiting. ‘The classic small-business has got five people working for it and they are only going to have the time to talk to the Revenue once in a blue moon.’
Why AAT members should talk to HMRC
He suggests that AAT members – who typically represent clients for the small-business world – could ‘gather together and come and talk to the Revenue’, let it hear the voice of those who don’t have armies of experts fired up and ready to fight their corner on every occasion. That sounds like an open door.
Certainly, Whiting’s strong links within the sector may serve him – and the Taxman – well. ‘I want to be able to say to HMRC: “I am still in touch with the industry”,’ he says. ‘And this is what the tax advisers I have been talking to are saying.’
You sense they will listen.
Ben Walker is editor of Accounting Technician magazine.
Ben Walker is the former editor of Accounting Technician.