Carry On CCAB II - The Cost

Accountancy Age reports that cost the changeover from "old" CCAB to "new" CCAB, as the previous corporate structure was liquidated by KPMG, was £10K.

Given that CCAB have not issued a press release since 2009, was this really worth it?

Carry On CCAB

Accountancy Age reports that the Consultative Committee of Accountancy Bodies (CCAB) will continue operate without CIMA.

The ICAEW, ACCA, ICAS, CIPFA and Chartered Accountants Ireland will remain in it.

As I noted in March 2011 CCAB has been rather quiet,  not having issued a press release since 2009; yet still charging fees to its members!

However, Michael Izza (CEO of the ICAEW and CCAB secretary) has stated that it will "provide a unified voice on matters of common interest" he went on to say that the the institutes took a "hard look" at whether it was worth continuing as the CCAB.

"Having soul-searched, we decided to carry on."

Does this mean the same frequency of press releases?

HMRC's Clasper at Council

Mike Clasper (Chairman of HMRC) recently visited ICAEW Council.

Here is a summary of what he said (source ICAEW):

hmrc service standards and tax agent strategy

  

HMRC’s Chairman, Mike Clasper, and Brian Redford, Deputy Director, Business Customer & Strategy, attended the October Council meeting to discuss service standards and the recently published consultation on Tax Agent Strategy.

The decline in service standards is one of the biggest concerns currently being mentioned by the ICAEW membership. Following a highly critical report by the Treasury Select Committee published in July 2011, a meeting was held in September 2011 between HMRC’s senior management and the professional bodies and various charities to discuss what should be done to help make improvements. It was chaired by Mike Clasper and following the meeting a joint statement was published, setting out plans for HMRC to work with the professions and charities to make improvements. Tax Agents have a critical role to play and need a strong relationship with HMRC. At the moment there is a lack of trust that needs to be addressed.

There is understandable concern that promises have been made in the past to improve service standards but they have not been realised. However, the joint statement marks a turning point and shows that HMRC has picked up the challenge issued by the Treasury Select Committee to work with the profession to make improvements.

The biggest problems highlighted are post and telephone handling. The challenge for HMRC and the profession is to jointly understand the nature of the problem, develop solutions to improve the service and find performance measures that accurately reflect the customer experience.

Background

In the past, there have been different views as to how HMRC should recognise agents, with some feeling that the focus of attention should be on the tax payer. HMRC are now clear that strategically the role of the agent should be recognised in addition to the role played by the customer and there is a genuine intention on the part of HMRC to improve relationships with agents.

With the launch of HMRC in 2005, there was a loss of confidence in the organisation from customers as it was felt that it did not have a clear customer centric focus. The foundations for the merger were solid enough. It offered one tax authority for business which is a huge enabler for a customer-centric organisation, a system of dealing with large businesses that is globally competitive and a vast amount of knowledge about tax payers. However, the merger did not fully resolve the cultural differences between the two organisations and needed to deliver efficiency savings at the same time as facilitating a smooth transition from a local to a national organisation.

Following the merger, HMRC’s strategic objectives included:

-       Closing the tax gap

-       Focusing on the customer experience

-       Providing value for money

-       Operating with professionalism

In the 2010 spending review, along with all government departments HMRC was charged with cutting costs by a further 25%, but reinvestment back into HMRC was agreed with a primary focus on closing the tax gap and improving compliance.

In order to achieve HMRC’s strategic goals, there has to be a balance between three key and often conflicting aims:

1.    The tax has to be collected

2.    The customer experience has to be good

3.    HMRC has to be efficient

2010 – A difficult year

Mike acknowledged that 2010 was a difficult year and had said so on the record, but that it had to be seen in context. For HMRC employees, existing systems and processes were becoming outmoded and as configured were not able to provide a single view of a PAYE customer on its systems and this required expensive manual intervention. The system designed to support PAYE was based on 13 regionally defined databases meaning that some people had several records, some of which had not been linked and led to bad data quality and inconsistency. Working with this dated system, people developed ways of getting the right result without inputting the right data which led to further problems. HMRC underestimated the problems that would arise in the move to the new national PAYE system (NPS) and the resources that were needed to tackle them. These problems were only made worse by the resulting high volume of telephone calls that taxpayers and agents made to HMRC.

A related problem was the growing backlog for reconciling PAYE exceptions, which by 2010 had reached 23 million open cases, a problem that dated back to 1983. It was proving impossible to tackle this backlog with the existing systems.

The current situation

Mike explained that over the last few months there had been a considerable turnaround in performance and customers were starting to see the benefits of the NPS investment and other operational changes. Customer contact has improved. This year 70% of calls, on average, are answered within 40 seconds which is a massive improvement on the previous year.

Postal response times are the best they have been since the merger. The average is less than 15 days – calculated from the day the post arrives at HMRC through to when it is posted on HMRC’s system and a response sent. However, Mike accepted that this is not translating to the customer experience and this needs to be addressed. HMRC is also working with its mail partners, Fujitsu and Royal Mail, to cut delays once correspondence leaves HRMC.  But Mike acknowledged that there is more to do in improving the customer experience.

Internally, work is being done to improve professionalism and quality. Training and development is an essential part of this. HMRC is supporting professionalism through the establishment of ‘The Tax Academy’, accredited by Manchester Metropolitan University. This year, some 200 members of staff will commence their training through the academy for full technical training, although it is acknowledged that a wider section of the workforce will undertake other training and continuing professional development.  HMRC recognise some 18,000 members of staff as tax professionals.

Teams have been empowered to improve their own processes through ‘Pacesetter’ methodology and already an improvement in productivity of up to 60% has been seen in some areas.

Work is also being done to cut down on the organisation’s hierarchy. There have been up to 14 approval levels, from frontline staff up to CEO. By March next year there will be no more than eight. The top four tiers of the organisation have also been reviewed. 45% of jobs have been competed with a number filled externally to revitalise the structure and overall numbers reduced.

Up to 8,000 members of staff are also moving from processing to compliance roles in the coming years, which will help to balance the three requirements to achieving strategic goals.

On the performance challenge, HMRC staff members have received the training needed to enable them to go out and observe Tax Agents in their own firms to get a first-hand view of the problems that they are experiencing. HMRC now needs the profession to volunteer to host their staff and help improve standards. At the moment, it was proving difficult to recruit volunteer firms and Mike requested that ICAEW did all they could to promote this initiative. Since the Council meeting a significant number of  ICAEW members and others have stepped forward and the visits are will commence as planned.

Tax Agent Strategy

Allowing agents to ‘self serve’ through an online system should improve the process. By enrolling and understanding the business profiles of tax agents, it will be possible to tailor communication and support.

Through this system, HMRC will now be able to look at all interactions with agents. If there are consistent problems, they can then work with the agents to make improvements, a mutually beneficial process.

 

Conclusion

HMRC has committed to a big challenge. However, improvements can only be made with the input of the profession and it is therefore important that firms come forward to volunteer to host HMRC staff. Council members are strongly encouraged to do so, and take their opportunity to share their experiences.

 

For further information, please contact Frank Haskew, Head of the Tax Faculty, frank.haskew@icaew.com

The Alliance

Congratulations to Anton Colella, the Chief Executive of ICAS, who has been elected Chair of the Global Accounting Alliance (the umbrella body which represents more than 775,000 accountants around the world).

Anton takes up the two-year non-executive position from November.

As I noted back in April 2006, the GAA proves that ICAS and ICAEW can work together!

I also noted the following:

"If you look up the registration of www.globalaccountingalliance.co.uk, you will see that it was registered on 15th September 2005 by the ICAEW.

This was before the merger motion was defeated in October 2005. This implies that the wheels were already in motion for the creation of the GAA.

Why then, if the ICAEW was working towards a global alliance at that stage, did they persist in telling the members that the most effective way of making our voice heard on the world/national stage was via merging with CIMA/CIPFA?

FYI, I have registered www.globalaccountingalliance.org.uk in my name, and will ensure that it redirects to this site in the next 48 hours."

Note, for reasons best known the the GAA and the ICAEW, the www.globalaccountingalliance.co.uk website leads nowhere now  (even though it is still owned by the ICAEW).

Why is that then?

Details about the appointment (below) are provided by ICAS:

The Global Accounting Alliance (GAA) is an alliance of leading professional accountancy bodies. It was created to promote quality services, share information and collaborate on international issues. The GAA works with national regulators, governments and stakeholders to take a global lead for the profession. It is headquartered in Sydney.
The GAA operates in around 165 countries. Its members are The American Institute of Certified Public Accountants (AICPA)
Canadian Institute of Chartered Accountants (CICA)
Hong Kong Institute of Certified Public Accountants (HKICPA)
Institute of Chartered Accountants in Australia (ICAA)
Institute of Chartered Accountants in England and Wales (ICAEW)
Chartered Accountants Ireland (ICAI)
Institute of Chartered Accountants of Scotland (ICAS)
The Japanese Institute of Certified Public Accountants (JICPA)
New Zealand Institute of Chartered Accountants (NZICA)
South African Institute of Chartered Accountants (SAICA)
Institut der Wirtschaftsprüfer in Deutschland e.V. (IDW)

Anton Colella said, "It is a great honour to be appointed as Chair of such a prestigious global body, representing more than three quarters of a million accountants.  This is an interesting and pivotal time for the accountancy profession.  ICAS and the other 10 membership bodies of the GAA collaborate closely to ensure we speak together and are a leading voice on the key international issues that surround our profession.  The shared expertise of the GAA is a gateway for accountants to grow and develop in what is becoming one of the first professions to be truly global.”

Anton was appointed Chief Executive of ICAS in 2006. 

Ruffling Feathers

Anthony Thomas, President of CIOT, may well have ruffled some feathers over at the ICAEW when he recently debunked the nonsense that there is a "special relationship" between HMRC and the professional bodies. He called it a "myth", akin to that "relationship" between the UK and US governments.

Over at the ICAEW, Michael Izza (the CEO) recently stated that "we (the ICAEW) now have a partnership with HMRC".

So, who is right?

Ethics

Visit the ICAEW's Community page on Ethics.

As at the time of writing there were zero posts/comments!

'Nuff said!

Hat tip to Dennis Howlett for pointing that out.

This reminds me of an article about Ethics that I published in 2005.

Newsflash Ethics Coming Soon To ICAEW :)

@ICAEW_talk ICAEW Talk

@craigjwillis @dahowlett @finnern In my haste to set up the ethics blog, created the category before the blog was ready. It's coming soon

Membership Fees

The FCABlog has a handy summary of the fees charged by the various accounting bodies in the UK.

The ICAEW and ICAS come out as the most expensive.

ICAEW Awarded Carbon Trust Standard

ICAEW has been awarded the Carbon Trust Standard, and is the first professional accountancy body to achieve this certification.

"The Carbon Trust standard was achieved following a programme of recording, measuring, and managing ICAEW’s carbon emissions each year between April 2008 – March 2011.

As part of our programme ICAEW installed new lighting systems, controlled by movement sensors, developed a system of switching off plant and equipment during non-operational hours and installed energy efficient water cooling equipment.  These changes on both ICAEW sites in the City of London and in Milton Keynes ensured the right carbon outputs for certification."

I trust that it was time and money well spent, as the Taxpayers' Alliance was of the view last year that the Carbon Trust should be shut down; as their letter (29 September 2010) to Chris Hune clearly states:

"Dear Mr. Huhne,

It has been reported that the Carbon Trust is under review and could be abolished. At the TaxPayers’ Alliance, we’ve done a lot of work on how to deliver spending cuts. Your department needs to find considerable savings and we feel that around £100 million that could be saved by abolishing the Carbon Trust should be one of them for a number of reasons.

The Carbon Trust doesn’t address a genuine market failure. If large businesses can genuinely save money by cutting their energy use, then they have an incentive to do so. Particularly with other policies – such as the Renewables Obligation – increasing energy prices and the introduction of the Carbon Reduction Commitment. If they need external advice to achieve that result, they can pay for it instead of taking money from ordinary taxpayers.

The quality of their advice is suspect. The Royal Borough of Windsor and Maidenhead, recognised as a pioneer for their energy saving work, felt that the advice they received was not reliable. The minutes of their Sustainability Panel record that:

“The Chairman went onto explain that he felt the Council had been sold a wonderful idea but that only a third of the predictions were going to occur which he felt boiled down to the original plan being wildly optimistic.”

The organisation is unaccountable and inscrutable. As the Freedom of Information Act does not apply to the Carbon Trust, taxpayers cannot find out how their money is spent. Staff remuneration is high. Their Chief Executive Tom Delay received remuneration of £237,797 in 2008-09. It is difficult to tell how many staff at the organisation receive high pay thanks to its complicated structure.
 
Three executive partners who manage investment funds for the Carbon Trust at the organisation’s investment management arm CT Investment Partners LLP (Peter Linthwaite, Jonathan Bryers and Adam Workman) appear to be very generously compensated. They paid £50,000 initially for their share in CT Investment Partners LLP and – between the three of them – are now getting £380,000
a year in profit in fees from the Carbon Trust. They work out of the same office and the National Audit Office has raised concerns at potential conflicts of interest, saying that there “is a risk that CAT Investment Partners staff could influence publicly funded research and development or incubator support for emerging businesses that they, in time, may back by way of investment and thus from which they may earn carried interest”.

The Carbon Trust has even expanded to other countries, as if it were a multinational company, through its Carbon Trust International programme. In August 2009 they were advertising for a Head of Carbon Trust USA position. They are working to promote the creation of similar organisations in other countries. This is clearly an inappropriate use of British taxpayers’ money.

The Carbon Trust is therefore subject to considerable mission creep, its main work does not address an actual market failure, it is extremely generous in how it remunerates its staff and fails to match up to the principles of transparency and accountability articulated by the Government. While it is possible to conceive of reforms that might improve the organisation, the best way of securing value for taxpayers is to abolish it outright.

Yours sincerely,

Matthew Sinclair
Director
TaxPayers’ Alliance "

Here's what the FCAblog thinks of this absurd waste of time and money:

"Er, wtf mates? Could you maybe go for a Plain English Standard next time, because that's the biggest load of management-speak cobblers I've ever read. "Quantify our footprint"? "Benchmark our performance"? This is obfuscation of the highest order.

If you really want to know what this all means, there's some documentation over at the Carbon Trust's website, including the full standard. Basically, ICAEW is using less carbon than it was in 2008. But carbon measurement is a curious science. For example, the graph of carbon emissions by country says that China is the 'worst' emitter. Yet most of China's emissions relate to production of goods which are then consumed elsewhere in the world. So while Brits throw lots of shit away, China gets the blame for it, carbon-wise. And the other big scam is carbon offsets, where you pay someone who might pollute to not pollute, so that you can instead. It's the discredited system of indulgences, reinvented for the 21st century.

Of course, saving money is A Good Thing. So why not just say that that's what they're doing - they're turning lights and the air conditioning off at Moorgate Place because it means the subscription won't have to go up as much next year? I'm sure members would love that. 

One can only hope that more will be made clear when ICAEW publishes its annual review in spring next year. In the mean time, if you want to undertake a futile gesture, you can always 'vote down' the article on ICAEW's website. Go on, you know you want to..."

Diluting The Brand Via The Back Door

The ICAEW has announced plans to work more closely with the Institute of Certified Accountants of Kenya (ICPAK) and has signed a Memorandum of Understanding (MoU).

The MoU enables qualified ICPAK members to apply for ICAEW membership subject to certain requirements, which include passing ICAEW’s Advanced Stage examinations and attaining a period of work experience with an ICAEW Authorised Training Employer.

ICAEW members can apply for ICPAK membership subject to passing Kenya tax and law papers delivered by Kenya Accountants and Secretaries National Board.

It seems that the ICAEW is intent on growth by numbers, irrespective of the fact that the method chosen dilutes the brand.

HMRC Service Delivery - The Coal Face

I have asked for views from the coal face (HMRC staff) as to the likelihood of the Joint Statement on Service Levels achieving anything.