A recent lecture given by Dave Hartnett at the ICAEW Tax Faculty Hardman event last week was entitled “Tax, transparency and trust”. Hartnett Dave looked at various aspects of transparency and trust within the tax system, but focusing on transparent behaviour (and indeed the lack of it) by businesses, individuals and firms and the effect that has on mutual trust in tax administration.

In the post dinner discussions, I found myself engaged in healthy debate with fellow diners. My own views on aggressive tax avoidance are no secret, and I proposed that taxation should be in essence a social contract. Taxpayers who benefit from being part of society should accept that the cost of our society must be borne by someone, and that tax is the price we all agree to bear.

Tax collection should make the minimum fuss, but ensure that all who should do pay their share. Those who seek to dodge their liabilities ought to attract opprobrium, not a sly smile that someone has “got away with it”. [1]

But that presupposes that tax law and policy is also transparent. That it is abundantly clear to businesses and individuals alike, both as taxpayers and as the electorate, how much tax they are required to pay. In my view it is long past time that this is clear and unequivocal, and not subject to manipulation by clever tricks and dodges on the part of taxpayers and their advisers.

By the same token both the tax authority and their political masters should also “come clean” on tax. Making it clear what is expected, and in the case of politicians, accepting responsibility for unpopular measures and making clear [2]the policy drivers behind tax initiatives.

Developing logical tax policy that will stand up to debate, and not relying on complexity to disguise tax rises from the electorate.

But such an approach is not possible with the current state of tax legislation in the UK. There are two issues here, which are related. First the complexity of almost every tax that we have; the arcane rules intended to catch every possible situation, merely because they are needed to catch every possible situation.

And still they don’t; and still they come – anti avoidance rules marching ever onwards, creating even more loopholes, which need ever more legislation to close them. The second issue is in our approach to tax law. By retaining a literal approach to the interpretation of legislation we stifle the opportunity to simplify. We can rewrite tax law again and again in ever simpler language, but our tax code remains one of the longest and most complex in the world.

And without a new approach to transparency within the tax system, this consigns us to the same problem for ever – a need to legislate for every eventuality, and still miss some avoidance angles.To be frank (or indeed transparent), isn’t it time someone called a halt?