Annual report and accounts 2004 - The Chartered Institute of Taxation

Annual report and accounts 2004 

Technical Standards Education 

Branches Low Incomes Tax Reform Group 

Treasurer’s Membership Tax Adviser 

IT and Website Governance 

The professional 

body for Chartered 

Tax Advisers 

Registered as a Charity 

No 1037771

Strategy 2005 

The Chartered Institute of Taxation’s long term strategy, which 

was adopted in January 2000, is to become the leading 

Institute for taxation professionals in the United Kingdom, 

through the pursuit of excellence and integrity. 

Our targets are as follows: 

• that membership of the Institute is regarded by the majority of 

existing and aspiring tax advisers as essential to their careers 

• that membership of the Institute is regarded as the preferred 

qualification for their employees by employers of tax advisers 

• that regulators and administrators of tax law regard the 

Institute as the preferred body for consultation 

• that consumers of tax advice prefer to take their advice from a 

Chartered Tax Adviser 

• that the Institute is established as the primary catalyst of wellinformed 

public opinion on tax matters and tax education, 

particularly as it relates to taxpayers on low incomes. 

ifc2

Contents 

Council members page 2 

President’s statement page 3 

Annual report of the Council page 6 

Technical page 9 

Branches page 12 

Education page 14 

Low Incomes Tax Reform Group page 18 

Standards page 20 

Membership page 22 

Information Technology and Website page 24 

Treasurer’s report page 25 

Institute governance page 27 

Council members’ responsibilities page 30 

Independent Auditors’ report page 30 

Financial statements page 32 

Committees of Council page 44 

Notice of Annual General Meeting page 46 



Tax Advisers

Council 2004 -2005 

President John Beattie CTA (Fellow) ATT (1996) 

Deputy President Peter Kempster BA CTA (Fellow) FCA Solicitor (1993) 

Vice President John Cullinane MA CTA (Fellow) ACA (1997) 

Registered office 

12 Upper Belgrave Street 

London SW1X 8BB 

Chartered Institute of Taxation Annual report and accounts 2004 

Tim Ambrose* MA CTA (Fellow) FCA (1995) 

Mohammed Amin MA CTA (Fellow) FCA AMCT (2003) 

John Andrews* OBE CTA (Fellow) FCA ATT (2003) 

Deborah Annells BSc (Econ) CTA (Fellow) ACA FHKSA FTOHK (2004) 

Colin Ben-Nathan MA (Cantab) CTA (Fellow) FCA (2002) 

Stephen Coleclough LLB (Hons) CTA (Fellow) FInstCPD FRSA Solicitor (2000) 

Paul Connolly BA (Hons) CTA (Fellow) AIIT (2003) 

John Dewhurst LLB CTA (Fellow) BCL (2001) 

Nigel Eastaway CTA (Fellow) FCA FTIHK FCCA FCMA FCIS FHKSA (2003) 

Robert Ellerby MA CTA (Fellow) FCA (2001) 

Phillip Gillett BSc CTA (Fellow) ARSM FCA FCT (2004) 

John Gilmour CTA (Fellow) CA ACIArb TEP (2004) 

Nick Goulding BSc CTA (Fellow) FCA (2003) 

Penny Hamilton* LLB CTA (Fellow) Barrister (1997) 

Peter Horsman CTA (Fellow) FCA ATT (1995) 

Andrew Hubbard BMus CTA (Fellow) ATT (2004) 

Jean Jesty BA CTA (Fellow) ATT (1995) 

Chris Jones BA (Hons) CTA (Fellow) ATT (2004) 

Natalie Miller CTA (Fellow) ATT (2004) 

Paul Morton BSc (Hons) CTA (Fellow) (2000) 

Jenny Nelder BA (Hons) CTA (Fellow) FCA (2005) 

Yvette Nunn CTA (Fellow) ATT MAAT (2004) 

Vincent Oratore LLB (Hons) CTA (Fellow) (1996) 

John Preston BSc CTA (Fellow) FCA (1995) 

Anne Redston MA (Oxon) CTA (Fellow) FCA (1999) 

Ian Richardson BSc CTA (Fellow) FCA (1995) 

Philip Ridgway BA (Hons) LLM CTA (Fellow) Barrister (2000) 

John Roberts BA (Hons) (Dunelm) CTA (Fellow) FCA (1999) 

Patrick Stevens CTA (Fellow) FCA (2003) 

Anthony Thomas CTA (Fellow) FCCA ATT (2003) 

Robert Venables QC MA (Oxon) LLM (London) CTA (Fellow) (1999) 

John Whiting* BSc CTA (Fellow) FCA (1990) 

Year of appointment to Council shown in brackets. * indicates Past President 

Secretariat Management Board 

Secretary-General Robert Dommett BA FCIS FCIB MCIPD FRSA 

Deputy Secretary Jonathan Crump FCA 

Head of Education Rosalind Baxter BA (Hons) 

Head of IT and Central Administration Maureen Davis MIMIS MInst.AM 

Head of Finance Steve Hines ACCA AAT 

Head of Technical Bianca Marsden BSc (Hons) 

Head of Membership and Branches Phillip Pearson MA 

Connected Charity 

The Association of Taxation 

Technicians 



Bankers 

HSBC 

19 Grosvenor Place 

Hyde Park Corner 

London SW1X 7HT 

Auditors 

Baker Tilly 

Registered Auditor 

2 Bloomsbury Street 

London WC1B 3ST 

Solicitors 

Allen & Overy 

One New Change 

London EC4M 9QQ 

Investment Advisers 

Deloitte & Touche 

Wealth Management Limited 

180 Strand 

London WC2R 1BL 

Actuaries 

Mitchell Consulting 

Albion Wharf 

Albion Street 

Manchester M1 5LN 

Registered as a Charity 

No.1037771 

2

John Beattie 

President 

President’s statement 

2004 was another successful year 

purpose. Our examination 

three candidates successfully 

for the Institute. It was the year 

continues to demand a 

completed all the components to 

in which we began organising 

comprehensive knowledge of all 

be awarded the Diploma and may 

our 75th Anniversary 

the major aspects of the UK tax 

now use the designatory letters 

celebrations. This gave us the 

system. The structure of our exam 

ADIT. In addition, Council are in 

opportunity to look at the 

now takes into account that 

the process of drawing up the 

history of the Institute, at the 

specialisation is becoming more 

appropriate regulations which will 

events and the individuals that 

prevalent at an earlier stage in 

allow such successful candidates to 

played a part not only in our 

one’s tax career and I hope that 

apply to become an International 

own growth but also in the 

makes membership of the Institute 

Tax Affiliate of the Institute. 

history of the taxation profession 

more relevant to a wider cross- 

in the UK and wider. Many of 

section of individuals. In 2004 

Council are very encouraged with 

these individuals and events are 

approximately 530 students were 

the initial interest in ADIT. We 

depicted in the 75th Anniversary 

successful in our exam and I very 

hope that by forming links with 

calendar which was sent to each 

much enjoyed meeting many of 

other Tax Institutes around the 

member in December 2004. 

them at our Admission Ceremonies 

world it will continue to develop. 

and welcoming them as members 

By doing this we will be able to 

Continuing Objects and Values 

of the Institute. 

offer a wider selection of papers on 

On formation back in 1930, the 

other countries’ tax systems 

main objects of the then Institute 

The pass rate of our exam is, 

resulting in ADIT becoming a 

of Taxation were, in brief, to 

however, disappointingly low. In 

highly recognised international tax 

promote the study of taxation, 

both sittings in 2004 this was 

qualification. 

hold examinations, facilitate the 

around 40%. There are many 

exchange of information, make 

representation to the tax 

authorities and to maintain a high 

standard of professional conduct. 

Time has moved on but all of these 

objects and values still hold firm 

today. They will all be at the 

forefront of our thinking when we 

begin this year to formulate our 

strategy for the next five years. 

Demanding CTA Examinations 

At the start of my Presidential year 

I focused upon two key areas, 

Education and Membership. As a 

charity, education has always been 

at the heart of our activities and 

reasons for this, the complexity 

and ever increasing volumes of tax 

legislation and the facility of 

training not being available to 

enough of our students, are but 

two. There is little we can do 

regarding the former but I hope we 

will continue to strive to promote 

and increase the training available 

to our students. 

ADIT Launched 

In 2004, around 30 candidates sat 

either one, two or all of the papers 

in the Advanced Diploma in 

International Tax (ADIT). This was 

the first exam sitting of ADIT and 

Meeting 13,000 Members’ needs 

Looking after the interests and 

needs of our members must always 

be at the top of our agenda. It is a 

well worn phrase, but nevertheless 

true – The Institute is its members – 

of which we now have over 13,000. 

I have no doubt that our tax 

system will continue to be very 

complex, specialism will become 

more and more prevalent and our 

members will come from more 

diverse and varied professional 

backgrounds. Over the past year 

much resource has been put into 

meeting the needs of as many 


3


The First International Metropolis Certified 

Public Tax Accountants’ Summit held in 

Tokyo, Japan on 16 and 17 June 2004. The 

President, John Beattie (fourth from right) and 

Deputy President, Peter Kempster (first right). 

The President’s 75th Anniversary 

Luncheon on 11 January 2005 launched 

the 75th Anniversary celebrations of the 

Institute. 

The outgoing President, in spring 2004, 

Tim Ambrose, presents a magnum of 

champagne to Dr Maria Fiorini, the 

Institute’s 13,000th Member. 

categories of members as possible. 

and are no doubt invaluable for all 

Improving the Tax System 

The tool kit which we launched for 

of the members in that area. I did 

through Consultation 

sole practitioners was well received 

not give any technical lectures 

The Institute’s motto, Justice 

and is being followed up in April 

during the year so I was able to sit 

between Crown and Citizen, 

2005 by a CD Rom for all our 

back, enjoy and learn from the 

summarises our principal role of 

members. I believe the CD Rom has 

many excellent speakers. At every 

seeking to ensure fairness between 

the capacity to be one of the most 

Branch I visited I was hugely 

the state and the taxpayer. I hope 

useful products we have developed 

impressed by the commitment and 

that during my Presidency we have 

in that it brings into one domain 

enthusiasm of all the Branch 

continued to make our voice heard 

everything you need to know or 

officers, Committee members and 

in the corridors of power. The 

want to have regarding the 

CTA’s whom I met. The Institute is 

merger of The Inland Revenue and 

Institute. 

privileged to have such a dedicated 

HM Customs and Excise will 

and enthusiastic group of 

present a new challenge for us all 

Corresponding with our members 

volunteers at Branch level. Let me 

and the increased responsibility in 

is a very important part of our 

assure every one of you that your 

the Treasury in the area of Tax 

activities and one which I hope I 

contribution to the Institute is 

Policy will mean the forging of 

have been able to continue to 

greatly appreciated. 

new relationships while 

progress during the year. CTA 

maintaining those we have built 

News now appears in Tax Adviser 

Although not in 2004, I have just 

up over the years with The Inland 

on a monthly basis. We have made 

returned from an inaugural 

Revenue and HM Customs and 

significant progress in electronic 

conference for Branch officers. This 

Excise. Our main focus will 

communication during the year, 

was a truly worthwhile venture and 

continue to be to use as much 

not only in interacting with our 

the feedback from all who attended 

resources as possible to improve 


members but also with all other 

interested parties. Our new IT and 

Website committee have been very 

busy in redesigning the website 

and I know that the end result will 

be a much more user-friendly and 

informative website. 

Branches Enthusiasm 

By far the most rewarding aspect of 

communication has been my visits 

to the Branches. It is by visiting 

the Branches that you get at first 

hand the views of our members. 

The programmes of lectures which 

are organised by our Branch 

officers are of the highest standard 

concurs with that view. 

Active Volunteers 

The work of our volunteers is not 

restricted to those involved in our 

Branches. Much of the Institute’s 

work is carried out by a huge band 

of volunteers who are actively 

involved in all manner of 

committees or projects. We are 

extremely fortunate that in an 

environment where professional 

responsibilities continue to grow so 

many people willingly give of their 

time and energy to help the 

Institute in particular and the tax 

profession in general. 

our tax system and to be at the 

forefront of the consultation 

system. It is clear that the most 

effective law is usually the product 

of a proper consultation 

process. On the other hand, 

legislation which is brought in 

with either limited or no 

consultation is more likely to be 

both ineffective and unworkable. 

You will note from the report of 

our Technical Committee that 

once again they were extremely 

busy throughout the year. 

4


Robert Venables QC giving the CTA 

Address 2004 on the subject of “Property 

– A Neglected Human Right”. 

At the President’s Reception – from left to 

right: Heather Beattie, John Beattie 

(President) and Christine Glyn. 

John Beattie, President (front right) and 

Peter Kempster, Deputy President were 

the CIOT’s representatives at the CPTA 

Summit in Tokyo. 

Strategic Alliance Partners and 

Marketing 

The Institute’s marketing activities 

have been greatly assisted by our 

Strategic Alliance partners. Especial 

thanks are due to CCH, LexisNexis 

UK and FT Interactive Data. Their 

continuing support is much 

appreciated. 

Thank You 

In conclusion, I would like to say a 

huge ‘Thank you’ to so many people 

who gave me support and 

encouragement during my year of 

office. To the Partners and tax staff 

in KPMG Belfast, without whose 

encouragement I would never have 

been able to contemplate carrying 

out the role of President; to all 

members of Council, in particular 

my fellow officers, Peter, John and 

Tim, whose active support and 

comradeship have made my year so 

enjoyable. A special thank you to 

John Whiting, one of our past 

Presidents who this year leaves 

Council having served for 15 years. 

John has made an enormous 

contribution to the workings of so 

many aspects of the Institute. I 

know we will be able to continue 

to benefit from his support and 

wise counsel. 

To all the Chairpersons and 

members of our various 

committees, and sub-committees, a 

very big ‘Thank you’. As I have 

said, the time and effort you give is 

invaluable. Also a big thank you to 

Marrion, Marian and Moira who all 

did an excellent job in keeping me 

organised throughout the year. 

The Institute would not be as 

successful without all the work 

done by Bob Dommett, the 

management board and all the staff 

at 12 Upper Belgrave Street. It has 

been an absolute joy working with 

each of them over the past year. 

Thank you most sincerely for all 

your support and encouragement. 

Inevitably, the role of President 

means spending time away from 

home, especially when home is 

Belfast. So finally I would like to 

thank my wife Heather for her 

unfailing support and 

encouragement over the past year. 

The Institute is in good health and 

well placed to meet all the 

challenges which lie ahead. Our 

75th Anniversary will allow us to 

look back with pride on the 

achievements of the past. 2005 will 

also be the year in which we plan 

for the future. I have every 

confidence that our reputation in 

the professional world will 

continue to grow. 

John Beattie 

President 

Front cover of the 75th Anniversary Calendar, which launched the 75th Anniversary 

celebrations. The Calendar was sent out to Members in December 2004. 


5

Annual report of the Council 

The incoming President, John Beattie, 

presenting the outgoing President, 

Tim Ambrose, with a presidential scroll 

to mark his service to the Institute at the 

2004 Annual General Meeting. 

Voting at the eleventh Annual General 

Meeting of the CIOT on the Resolution 

regarding the Annual Report and 

Financial Statements. 

At the President’s 75th Anniversary 

Luncheon – Barbara Harewood, East 

Midlands Branch with Yvette Nunn, CIOT 

Council Member. 



The Council Members present their 

Annual Report to the members on 

the affairs of the Institute, 

together with the audited financial 

statements for the year ended 

31 December 2004. 

Results for the year 

The net incoming resources before 

revaluations and full provision for 

all pension liabilities for the year 

ended 31 December 2004 of 

£623,000 (2003 – £289,000) is 

shown in the Statement of 

Financial Activities on page 32. 

Gains on investment revaluations 

amounted to £103,000 (2003 – 

£139,000). A review of Committee 

activities and their achievements is 

contained on pages 9 to 26. 

Legal and administrative details 

The Institute of Taxation was 

founded in 1930 initially as an 

unincorporated association before 

registration as a company limited 

by guarantee. It was registered as a 

charity in 1982 (registered charity 

number 1037771). In 1994 it 

transferred all its net assets by way 

of donation to the Institute of 

Taxation, a company incorporated 

by Royal Charter. In the same year 

it changed its name to The 

Chartered Institute of Taxation. 

Principal objects 

The Institute was established to 

advance public education in, and 

promote the study of, the 

administration and practice of 

taxation. To do this it: 

• makes recommendations to 

improve or simplify tax law and 

practice; 

•maintains standards of 

professional conduct for 

Chartered Tax Advisers; 

• runs residential conferences and 

one-day courses; 

• publishes the monthly journal, 

Tax Adviser; 

• issues annotated copies of 

Finance Acts and other Acts; 

• runs, through its Branches, 

technical meetings and social 

activities; 

• holds examinations throughout 

the UK twice a year; and 

•encourages the preparation of 

theses and research on taxation 

topics. 

Governance and internal control 

The Council members listed on 

page 2 are all Trustees of the 

Institute and a governance 

statement is set out in pages 27 

to 29. 

Staff and volunteers 

It is the Institute’s policy to train, 

develop and motivate staff and 

volunteers, ensuring equal 

opportunities for all. 

All staff are jointly employed by 

The Chartered Institute of Taxation 

and The Association of Taxation 

Technicians and the average 

number of employees in the year 

was 49 including twelve part-time 

staff (2003 – 48). 

Institute Members are encouraged 

to become involved in our 

activities and there are 

approximately 400 unpaid 

volunteers on Council, 

Committees, Sub-Committees and 

Working Parties. The Institute is 

grateful not only for their generous 

input at meetings and other 

activities, but also for their firms 

who ultimately bear the financial 

cost. It is estimated that over 

21,000 volunteer hours were 

provided during the year. The value 

to be placed on this resource 

cannot be readily calculated and is 

not therefore recognised in the 

statement of financial activities. 

Safety and environment 

The nature of the Institute’s 

activities mean that employees do 

not encounter many hazards in the 

work place. However, safety receives 

constant management attention 

and a general policy statement of 

health and safety at work is 

included in the staff handbook. 

Risks are regularly assessed and 

include independent checks on 

electrical and mechanical 

equipment and water quality. 

6


Hubert Hamaekers, Past Chairman, Board 

of Management, International Bureau of 

Fiscal Documentation being presented 

with his Honorary Fellowship certificate 

by The President. 

Reception for new Chartered Tax Advisers 

and their families in the Guildhall Art 

Gallery. 

Quentin Davis MP, proposing the Toast to 

The Chartered Institute of Taxation at the 

President’s Luncheon. 

Donations, legacies and other 

incoming resources 

The Institute is supported by 

subscriptions and fees from 

members, students, and the public 

and receives grants from 

organisations for specific 

charitable projects. 

Grant Making policy 

The Institute does not make 

donations to funds of political 

parties. Grants are made only to 

organisations with common, 

parallel or related objectives and 

activities. 

Reserves policy 

The Council has assessed the risks 

involved in the activities of the 

Institute and has agreed the 

following reserves policy: 

•Provide financial stability and the 

means for the development of the 

Institute’s principal activity; 

• Retain a sufficient level of net 

current assets or other readily 

realisable fixed asset investments. 

The sum required is gross annual 

incoming resources; and 

• Set aside designated sums to be 

used for future expenditure but to 

retain the power to reallocate 

these funds within unrestricted 

funds unless and until expended. 

Unrestricted funds have been 

designated for the following 

purposes: 

Premises 

To establish a fund to cover 

dilapidations and relocation 

costs. 

Tony Arnold Library 

To improve library facilities and 

thereby increase its usage. 

Examination Prizes 

To finance the purchase of high 

quality silver gilt engraved 

medals for presentation to 

examination prize winners. 

Disciplinary Procedures 

To establish a fund to cover the 

unpredictable future costs of 

investigations and disciplinary 

hearings by The Taxation 

Disciplinary Board. 

Investment policy 

The Institute’s powers of 

investment are set out in the Royal 

Charter which states that: monies 

of the Institute not immediately 

required for any of its objects may 

be invested in such manner as may 

be prescribed by the Byelaws. The 

Byelaws state that the Council may 

invest any monies belonging to or 

held by the Institute in such stocks, 

funds or securities as the Council 

shall from time to time think fit 

anywhere in the world, subject to 

the provisions of the law relating to 

investment by Trustees. The 

Council has assessed the risks 

involved in the activities of the 

Institute and agreed the following 

investment policy which is 

included in a document called ‘The 

Principles Governing the Insitute’s 

Investment Decisions’ contained in 

the Council Members’ Handbook: 

•Take independent investment 

advice on all longer-term 

investments; 

• Regularly review the value of 

funds the Institute requires to be 

held in investment, short-term 

deposits and cash, to ensure that 

they are adequate to meet the 

obligations identified in the 

Institute’s strategic development 

plan, Strategy 2005; 

•Regularly review with its 

investment advisers the 

performance of longer-term 

investments; and 

• Invest liquid assets in short-term 

low-risk investments. 

Officers and Council members 

In accordance with the Royal 

Charter and its Byelaw 5(2)(b), at 

least three-quarters of the total 

number of members of the Council 

shall be elected by the Members. 

Under Byelaw 5(3), Council may 

co-opt members to the Council in 

addition to the elected members, 

provided that the number of coopted 

members does not exceed 

one-third of the number of elected 

members of the Council, 

disregarding any vacancies. 

John Beattie was elected President, 

Peter Kempster was elected Deputy 

President and John Cullinane 

elected Vice-President, and all held 

office from the Annual General 

Meeting on 11 May 2004. 

The following elected members of 

the Council retire by rotation 

under Members’ Regulation 30: 

Colin Ben-Nathan 

Stephen Coleclough 


7


LexisNexis UK Tax Awards 2004 – John Whiting, 

retiring Council Member (second from left) wins 

Tax Writer of the Year. The award was presented by 

Malcolm Gunn, Editor of Taxation (second from 

right) and Martin Casmir, Channel Director, 

LexisNexis UK (first right). Clive Anderson, TV 

Personality (first left) was the host for the evening. 

New CIOT Council Member, Natalie 

Miller, participating in “The Merchant of 

Venice” at the President’s Reception at 

the Theatre Museum in London, October 

2004. 

John Beattie, incoming CIOT President 

and Andrew Hubbard, ATT President 

awaiting over 100 guests for the Joint 

Presidents’ Luncheon at Belfast 

Waterfront Hall February 2004. 


Peter Kempster 

Paul Morton 

Vincent Oratore 

Anne Redston 

Ian Richardson 

John Roberts 

Robert Venables 

John Whiting. 

Colin Ben-Nathan, Stephen 

Coleclough, Peter Kempster, Paul 

Morton, Vincent Oratore, Anne 

Redston, Ian Richardson, John 

Roberts and Robert Venables offer 

themselves for re-election. 

John Whiting is leaving Council on 

10 May 2005. 

John Whiting has served on 

Council since 1990. He was 

President in 2001-2002. John’s 

Presidency focused upon the 

change of designatory initials from 

ATII to CTA, raising the profile of 

Chartered Tax Adviser, increasing 

communication with Members, 

improving the tax system 

including propounding the idea of 

a Tax Practice Committee as an 

oversight body for the tax system 

as a whole and a new initiative 

upon a schools tax education 

programme. John has been a past 

Chairman of Technical Committee 

and the Marketing and 

Communications Committee and 

is currently Chairman of the Tax 

Policy Sub-Committee. 

Since the last Annual General 

Meeting Phillip Gillett, Andrew 

Hubbard, Natalie Miller and Jenny 

Nelder have joined the Council . 

They will retire under Byelaw 5(3), 

Members’ Regulation 29 and offer 

themselves for re-election. 

Phillip Gillett is Vice-Chairman of 

Corporate Tax Sub-Committee and 

a member of the Treasurer’s 

Committee. 

Andrew Hubbard is a member of 

the Technical Committee and the 

Joint CIOT and ATT Officers and 

Secretaries Forum. He is a past 

President of the Association of 

Taxation Technicians. 

Natalie Miller is a member of the 

Branches Forum and a past 

Chairman and past Secretary of 

Norwich Branch. 

Jenny Nelder is a member of 

Membership Committee and a past 

Chairman and past Secretary of 

Severn Valley Branch. 

The other Council members listed 

on page 2 of this Report also served 

on the Council. The Officers 

appointed for 2005-2006, who will 

serve from 10 May 2005 are Peter 

Kempster as President, John 

Cullinane as Deputy President and 

Robert Ellerby as Vice-President. 

Payment of suppliers 

The Institute is committed to 

paying suppliers promptly and 

aims to pay within 30 days of 

receiving a valid invoice, unless 

other specific arrangements apply. 

Auditors 

The auditors, Baker Tilly have 

expressed their willingness to 

continue in office and a resolution 

for their reappointment as auditors 

to the Institute will be proposed at 

the Annual General Meeting on 10 

May 2005. 

Annual General Meeting 

A separate notice at the end of the 

Report and Accounts explains the 

business to be considered at the 

Annual General Meeting on 10 

May 2005. 

This Report was approved by the 

Council on 14 March 2005 

By order of the Council 

Robert Dommett 

Secretary-General 

14 March 2005. 

8

Nigel Eastaway 

Chairman, 

Technical 

Committee 

Technical 

Technical 

2004 was again a very busy year for 

members of Parliament. Our thanks 

Peter Nias chaired the International 

the Technical Committee: we 

go to Quentin Davies, the Institute’s 

Tax sub-committee, which liaised 

received 127 invitations to 

Parliamentary adviser, for making 

with Revenue Policy International 

comment, considered all of them 

this possible. The Institute’s 

and also reviewed communications 

and responded to the vast majority. 

Technical Officers have helped us 

with the European Commission and 

The CIOT initiated 48 proactive 

enormously, with Charles Barcroft 

the Confédération Fiscale 

papers and requests for clarification 

being responsible for indirect taxes 

Européenne. The European scene is 

and had many meetings with the 

and the Small Business Working 

becoming more and more 

Revenue and Customs. It also 

Group, Colin Davis for corporation 

important. We are delighted that 

established links with HM Treasury. 

tax, international tax and the EU 

Paul Morton is taking over the 

The merged HM Revenue and 

and Human Rights working group, 

Presidency of the CFE in 2006 and 

Customs has now become a reality; 

Liz Lathwood for personal taxes, 

Stephen Coleclough, who will be 

we are maintaining old links and 

including tax credits where we work 

taking over the chairmanship of the 

forging new ones as the new 

closely with LITRG, and John 

Technical Committee, will also 

structure for tax policy and 

Stockdale, who took over during the 

chair the CFE Fiscal Committee. 

administration develops. We are 

year from Claire Murray as technical 

Other matters considered included 

grateful for the co-operation of the 

officer for capital taxes. The vital 

the Mutual Assistance Directive, 

Revenue authorities in enabling this 

administrative support for the 

transfer pricing, double taxation 

dialogue to take place; although 

Technical Committee volunteers is 

agreements, Societas Europaea, the 

our views are not always heeded, 

provided by the indefatigable 

impact of ECJ decisions, home state 

we do at least have the opportunity 

Bianca Marsden and her assistant 

taxation, a common consolidated 

of making them known. We have 

Severin Alexander. We are indeed 

tax base, cross-border mergers, 

given evidence to the Treasury sub- 

fortunate to have so many members 

attribution of profits to permanent 

committee on the administrative 

cost of taxpayer compliance and to 

the National Audit Office on the 

working of inheritance tax and the 

filing of tax returns. We have 

worked closely with the 

Department of Trade and Industry 

in connection with small businesses. 

Budget representations have been 

made and discussed with HMRC 

and our comments on the Finance 

Bill have been made available to 

members of Parliament on the 

Finance Bill Standing Committee 

and discussed with a number of 

prepared to give so much time, 

gratis, to try to make the tax system 

work as effectively as possible. 

Review of Sub-committees 

The Corporate Tax sub-committee 

was chaired by John Cullinane and 

Lakshmi Narain during the year and 

dealt with such matters as 

international accounting standards, 

property derivatives, interest and 

royalties, research and development 

tax credits, foreign partnerships, 

stamp duty land tax appeals, 

associated companies, authorised 

investment funds and CT reform. 

establishments, harmful tax 

competition and the debt equity 

distinction, and the Arbitration 

Convention. 

The Personal Taxes sub-committee 

was chaired by Anne Redston and 

worked closely with the Capital 

Taxes sub-committee on the 

modernisation of trusts and preowned 

assets, where our 

representations were submitted 

jointly with the Tax Faculty of the 

ICAEW. Other matters dealt with 

included the harmonisation of tax 

and NICs and tax credits. 


9

Technical 

Fantasy Budget Competition 2004. Left 

to right: The winning A-level pupils from 

Liskeard School, Cornwell with Dawn 

Primarolo, Paymaster General. 

Meet the Tax Press – John Whiting 

(centre) discusses the current hot topics 

with, on the left, James Bennett of 

Accountancy Age and Sed Crest of 

Euromoney. 

International Tax Review journalists Simon 

Briault (left) and Ralph Cunningham 

(centre) interview Peter Kempster, 

Deputy President (right). 

Involvement with the Tax Law 

tax, economic double taxation in 

Institute of Chartered Accountants of 

Rewrite continued and the Income 

the field of VAT, the proposed one- 

Scotland on quick wins and 

Tax (Trading and Other Income) Act 

stop shop for business-to-consumer 

simplifying the tax system. 

2005 has resulted from this work. NI 

supplies and partial exemption. 

deficiency notices, the new 

Francesca Lagerberg took over the 

Construction Industry Scheme, the 

Simon McKie chaired the Capital 

chairmanship of the Small Business 

self-assessment return and the new 

Taxes sub-committee, which was 

Working Group. This is beginning 

short return, status enquiries and 

heavily involved with the pre- 

to be taken seriously by HMRC and 

the ongoing problems with IR35, 

owned assets and modernisation of 

the DTI. 

were among other topics 

trust taxation proposals and 

considered. The new tax regime for 

responding to consultation on trust 

Other activities 

pension schemes, and the 

management expenses. It 

Working Together was led, on 

regulations thereunder, were subject 

participated in the Small Business 

behalf of the CIOT, by Richard 

to review. Much time was spent 

Seminar, and other matters 

Mannion and, to try and improve 

trying to clarify the application of 

considered included roll-over relief 

its effectiveness, a number of sub- 

the settlement provisions to small 

and principal private residence 

groups were established in relation 

businesses, which failed to produce 

restrictions, consultation on taper 

to, for example, agent 

the guidance which we considered 

relief, allowable expenses of 

authorisation, contacting the 

was required and led to the 

personal representatives and 

Revenue and working together at a 

publication of Guidance to 

corporate trustees, and the Law 

local level. Jane Moore took on the 

Members jointly with the other tax 

Commission paper on capital and 

role of technical officer for Working 

professional bodies and supported 

income in trusts. 

Together. Working Together with 

by the Federation of Small 

Customs is beginning to take off. 


Businesses. More success, however, 

was achieved with discussions with 

the Revenue on the application of 

discovery, following Langham v 

Veltema, which resulted in Revenue 

guidance published just before 

Christmas. 

The Indirect Taxes sub-committee 

was chaired by Maric Glaser and 

dealt with matters relating to 

exports and removals, land and 

property, simplified import VAT 

accounting, VAT groups, the 

disclosure of VAT avoidance 

schemes, the future of the option to 

The Tax Policy sub-committee was 

chaired by John Whiting and, as this 

is the group looking to the future for 

what the tax system should be, it was 

a delight to be able to strengthen the 

ties with the Institute for Fiscal 

Studies when Robert Chote joined 

the sub-committee. A number of 

topics were discussed including 

resasonable business expenses, tax 

planning and tax avoidance, 

disclosure, merging income tax and 

NICs, taxing by law and untaxing by 

concession, and liaison with HM 

Treasury and HMRC. We have also 

been working together with the 

The CIOT is also represented on a 

number of joint committees with 

HMRC including the Operations 

Consultative Committee, the 

Corporation Tax Operations 

Consultative Committee, the Better 

Regulation Consultative 

Committee, the Employer- 

Employee Consultative Group, the 

Joint VAT Consultative Committee 

and other ad hoc working groups. 

The Technical Committee has a 

number of other sub-groups such as 

those dealing with pensions, 

research and development, 

10

The Joint Conference with the Inland 

Revenue in October 2004 on “Rights and 

Responsibilities” facilitated valuable 

exchanges on tax policy issues. 

The Joint Conference with the HM 

Customs and Excise in October 2004 on 

“Rights and Responsibilities” facilitated 

valuable exchanges relating to Customs 

and Excise issues. 

Stephen Coleclough (second from left), Vice- 

Chairman of CIOT Technical Committee, wearing 

his Chairman of CFE Fiscal Committee hat, at the 

CFE Forum. A paper by Veronique Lenoir from 

France had just been presented on the state of VAT 

50 years after its introduction in France. Also 

present: Ray Sidders, Global Head of VAT at 

Citigroup and Stephen Bill of TAXUD. 

e-commerce, stamp duties, charities, 

EU and Human Rights, the 

Construction Industry Scheme, 

Residence and Domicile, CFE/EU 

Liaison, Tax Tribunals, International 

Accounting Standards, Interest and 

Royalties, Property taxes, IAS debt 

and derivatives and disclosure. 

Conclusion 

In 2004 the opportunity was taken 

to use e-mail to bring members’ 

attention to important matters 

requiring immediate consideration 

in relation to the non-corporate 

distribution rate, the settlement 

provisions and the guidance on 

discovery. It is hoped that members 

will ensure that the Institute has 

their e-mail addresses, so that 

they may benefit from urgent 

communications which it is not 

practicable to distribute by other 

www.cfe-eutax.org 

Registre Européen des Conseils Fiscaux – pour que les clients vous 

trouvent plus facilement. 

European Register of Tax Advisers – the easiest way for clients to find you. 

Europäisches Register der Steuerberater – damit die Mandanten Sie 

leichter finden. 

Enregistrez-vous! 

Register today! 

Lassen Sie sich eintragen! 

www.cfe-eutax.org/register 

means. The Technical Committee 

produces a monthly Activity 

Report for Council and Branches 

which is on the Institute’s website, 

as are press releases, technical 

articles, technical consultations, 

the Newsdesk, Working Together, 

research papers and details of the 

various committees, subcommittees 

and working groups. 

I would like to conclude with a 

personal note of thanks to all 

those who have helped to make 

my second stint as Chairman of 

the Technical Committee so 

enjoyable and for the massive 

support I have been given by so 

many people. 


Chairman 

Conseils fiscaux en Europe 

Tax Advisers in Europe 

Steuerberater in Europa 

CIOT is one of the two UK representative bodies on the Confédération 

Fiscale Européenne (CFE). 

Confédération Fiscale 

Européenne 

The Chartered Institute of Taxation is a 

member of the Confédération Fiscale 

Européenne (CFE). 

The CFE was founded in 1959 and now 

embraces 29 professional bodies from 

22 European countries and more than 

150,000 tax professionals. The key 

objectives of the CFE are to promote 

the interests of tax professionals, to 

exchange information about national 

tax laws and to contribute to the 

development of tax law in Europe and 

to maintain relations with authorities at 

national and international levels. 

Together with the Tax Faculty of the 

Institute of Chartered Accountants in 

England and Wales, the Chartered 

Institute of Taxation represents the UK 

at the CFE. 

Paul Morton is the Institute’s senior 

representative and a member of the 

CFE. He will become President in 2006 

when the annual CFE General 

Assembly will be held in London. 

Stephen Coleclough became Chairman 

of the CFE Fiscal Commitee on 

1 January 2005 for a two year term. 

The Institute representative on the CFE 

Council is John Dewhurst who also 

served on the Fiscal Committee for 

many years and Thomas Melvin 

represents the Institute on direct tax 

matters at the Fiscal Committee. 

Technical meetings are held three or 

four times each year and in April there 

is an annual Forum in Brussels which all 

Institute Members may attend. Further 

information may be found on the web 

site www.cfe.eutax.org 


11

Branches 

Chris Brydone 

Chairman, 

Branches 

Forum 

Branches 

This has been an exciting year for 

for their work, with Phillip 

mark the 75th Anniversary in 

the branches. With the active 

Pearson, on updating this for 

September 2005 and another 

support of Tim Ambrose and John 

access from the website; 

session had the branches thinking 

Beattie the branches have made 

• Other “e” developments covering 

about how they were going to act 

the Branches Forum a focus for 

branch affairs; 

on the exchanges they had shared 

debate on branch affairs and the 

• Student training prompted by the 

during the day. 

role of branches in national 

very successful developments in 

initiatives. The one-day forum in 

Northern Ireland; and 

It was good to see that the majority 

February has now become a 

•Planning for the 75th Anniversary 

of branches sent two 

Branches Conference devoted 

celebrations and the Branches 

representatives and some even 

wholly to enable the branches to 

Conference. 

managed three or four. 

come together in a joint 

development exercise. In this year 

I am very grateful to Branch 

A good time was had by everyone. 

of the 75th Anniversary branches 

Chairmen and other officers who 

have been active in thinking up 

give up valuable time to attend the 

Thanks are due to Natalie Miller, 

ways to celebrate the occasion. 

forum. 

Louise Duffy, Divya Malde, 

Graham Batty and Robert Steel for 

Branches Forum 

Branches Conference 

their work in helping to put the 

Branches Forum, which meets 

On 21 and 22 February 2005 the 

conference together. 

three times a year, offers an 

branches held a very successful 

opportunity for branch 

conference at the University of 

Branches 

representatives to share ideas and 

Warwick in Coventry. Here was an 

There are 30 branches of the 

experiences and contribute to 

opportunity for branch committee 

Institute of which 26 are in the UK 


policy at a national level. 

I have been impressed by the 

quality of debate at the forum. 

Notwithstanding an attendance of 

30-40 representatives on occasions, 

everyone gets an opportunity to 

contribute and the breaks give rise 

to much animated discussion. 

Particular issues of concern in the 

year have been: 

• The development of a new 

branches handbook. Thanks to 

Natalie Miller and Louise Duffy 

members to learn from each other, 

develop new strategies and have 

fun without the constraints created 

by travel to and from an event at 

each end of the day. 

The conference started with dinner. 

After a good night’s rest the next 

morning was spent exploring the 

roles of Chairman, Secretary and 

Treasurer, looking at effective 

marketing and sponsorship, 

“working together”, and 

contributing to the Institute’s 

“Strategy for 2010”. In the 

afternoon plans were developed to 

and four overseas. All offer a strong 

technical programme to meet the 

needs of local practitioners, and are 

open to members and nonmembers 

alike. In recent years 

many branches have moved 

towards a subscription programme. 

The modest charges levied help to 

ensure that tax advisers receive 

lectures of a high standard that are 

self-financing. 

Northern Ireland Branch entered 

into a contract with one of the 

tuition companies to provide 

training for students who would 

12

Branches 

Birmingham and West Midlands Branch 

Annual Dinner – Graham Batty, Chairman, 

Birmingham and West Midlands Branch 

(front row-centre) with Les Beckett, ATT 

President (front row-left) and John Beattie, 

CIOT President (front row-right) and top 

table guests. 

Merseyside Branch Dinner – From left to 

right: John Beattie, Incoming President; 

Martin Henfield, Television Presenter in the 

North West; Jean Jesty, ATT Vice-President and 

John Elliott, Chairman of Merseyside Branch, 

February 2004. 

The Joint Presidents’ Luncheon of the CIOT 

and ATT in Belfast brought together all of 

the original committee of the Northern 

Ireland Branch, which was formed in 1982. 

Pictured from left to right are: Ted Gorringe, 

Ivor McCandless, John Beattie, Hilary Lavery 

and Eugene Hassan. 

otherwise have to travel across the 

water to study. This has been very 

successful and an initiative which 

will be closely watched by the 

Forum. 

Congratulations to Sussex Branch, 

which celebrated its 25th 

Anniversary during the year. 

Regional Co-ordinators 

I would like to thank the Regional 

Co-ordinators for their hard work. 

It is their duty to support and 

advise the branches. 

Hazel Slater has had to stand down 

as South West Regional Coordinator 

on her move to London. 

I would like to thank her for her 

valuable contribution during the 

short time she held the position. 

Conclusion 

This has been a tremendous year 

for the branches, one in which 

they have come to feel less like 

regional outposts and more a 

working part of the Institute. 

I would like to thank all those on 

branch committees who do so 

much for members in their towns 

and cities, wherever they are, and 

to the Chairmen and other officers 

who have contributed so much to 

the work of the Institute at 

national events. 

I also want to thank Phillip 

Pearson, ably assisted by Sally 

Crowder and Lorraine Blatchford, 

for the support they have given to 

me and to branch network during 

the year. 

Chris Brydone 

Chairman 

The current Chairman of Sussex Branch, 

Matt Coward (centre) with Past Chairmen 

of Sussex Branch. From left to right: Gerry 

Hart, Liz Densley, Susan Catell and John 

Kimmer. 

European Branch meeting in Paris: Speakers – 

Back row (left to right): Stephen Arthur 

(Chairman), Paul Farmer (Pump Court Tax 

Chambers), Giovanni Rolle (R&A Studio 

Tributario Associato, Turin) and Christophe 

Billet (Ginestié & Associés, Paris). Front row: 

John Neighbour (OECD), Rodney Taylor 

(Mazars – the hosts) and Anne-Lise Chagneau 

(Ginestié & Associés). 

Regional Co-ordinators 

Midlands 

Michael Warburton Wood 

Northern 

Chris Humphreys 

South East 

Jefffrey Smith 

South West 

Hazel Slater 

Branch Chairmen 2004-2005 

Birmingham and 

West Midlands Graham Batty 

Bristol 

Nick Yassukovich 

Croydon & District Steven Levine 

Cumbria & South West 

Scotland 

Graham Poles 

East Anglia 

Robert Chalmers 

East Midlands 

Chris Smith 

Essex 

Keith Bell 

European 

Stephen Arthur 

Guernsey 

Mark Davies 

Hampshire 

Brian Leach 

Harrow & North London Divya Malde 

Hong Kong 

Deborah Annells 

Hull 

Jackie Hall 

Kent 

Clare Vinson 

Leeds 

Robert Steel 

London 

Christopher Lallemand 

Manchester & District Mike Longman 

Merseyside 

Stan Blake 

Mid-Anglia 

David Webb 

Newcastle & District Kirsty McKenzie 

Northern Ireland Clifford Rodgers 

Scotland 

John Gilmour 

Severn Valley 

Simon Braidley 

Sheffield 

Andrew Maxfield 

Singapore 

Low Weng Keong 

Somerset & Dorset Bernard Critchley 

South Wales 

Andrew Evans 

South West England Stephen Taylor 

Sussex 

Matt Coward 

Thames Valley 

Mark Ashby 


13

Education 

Robert Ellerby 

Chairman, 

Education 

Committee 

Education 

Much has been achieved in 2004 

knowledge and the ability to apply 

bodies. The changes,which will 

under the Institute’s ‘education’ 

tax law to complex information. 

come into effect from the May 

umbrella. In particular, we have 

Many of you, like me, will have sat 

2006 examination, are not major 

held our first set of exams for the 

the examination a number of years 

but we have split Paper I into five 

Advanced Diploma in International 

ago and I think it is fair to say that 

sections so that we can now 

Taxation, have conducted a review 

the law has not got any easier in 

examine more indirect taxes. 

of the CTA syllabus, have run six 

recent years. Indeed, it seems to 

Administration will no longer be 

successful conferences, have 

have become even more 

considered separately in Paper IV 

administered two diets of the CTA 

complicated. Accordingly, if you are 

but will be examinable in context 

examinations and have overseen 

in a position to encourage a CTA 

in Papers I, II and III. The 

the Fellowship scheme, not to 

student with his or her studies, I 

examination of law will be 

mention having dealt with various 

would ask you to give as much 

removed from Paper II and 

other educational matters which 

support as you can, for I am sure 

examined instead in Paper IV, 

crop up on a day-to-day basis. I am 

that it will be hugely appreciated. 

giving the opportunity to test 

conscious of the huge amount of 

There are too many people to thank 

interpretation of statutes. 

time invested so freely by many 

to list them by name here but I 

busy tax professionals and I should 

should like to single out for extra 

A continuing commitment to 

like to extend my thanks to all 

special thanks Roger Barnard, who 

academia 

those who have played their part, 

leads the Examination Sub- 

We maintained our financial 

whether as a member of the 

Committee, Nick Lloyd, our Chief 

support for the Tax Law Centre in 

Education Committee itself, or as a 

Examiner, and all of our examiners 

Cambridge and the Tax Research 

member of one of the Sub- 

who have an enormous 

Network Conference, and awarded 

Committees or Working Parties, or 

responsibility to maintain the 

our first grants of £3,000 each to 


indeed as a member of the 

Institute’s Education department. 

Without that level of commitment, 

we could not operate as 

successfully as we do. 

The Chartered Tax Adviser 

Examination 

Those of you who employ CTA 

trainees or who read Tax Adviser 

carefully will have noticed that the 

pass rates for 2004 have been 

disappointing; 40% in May and 

37% in November. The examination 

is difficult because of the nature of 

our tax system and success in it 

depends on both technical 

standard of the CTA qualification. 

Over the May and November 2004 

diets 1,369 individuals sat the CTA 

examinations, of whom 526 were 

successful and eligible to become 

Chartered Tax Advisers (subject to 

their having met the requirement 

for three years’ professional 

experience). 

During the year much work has 

been undertaken reviewing the 

CTA syllabus with a view to making 

the exam even more practical. This 

has now been completed and we 

are grateful for the input from 

interested firms and tutorial 

five PhD tax students. These will 

help the individuals concerned 

complete post-graduate research 

into tax in the UK, for which 

almost no funding now exists. It is 

consistent with our Charter and 

important to the profession as a 

whole that the academic 

community is assisted in studying 

and questioning our tax system 

and keeping up-to-date with 

international comparisons. 

The Advanced Diploma in 

International Taxation (‘ADIT’) 

The first sitting of this modular 

Diploma took place in May 2004. 

14

Education 

At the Nottingham Conference – From left 

to right: John Cullinane, Vice-President; 

Martyn Ingles, lecturer on key commercial 

property tax issues and Khalid Mehmood, 

Chartered Tax Adviser. 

From left to right: The Advanced Diploma in 

International Taxation – Martin Harty (ADIT 

certificate holder), Ruth Bruce (Winner of 

the Heather Self Medal for the highest marks 

in ADIT Paper I – Principles of International 

Taxation) and Sam Golcher (ADIT certificate 

holder). 

Delegates during a break at the Nottingham 

Conference. 

The President, John Beattie, with the prize winners for May 2004 (unless otherwise 

indicated). Back row, left to right: Stuart Farrow-Smith (Ian Walker Medal for Paper I), 

Katherine Alexander (John Wood Medal for Paper IIC) and Matthew Rees (Avery Jones 

Medal for Paper III). Front row, left to right: Anja Krech (Victor Durkacz Medal for Paper 

IID, November 2003), Helen Wainwright (Institute Medal and LexisNexis Prize), 

the President, Sarah Allatt (Gilbert Burr Medal for Paper IIA) and Rodney Adama 

(Institute Gold Medal for the highest mark in the LLB Taxation & Law 2004, 

Bournemouth University). 

Examination Prizes 

May 2004 

The Institute Medal for the best 

overall performance across all four 

papers. 

Helen Louise Wainwright 

(Deloitte LLP, London) 

The Ian Walker Medal for the 

paper on General Taxation. 

Stuart William Farrow-Smith 

(PricewaterhouseCoopers LLP, 

London) 

The Gilbert Burr Medal for the 

paper on General Practice. 

Sarah Elizabeth Claire Allatt 


London) 

The John Wood Medal for the 

paper on Companies. 

Katharine Ann Alexander 


The Avery Jones Medal for the 

paper on Interaction of Taxes. 

Matthew Anthony Rees 


Birmingham) 

The Ronald Ison Medal for the 

paper on Tax Administration, 

Professional Responsibilities and 

Ethics. 

Anna Jane Patten 

(KPMG LLP, London) 

MAY 2004 EXAMINATION PRIZEWINNERS 

The LexisNexis Prize for the 

highest total marks. 

Helen Louise Wainwright 


The CCH Prize for the second 


Sarah Elizabeth Claire Allatt 


London) 

November 2004 

The Institute Medal for the best 

overall performance across all four 

papers. 

Helen Louise Lewis 

(Francis Clark, Exeter) 

The Ian Walker Medal for the 

paper on General Taxation. 

Janine Elizabeth Murray 

(Deloitte LLP, Reading) 

The Gilbert Burr Medal for the 

paper on General Practice. 

Mark Thompson 

(J H Greenwood & Company 

Chartered Accountants, Berwickupon-Tweed) 

The Spofforth Medal for the 

paper on Taxation of Individuals, 

Trusts and Estates. 

Anthony James Meehan 

(Winter Rule, Chartered 

Accountants, Truro) 

The John Wood Medal for the 

paper on Companies. 

Veronica Maryse Black 

(Ernst & Young LLP, London) 

The Avery Jones Medal for the 

paper on Interaction of Taxes. 

Deepak Prakash Malhotra 

(Horwath Clark Whitehill Reading) 

The Ronald Ison Medal for the 

paper on Tax Administration, 

Professional Responsibilities and 

Ethics. 

Daniel John Grainge 

(Spofforths, Chichester) 

The LexisNexis Prize for the 


Helen Louise Lewis 

(Francis Clark, Exeter) 

The CCH Prize for the second 


Daniel John Grainge 

(Spofforths, Chichester) 

May 2004 

The Advanced Diploma in 

International Taxation 

The Heather Self Medal for the 

highest marks in the paper on 

Principles of international 

Taxation. 

Ruth Bruce 

(Ernst & Young LLP, Aberdeen) 

The quality and number of 

candidates who put themselves 

forward as ‘guinea pigs’ for this 

inaugural examination was most 

encouraging. It is pleasing to note 

that the number of registered 

students is growing steadily and 

the Sub-Committee is delighted 

that 2004 also saw the publication 

of the first distance-learning course 

written specifically for the syllabus 

of Paper II (Advanced International 

Taxation – United Kingdom 

Option). 

We are aware that much more work 

needs to be done to establish this 

as a truly international and 

‘portable’ qualification but there is 

now a sound foundation. Again, I 

am grateful to all those who have 

helped to get this qualification off 

the ground. In particular, I should 

like to thank Tim Ambrose, who 

chairs the ADIT Sub-Committee, 

for his enthusiasm in driving this 

initiative forward. 

Members’ Conferences 

As Chairman of the Members’ 

Conferences Working Party I was 

delighted that all three of the 

Institute’s annual conferences 

(Cambridge, Nottingham and the 

Finance Bill) were full houses in 

2004 and it was particularly 

rewarding to see a number of new 

faces at these events. Our 

residential conferences cater for all 

tax professionals but they represent 


15

Education 

The President, John Beattie (right) and 

Chris Lallemand, Chairman of London 

Branch, at the Nottingham Conference. 

Philip Ridgway, Vice-Chairman of 

Education Committee and CIOT Council 

Member, offers advice to students on the 

tax advisers profession at the Careers, 

Research and Advisory Centre (CRAC) 

‘Insight into a Taxing Career’ day. 

The President (left) with new Fellows, 

Liz Lathwood (centre) and Sivahar 

Mahalingham (right). 

an excellent opportunity, in 

Technical Training programme 

appreciated that she took time out 

particular, for sole practitioners or 

(VLTT) and to mark the final paper 

of her busy schedule to talk to the 

those working in small practices 

of the three-part VLTT continued. 

winners individually. The CIOT is 

from all over the UK to learn and 

We were delighted to be asked to 

the major competition sponsor in 

socialise together. I am indebted to 

become involved with the new 

this exercise which aims to raise 

Robert Jamieson for the assistance 

pilot Customs exams in excise and 

awareness of the importance of tax 

he gives me in devising the 

international trade. Furthermore, 

in everyday life amongst school 

technical programmes. 

since the announcement that the 

students. 

Inland Revenue and HM Customs 

The joint Inland Revenue and HM 

and Excise were to merge, we have 

CTA (Fellow) 

Customs and Excise conferences 

expressed our willingness to the 

In 2004 three Associates who rose 

held at Latimer House in 

new combined HMRC to assist in 

to the challenge of striving for 

Buckinghamshire in October 2004 

any way that we can with regard to 

Fellowship submitted a thesis or a 

focussed on ‘Rights and 

training issues. 

body of work of a satisfactory 

Responsibilities’. The topical 

standard on the topics of ‘New tax 

keynote speech was given by David 

The work of the Institute’s careers’ 

credits’, ‘Modernisation of the 

Varney of HMRC who gave real 

project also continues, with CIOT 

remittance basis of charge to 

food for thought. 

representatives attending large 

income and capital gains tax’, and 

undergraduate fairs to talk about 

‘The taxation of trusts for the 

Training and Update 

the CTA qualification and the 

disabled’. Congratulations to them. 

Conferences 

career options available in our 

Under our Charter we can invite up 

The spring and autumn 

profession. In addition, we 

to 10 individuals per year, who are 

conferences were both held at York 

contributed the entire editorial to 

not already existing members, to 


University. It was very encouraging 

to note the increased number of 

students at the Autumn 

Conference and the excellent 

feedback from them as to the 

usefulness of the weekend. I am 

grateful to the Training Conference 

Working Party, led with 

enthusiasm by our President, John 

Beattie, and all the lecturers, many 

of whom stay all weekend to help 

the students. 

External Relations 

Our arrangement with HM 

Customs and Excise to validate 

their thrice-yearly VAT Legal and 

the annual Inside Careers Guide to 

the Tax Profession. 

Committee member Angharad 

Miller of Bournemouth University 

organised the Schools Fantasy 

Budget competition for the ninth 

year in succession. This gave the 

two winning teams at both the 

GCSE and A Level age groups 

(respectively Birkenhead High 

School in Merseyside and Liskeard 

School in Cornwall) the chance to 

collect their prizes from Dawn 

Primarolo MP, Paymaster-General, 

at a reception held in the House of 

Commons and it was much 

be admitted as Fellows on 

submission of a suitable thesis or 

body of work. Six such invitations 

were issued in 2004 and one 

distinguished member of the 

profession became a Fellow via this 

route after presenting a body of 

work. 

The Education Department 

Last but by no means least, I 

should like to thank the whole of 

the Education Department at 

Upper Belgrave Street, namely Roz, 

Jude, Richard, Lisa, Cath and 

Mairead for the hard work that 

they put in to ensure that all of the 

16

Education 

above actually happened. In 

addition, I should like to 

acknowledge the huge 

contribution made by Rachel 

Quinn who left the Institute in 

September after having completed 

10 years’ service to start a new life 

with her husband in Hong Kong. 

Sadly, she was holidaying in 

Phuket when the tsunami struck 

and tragically died. My thoughts 

are with her family. 

The President, John Beattie, and new Chartered Tax Advisers in the Old Library at Guildhall. 


Chairman 

Rachel Quinn, Deputy Head of Education 

Department, 1994 – 2004. 

New Members and their guests, in the Old Library at Guildhall, awaiting the 

presentation of their CTA certificates. 

New Chartered Tax Advisers and their families relaxed in the Crypt after the official 

ceremony. 


17

Low Incomes Tax Reform Group 

John Andrews 

Chairman, 

Low Incomes Tax 

Reform Group 


For LITRG, 2004 has been a year 

Our staff and volunteers have also 

We continue to lobby for necessary 

of growth. 

been active in writing for the 

changes on behalf of students, to 

mainstream tax publishers and for 

help develop the Revenue’s website 

In January 2004 we formed a 

the Inland Revenue, while also 

material, and to work also with the 

new charity, Tax Volunteers, to 

reviewing more popular materials 

National Union of Students. 

take on the running of TaxHelp 

on tax such as the annual guides 

for Older People (TOP). TOP 

produced by the Daily Mail and 

Our role in redrafting the former 

enables professionals to give 

Age Concern. All this helps bring 

Revenue leaflet IR37 to make it 

free tax help to poorer 

the issues we promote to the 

more responsive to the needs of 

pensioners who could not 

attention of a wider public. 

unrepresented appellants before 

otherwise afford to pay fees. 

tax tribunals was commended by 

Under the new aegis, and with 

As our work is supported largely by 

the Department for Constitutional 

increased funding from the 

the tax profession, we try to feed 

Affairs in the following terms: 

Inland Revenue, that scheme 

back our experiences and 

has continued to expand from 

researches into how the tax system 

“Your comments were the 

its base in the South West and 

interacts with those on low 

most extensive of those 

West Midlands. TOP is now 

incomes through articles in the 

which we received, had 

active in Edinburgh, London, 

professional press. We are 

clearly been considered in 

and other major cities, while 

particularly grateful to Tax Adviser 

the greatest depth and were 

also spreading into rural areas 

and Tax Journal for affording us 

generally found to be the 

of Shropshire, Wiltshire and 

numerous such opportunities. 

most valuable to us.” 

South Wales. 

While our workload remains 

We look forward to more 


Also in January we launched our 

new website, www.litrg.org.uk, 

which by April was already the 

runner-up in that year’s LexisNexis 

awards for the best tax website. 

Since then the number of visitors 

has grown steadily, and through it 

we correspond with journalists and 

welfare rights advisers as well as 

individuals in need of advice. 

The website has been invaluable in 

giving LITRG and our work a high 

public profile, essential for a 

venture such as ours, and we now 

enjoy fairly frequent coverage in 

the national press and media. 

largely devoted to pensioners and 

tax credits recipients, we have also 

assisted a number of other lowincome 

groups. Our collaboration 

with the Fostering Network and the 

National Association of Adult 

Placement Schemes has helped 

dedicated carers on very lowincomes 

to concentrate less on 

completing unnecessary 

government paperwork and more 

on their caring activities. This in 

turn has stemmed the flow of 

experienced carers out of the 

sector, and aided recruitment. 

collaboration with the DCA as their 

tribunal reforms progress. 

With tax credits now going to six 

million claimants, there is an ever 

growing need for combined 

expertise in tax and welfare rights. 

LITRG has been instrumental in 

forming an alliance of tax and 

welfare bodies to press for necessary 

changes and improvements in the 

tax credits system. These now 

include the CIOT and ICAEW Tax 

Faculty, TaxAid, Citizens Advice, 

Child Poverty Action Group, One 

Parent Families, Local Government 

18


Association and National 

to the Exchequer in the months it 

line, at a time when the tax system 

Association of Welfare Rights 

took for the over-deducted tax to 

presents greater complexity to a 

Advisers. Our combined efforts have 

be returned to them. 

more vulnerable customer base 

shown that the greater the number 

than at any time in its past. Yet the 

of organisations making the same 

Last year, the Revenue launched 

new organisation promises that it 

representations, the more willing 

the most effective use of their own 

will place customer service at the 

Government is to listen and act. 

databases to track down and repay 

forefront. In September and 

low-income pensioners. Without 

October I was one of four external 

Similarly, pressure exerted by Age 

LITRG involvement it is unlikely 

speakers at two conferences of 

Concern and Help the Aged jointly 

that it would ever have happened. 

senior HMRC officials, and used 

with LITRG, and at our behest, has 

However, as a result, at December 

the occasion to represent the needs 

meant the end of a long-running 

2004 some 30,000 pensioners had 

of low-income “customers”. A 

injustice: the deduction of basic 

been repaid just over £11.3 million, 

forthright message seemed to be 

rate tax from retirement annuities 

which they would otherwise have 

well received; but it will take more 

even where the annuitants have 

lost. We expect this figure to rise 

than speeches to hold the new 

negligible liabilities. Having been 

significantly in 2005. 

organisation to its customer service 

blocked for years by the 

pledge. 

unwillingness of the providers to 

For a body which is for the most 

change their IT systems, 

part a campaigning and lobbying 

LITRG has much more to do in 

Government has now committed 

organisation, it is important to 

2005, than in the previous seven 

itself to paying retirement 

ensure that our policy 

years of our existence; we are 

annuities through PAYE by 2007. 

representations are well grounded 

constantly taking on new 

in reality. To do this we encourage 

challenges; and with the support of 

Apart from retirement annuities, 

tax can also be over-deducted from 

ordinary investors in banks and 

building societies. In its first year 

LITRG reported that very many 

low-income, particularly elderly, 

people were either unaware that 

they could reclaim tax deducted at 

source from their accounts or 

register to be paid gross. Just as 

many were put off by the 

paperwork involved. Even those 

who knew and completed the 

necessary forms found themselves 

lending their money interest-free 

tax credit claimants, pensioners, 

those with disabilities, and others 

to write in to our website. In many 

cases we are able to help solve their 

problems, in all cases we learn 

more about the reality of struggling 

with the tax and tax credits 

systems while living on a low 

income. In addition we learn much 

from our colleagues at Tax 

Volunteers about the tax 

difficulties faced by pensioners. 

The new HMRC proposes to slim 

down its workforce at the front 

the profession will continue to 

promote the interests of the 

unrepresented as best we can as we 

move into the HMRC era. 

Once again I want to thank Robin 

Williamson, Sue Jones, Hazel 

Mazelin-Forbes and all our 

volunteers for some really 

committed work in 2004. 

John Andrews 

Chairman 


19

Standards 

Anthony Thomas 

Chairman, 


Committee 



It has been another busy year for 

the joint Standards Committee with 

new policies and new legislation to 

consider. As every year passes the 

list gets longer and longer! There 

were changes too to the 

membership of the Committee. Jon 

Cartwright stood down from the 

Committee; I would like to thank 

Jon for his commitment and 

valuable contribution throughout 

his six years as a Committee 

member. I would also like to 

welcome new Committee member, 

Rosemary Blundell who is a 

chartered tax adviser based in 

Nottingham, and Susanna Hanks 

who works for HMCE and has 

attended meetings as an observer. 

It is always good to have a balance 

on the committee and to welcome 

the views of the Revenue and 

Customs – shortly to be HMRC. 

Role of the joint Standards 

Committee 

The development of guidance to 

help members uphold the high 

professional and ethical standards 

required of a CTA and a taxation 

technician is a vital part of the work 

of the Standards Committee. We 

also aim to ensure that the 

professional rules and practice 

guidelines offer protection both to 

our members, their clients and the 

public. During 2004 the Committee 

worked on the following projects. 

• Professional conduct in relation 

to taxation 

An updated version of 

Professional conduct in relation 

to taxation, developed in 

conjunction with the ICAEW, 

ICAS, ACCA and IIT, was 

released in April 2004. It 

provides valuable guidance for 

members on dealings with the 

tax authorities. 

• Professional Indemnity 

Insurance (PII) 

Standards Committee undertook 

a comprehensive review of the 

PII requirements for members. 

An updated joint CIOT and ATT 

policy with detailed supporting 

guidance notes were approved 

by both Councils during the 

year. The new policy will apply 

to PII policies taken out on or 

after 1 January 2006. Although 

the minimum and maximum 

required levels of cover remain 

unchanged there are a number 

of important changes in the 

detail of the policy. These 

include the requirement in 

future for members to self certify 

that they have complied with 

the PII rules. 

• Money Laundering and the 

Proceeds of Crime 

We had hoped that with the 

completion of the anti money 

laundering guidance in the early 

part of 2004 the workload of the 

money laundering working 

party might ease off a little. 

However the arrival of the draft 

3rd Directive on Money 

Laundering and a proposal to 

extend legal professional 

privilege under the 2nd Directive 

on Money Laundering to tax 

advisers and accountants has 

kept us busy making 

representations and attending 

consultation meetings. 

• Disclosure conference 

The workload for members 

increases apace as new 

legislation is introduced. The 

Disclosure regulations gave 

members yet more rules to 

master and forms to fill. To help 

ease the pressure a little the 

Standards Committee, ably 

assisted by the ATT conference 

team, organised a well-received 

conference on the profession 

and the Revenue. 

• Professional Rules and Practice 

Guidelines (PRPG) 

A working party tasked with 

updating the PRPG has been 

busy reviewing and where 

necessary redrafting the 

handbook. We hope to issue the 

new version by the end of 2005. 

20


Professional Conduct in Relation to 

Taxation. 

Enforcement of Standards 

• Engagement letters working 

party 

The joint engagement letters 

working party comprising 

members of CIOT, ATT, ICAEW, 

ACCA, ICAS, IIT, ICAI and STEP 

has been reconvened and held 

its first meeting in February 

2005. Its brief is to update the 

pro forma engagement letters 

(see Appendix 7 PRPG) to take 

account of developments such as 

the disclosure regulations, 

money laundering legislation 

and tax credits. 

Conclusion 

In May I will hand over, with 

confidence, the chair of the 

Committee to Carol Clayton a 

member of the ATT council and my 

vice chair for the last two years. My 

two years as chairman have been 

challenging, co-inciding with the 

introduction of the Proceeds of 

Crime Act 2002, the Money 

Laundering Regulations, the 

Disclosure regulations and the 

update/publication of important 

guidance for members. Nonetheless 

it has been an enjoyable and 

The setting of standards of professional 

conduct for members and students 

carries with it the requirement to 

establish a process for enforcing them. 

This is essential, if the reputation of the 

Institute and its members and public 

confidence are to be maintained. 

However, it is also essential that such 

enforcement is undertaken independently 

from those setting the standards. To 

achieve this, the Institute and the 

Association of Taxation Technicians have 

adopted a Disciplinary Scheme which has 

been administered on their behalf by the 

Taxation Disciplinary Board Ltd (TDB) 

rewarding experience. 

since May 2001. 

• Review of other policies – 

Compulsory professional 

development (CPD) and 

practice assurance. 

The Standards Committee has 

also conducted high-level 

reviews of the CPD policy and 

considered the case for practice 

assurance. Following 

consultation with Council no 

further action was deemed 

necessary at this stage. 

• Working with other bodies 

The Standards Committee 

continues to maintain good 

links and working relationships 

with other professional bodies, 

the tax authorities (and other 

government departments) and 

the Confédération Fiscale 

Européenne. 

I would like to thank the committee 

members and the various working 

party teams for their support and 

particularly their encouragement in 

the difficult times. 

A special thanks is due to Heather 

Brehcist the Standards Officer who 

has had to put up with me and to 

Jonathan Crump and Andy 

Pickering for their invaluable work 

and guidance. Without everyone’s 

considerable input my work would 

have been very much harder. I 

would like to think that together we 

have achieved many things and it 

has been a rewarding personal 

experience for me. Thank you. 


Chairman 

Under the Scheme, TDB investigates 

impartially all complaints against, and 

certain appeals by, members and 

students of the participating bodies. 

TDB’s independent Board provides overall 

administration but has no direct 

involvement with individual disciplinary 

cases. This is delegated to three 

committees: Investigation, which reviews 

complaints to determine whether or not 

there is a prima facie failure of standards 

for the relevant participating body to 

pursue; Discipline, which conducts formal 

hearings of any charges arising from the 

investigation and Appeals, which hears 

appeals made against the Disciplinary 

findings and any sanctions imposed. 

Further details of the activities of TDB can 

be obtained from the Director’s Report in 

their Annual Accounts, copies of which 

are available on request. 


21

Membership 

Peter Horsman 

Chairman, 

Membership 

Committee 

Membership 

It has been another busy year and 

Institute and the tax community. 

consolidate and develop Tax 

I have been much indebted to the 

The first Fellows’ Dinner was a great 

Adviser as the authoritative and 

Committee members for their 

success, with around a hundred 

readable journal of our institute. 

support and hard work in 

attending a black-tie, Fellows-only 

Our thanks go to all contributors 

delivering a number of projects. 

dinner at Kings College London. 

during the year, as well as to the 

We were honoured to have the Rt 

Editorial Board and Strategy 

CIOT Information Source CD 

Hon Lord Hoffman as our principal 

Committee. 

My thanks to Chris Jones for 

guest and speaker. 

piloting this project through. 

On-line CTA Directory 

Publication is due in April 2005. It 

Tony Arnold Library 

After a number of e-hiccups, the 

is an invaluable source for all 

Following a review, we have 

list of members became fully 

matters relating to the Institute, 

decided to commit more resources 

operational on our website last 

from statutory through to lists of 

to this valuable facility for our 

autumn. Whilst the Information 

members; from the technical 

members. The library, which is 

Source CD will carry a list also, the 

responses through to the 

based in the Maughan Library and 

website is kept up to date. Maureen 

examinations. If in doubt, search 

Information Services Centre, 

Davis has put in considerable 

the information source. We intend 

King’s College, Chancery Lane, 

effort to bring this to a successful 

to re-issue the CD annually. 

London, is named after the longest 

conclusion, and my thanks (and 

serving Secretary of the Institute 

congratulations) go to her. 

Admission Ceremonies 

and was rededicated by his widow, 

One of the highlights of the 

Joan Arnold, in the summer. The 

Conclusion 

Institute’s year is the twice-yearly 

library holds a vast range of 

This gives a flavour of the work 

Admission Ceremony, held at the 

publications, tax and related cases 

carried out by the Membership 


Guildhall in London. This year, we 

managed the project internally 

and thereby saved some 

substantial costs and the quality 

and prestige of the events were, if 

anything, even higher. My thanks 

to Phillip Pearson and his staff. We 

are actively exploring holding 

ceremonies in a regional city as 

well as London. 

Fellows’ Dinner 

Other than paying higher 

subscriptions, Fellows have no 

special privileges or rights than any 

other member not withstanding 

their high standing within the 

transcripts and Fellowship Theses. 

An agreement has been reached 

with LexisNexis for the provision 

of a full time Librarian and Helen 

Ford is available from 9-5 Monday 

to Friday. She can be contacted by 

email at library@ciot.org.uk or by 

telephone on 020 7848 2568 or fax 

on 020 7848 1942. It is the 

intention that online services will 

be developed to provide greater 

access for members. 

Tax Adviser 

Considerable work has been put in 

behind the scenes to assist Tax 

Adviser’s editor, Neil Owen, to 

Committee, and its support staff 

headed by Phillip Pearson. My 

thanks, on behalf of all members, 

are due to them. 

If you would like to become more 

involved with our Institute, 

whether by committee 

membership or otherwise, or 

have suggestions for 

improvements, please feel free to 

telephone (020 7841 4000) or 

e-mail me 

(peter.horsman@saffery.com). 

Peter Horsman 

Chairman 

22

Membership 

Past Presidents’ Penny Hamilton (left) and 

John Avery Jones (right) with other 

Fellows in the Garden Court Yard at the 

Inaugural Fellows’ Dinner 2004. 

The President, John Beattie, with the 

principle speaker, Lord Hoffman, at the 

inaugural Fellows’ Dinner. 

July 2004 issue of Tax Adviser. 

The Fellows’ Dinner was held in the Weston Room at King’s College Library, Chancery 

Lane. The Library is also the venue of the Institute’s Tony Arnold (Tax) Library. 

Guests at the re-dedication ceremony of The Tony Arnold Library by Mrs Joan Arnold (centre) and the President. 

Membership statistics 

Five year’s summary of the number of Members for the years ended 31 December: 

2004 2003 2002 2001 2000 

Fellows 329 326 334 346 365 

Associates 11,506 11,050 10,659 10,111 9,632 

Retired 1,558 1,539 1,531 1,496 1,459 

Total Membership 13,393 12,915 12,524 11,953 11,456 

Increase 3.70% 3.12% 4.77% 4.30% 3.30% 

September 2004 issue of Tax Adviser. 


23

IT and Website 

Chris Jones 

Chairman, 

Information 

Technology 

and Website 

Committee 

Information Technology and 

Website 


The importance the Institute 

places on providing a premier 

website for our members and the 

public has led to the renaming of 

the IT Committee in 2004. 

A huge project has been 

undertaken behind the scenes to 

dramatically improve and 

enhance both the navigation and 

content of our website. This newlook 

user-driven site will be 

launched on 6 April 2005 to mark 

the start of a new tax year and the 

start of a new era of quality, timely 

and relevant information being 

made available to all at the click of 

a mouse! 

The hallmark of our new site is the 

inclusion of five portals for each 

of our main user groups, namely 

our members, students, the public, 

employers and Government. 

Navigation through the site will 

be simple with clear menu options 

being displayed on every page. 

Users will be able to find the right 

information fast. 

I would like to express my most 

sincere thanks to Maureen Davis 

(Head of IT and Central 

Administration), Bianca Marsden 

(Head of Technical Department) 

and Simon Banton (our everpatient 

and talented web 

designer and adviser) for their 

absolute dedication to this 

project. The results of their efforts 

will speak for themselves when 

the new site is uploaded to the 

worldwide web. 

During 2004 the fully searchable 

CTA Members’ Directory was 

made available on our website. 

Members of the public are now 

able to find a local CTA and any 

specialisations they may require. 

Peter Kempster, my Council 

colleague and Deputy President 

was instrumental in this and I am 

extremely grateful to him for the 

vast amount of work and 

consultation this project entailed. 

The Institute has continued the 

penetration testing we started in 

2003 and I am pleased to report 

that that our systems remain 

robust against a possible virus 

attack, as verified by external 

security specialists. 

Our back-up procedures have now 

moved away from tapes to offline 

remote secure servers held off-site 

as part of our disaster recovery 

procedures. Senior staff are now 

able to form an emergency team 

with access to all information to 

ensure the Institute is up and 

running as quickly as possible in 

the event of a disaster. 

Chris Jones 

Chairman 

The new look CIOT Website was worked on by the IT and Website Committee during 

2004 ready for launch in 2005. 

24


Chairman, 

Treasurer’s 

Committee 

Treasurer‘s Report 

Treasurer’s report 

We have made further progress 

towards building our reserves to 

fund strategic changes in the next 

five years. After many years of not 

fulfilling our reserves policy on the 

retention of net current assets, we 

have now almost reached our 

target. 

The results for the year 

It has been an exceptional year for 

the Institute. Net incoming 

resources after unrealised gains on 

investments, investment income 

and actuarial losses of the defined 

benefit pension scheme were 

£694,000 compared with net 

incoming resources of £407,000 in 

2003, an overall increase of 71%. 

The underlying reasons for this 

exceptional year are fixed asset 

investment increases in market 

value of £130,000, exam candidate 

and conference delegate number 

increases over budget expectations 

of £24,000 and £20,000 

respectively and new student 

numbers exceeding budget 

resulting in a favourable variance 

of £27,000. Outsourcing a part of 

IT administration and also 

reductions in publication and 

distribution cost by increased use 

of electronic communication have 

saved almost £150,000 in the year. 

Branches 

I would like once again to express 

my sincere thanks to all branch 

officers for their hard work 

throughout the year and in 

achieving a surplus on conferences 

and other activities of £68,000. 

Cash Flow 

Our activities generated a strong 

operating cash flow of £742,000 

compared with £662,000 last year. 

Cash balances are expected to 

remain satisfactory during 2005. 

Investments 

The Institute’s investment portfolio 

is managed for long term growth in 

accordance with advice from 

independent specialists. The 

quality of this advice is reviewed 

regularly by Council. The portfolio 

grew by 5% in 2004 bringing the 

market value at 31 December 2004 

to £1,984,000. No changes were 

made or recommended. 

Pensions 

The disclosures required by 

Financial Reporting Standard 17 

are set out in the Financial 

Statements. The results show a 

funding deficiency in the year of 

£32,000 and this has been fully 

provided for. 

Treasury and Risk Management 

The Institute continues to manage 

its net cash position in a manner 

designed to maximise interest 

income, while at the same time 

minimising any risk to these funds. 

The development and 

maintenance of the financial 

section of the Institute’s risk 

register continues to be closely 

monitored and the main financial 

risks are reviewed at each meeting. 

Financial Control Manual 

The development and 

maintenance of the Institute’s 

financial control manual is a 

continuing process of refinement 

and amendment by the Committee 

and staff to reflect systems 

changes. The contents of the 

manual have been arranged in a 

similar structure to Internal 

Financial Controls for Charities 

(CC8) issued by the Charity 

Commission. The manual includes 

details of controls over budgets, 

incoming resources, resources 

expended, assets, computer 

systems, branches and related party 

transactions. There is a separate 

manual covering operational 

controls. 

Conclusion 

My term as Chairman of the 

Treasurer’s Committee comes to 

an end in 2005. Our Vice- 

Chairman, John Gilmour will 

then take over this post. I am sure 

John will benefit as I have done 

from the contributions of 

Committee Members and from 

the work carried out at 12 Upper 

Belgrave Street. 


Chairman 


25

Treasurer‘s Report 

Conference delegate numbers in 2004 

exceeded expectations: From right: Peter 

Kempster, Deputy President and Nigel 

Eastaway, Chairman of Technical 

Committee, with delegates. 

The Institute’s careers project has assisted 

with the growth of Members and financial 

stability. 

Mid Anglia Branch Conference – Back row 

left to right: Roger Cobley, Branch Member; 

Tim Ambrose, then President and Giles 

Mooney, Branch Member. Front row left to 

right: Sue Wilson, Secretary of Mid-Anglia 

Branch; Tania Rowe and Patricia Caputo, 

both Branch Members. 

Five Year Summary 

for the year ended 31 December 2004 2003 2002 2001 2000 

£’000 £’000 £’000 £’000 £’000 

Total Net Assets 

Total assets less current liabilities 3,897 3,195 2,773 2,998 3,012 

Pension liability (108) (100) (85) – – 

3,789 3,095 2,688 2,998 3,012 

Income funds (unrestricted) 

General 2,830 2,481 2,214 2,501 2,503 

Designated: 

Premises 700 400 300 300 300 

Tony Arnold Library – – – 30 45 

Examination prizes 59 59 59 57 58 

Disciplinary procedures 200 155 115 110 106 

3,789 3,095 2,688 2,998 3,012 


The staff at 12 Upper Belgrave Street inside the Council Chamber 

used for many Committee meetings and other events. 

The Secretariat Management Board of the Institute outside the Institute 

headquarters at 12 Upper Belgrave Street, London SW1X 8BB. Left to 

right: Jonathan Crump (Deputy Secretary), Phillip Pearson (Head of 

Membership and Branches), Bianca Marsden (Head of Technical), 

Rosalind Baxter (Head of Education), Bob Dommett (Secretary- 

General), Andy Pickering (Secretary, ATT), Maureen Davis (Head of IT 

and Central Administration) and Steve Hines (Head of Finance). 

26

Institute governance 


Compliance Statement 

by either party. As a governance 

Council to the preparation and 

The Council recognises the 

initiative, Council put in place a lay 

distribution of papers for meetings. 

importance of high standards of 

observer. On 1 September 2004, 

Membership of the Committees are 

governance and supports the 

Elizabeth Filkin was appointed as 

set out on pages 44 and 45. 

principles of good governance 

the first paid lay observer at Council 

contained in the Combined Code 

meetings. 

Election To Council 

(the Code) of the Financial 

Election is by the Members of the 

Reporting Council published in July 

The Council meets regularly to 

Institute at the Annual General 

2003 together with the Guidance on 

review financial performance, 

Meeting. The Council is responsible 

Internal Controls and Audit 

strategy and risk and has a formal 

for dealing with nomination under 

Committees. Although the Institute 

agenda of matters specifically 

Members’ Regulation 28 

has no statutory requirement to 

reserved to it for decision. Council 

(Nominations for Election to 

comply with the main and 

papers comprising an agenda, 

Council) and is responsible for the 

supporting principles and provisions 

formal Council and Standing 

election of its Honorary Officers. 

of the Code, it has been taken into 

Committee Minutes together with 

account in managing the Institute’s 

briefing papers on specific matters 

New Council Members, who must 

affairs and the manner in which the 

are sent to the Council Members in 

also be Members of the Institute 

principles have been applied is 

advance of each meeting. The 

(Byelaw 5), are selected for what 

described below. 

Officers Group (see page 44) meets 

they can contribute to the Institute 

more frequently than Council and 

and they must sign a declaration 

Council 

deals with day to day executive 

that they are not disqualified from 

The Council comprises 35 Trustees 

matters. Council members achieved 

acting as a Trustee as detailed in 

who provide a wide range of skills 

an overall attendance rate of 79% at 

Section 72 (1) of the Charities Act 

and experience. The roles of 

President (Chairman), Deputy 

President, Vice-President, Treasurer 

and the Secretary-General (Chief 

Executive Officer) are separate and 

clearly defined and the Council 

considers that its Committee 

Members are independent. They 

fulfil both executive and nonexecutive 

roles such that no 

individual or small group of 

individuals can dominate Council 

decisions. The Secretary-General, 

who attends all Council meetings, 

has a service contract that is subject 

to six months notice of termination 

Council meetings and 88% at 

Officers’ Group meetings. Council 

Members and other Standing 

Committee Members are required to 

make declarations of interests at 

meetings whenever appropriate in 

compliance with the Council 

Regulations. All Members of Council 

have access to the advice and 

services of Institute staff and may 

take independent professional 

advice on Institute matters. There 

are a number of Standing 

Committees of Council to which 

various matters are delegated and 

they adopt the same approach as 

1993. Trustee training is provided 

each year for new and existing 

Trustees and a revised and expanded 

Trustees Handbook was issued to all 

Trustees in the year. 

Audit Committee 

The Audit Committee is a joint 

committee of the Institute and the 

Association of Taxation Technicians 

and has a formal constitution and a 

separate budget for expenditure. It 

consists of three members of the 

Institute and one member of the 

Association and is chaired by Peter 

Murcott. Members of the 


27


Committee receive no remuneration 

procedures. It regularly reviews its 

with all such systems, internal 

for their services, are independent of 

terms of reference and its own 

control is designed to manage rather 

the Council, have both accountancy 

effectiveness. Audit Committee 

than eliminate the risk of failure to 

and taxation qualifications and 

reports are made directly to Council 

achieve strategic objectives and can 

recent and relevant experience. The 

and comment on perceived 

provide reasonable and not absolute 

Committee acts as a catalyst in 

weaknesses. 

assurance against material 

relation to matters affecting the 

misstatement or loss. 

Institute’s financial controls, 

Council Members’ Remuneration 

reporting requirements and risk 

Council Members receive no 

The day-to-day running of the 

management. In this role it reviews 

remuneration for their services. 

Institute’s business is delegated to 

financial control policies and their 

Their travelling expenses are 

the Officers Group of Council 

practical implementation; the 

reimbursed in respect of expenses 

comprised of the Officers and the 

changes in the external 

incurred on Institute business. 

Secretary-General and the 

environment and the procedures 

Payments to former Council 

Management Board comprised of 

used to respond to them; and the 

members for services rendered to the 

Institute Executives. An annual 

management of any prospective risk. 

Institute are only made under an 

letter of assurance is signed by 

It has primary responsibility for 

order from the Charity Commission. 

Institute Executives with 

making a recommendation to the 

responsibility for the preparation of 

Council on the appointment, 

Internal Controls 

financial statements and the 

reappointment and the removal of 

The respective responsibilities of the 

adequacy of systems of internal 

external auditors. It met three times 

Council and Auditors in connection 

financial, compliance and non- 

during the year and requests and 

with the financial statements are 

financial controls. Institute 

receives reports from management 

explained on page 30. The Council 

Committees and staff are responsible 


and also from external auditors on 

the audit. The Chairman attends the 

external audit scope and audit 

closure meetings and meets 

privately with the external auditors. 

It considers annually a wide range of 

audit related subjects and in 2004 

these included an evaluation of the 

effectiveness of the performance of 

the external auditors, and reviews of: 

collaborative working arrangements; 

disaster recovery procedures; the 

annual accounts timetable; staff 

handbook and employment 

contracts; trustee indemnity 

insurance; and electronic payment 

statement on going concern is set 

out on page 29. There were no nonaudit 

services provided by the 

Auditors during the year. 

The Council is responsible for the 

Institute’s system of internal 

controls and for taking such steps as 

are reasonably open to it to 

safeguard the assets of the Institute 

and to prevent and detect fraud and 

other irregularities. The Code refers 

to internal controls in the widest 

sense, including financial, 

operational and compliance controls 

and risk management systems. As 

for implementing the fundamental 

and incremental initiatives of the 

Institute’s strategic development 

plan called Strategy 2005 and 

providing input to Strategy 2010. 

The President, Officers and 

Committee Members of the Institute 

visit head office and its branches on 

a regular basis and meet volunteers, 

members, students and staff. 

Quarterly financial statements are 

presented to Council and are 

measured against both budget and 

interim forecasts. The Council has 

established a clear organisational 

structure with defined authority 

28

Membership 

Marian Penney presenting a silver goblet 

in memory of her husband Malcolm to 

Adam Broke (Past Master of the Company 

of Tax Advisers). 

The Worshipful Company of Tax Advisers 

(Officers for the year 2004-2005) - Clive 

Tulloch, Master (second left); Erica Stary, 

District Judge; Colin Reid, Middle Warden 

and Ian Stitt, Renter Warden. 

The Beadle presenting a new Mace to the 

Master accompanied by four of the five Past 

Masters' who had contributed the cost of its 

commission – from left to right: Adam Broke, 

Peter Murcott, Roy Jennings and Michael 

Squires. (Unfortunately Ian Luder was unable 

to be present). 

limits. The Council keeps under 

review the need for internal audit at 

the Institute. Its current view is that 

a separate function is not required 

given the size and nature of the 

Institute, the close management 

supervision exercised and the 

increased attention paid to the 

adequacy of financial, operational, 

organisational and compliance 

controls and risk management. 

Key Issues Management 

The Council has delegated the 

responsibility for the Institute’s Key 

Issues Management to the Cross 

Cutting Committee, which 

comprises the Officers, Chairmen of 

the Standing Committees and 

Institute executives. The principal 

risks identified by Committees and 

the actions being taken in 

mitigation are reviewed at every 

Council meeting on a rotational 

basis. 

Going Concern 

The Council has reviewed the 

Institute’s budget for 2005 and is 

satisfied that it is appropriate to 

prepare the financial statements on 

the going concern basis. 

Organisations relevant to Chartered Tax Advisers 

The Worshipful Company of 

Tax Advisers 

The Company was formed 

independently of the Institute as a City 

Guild in 1995 with three primary 

objectives: 

• to enhance the standing of the 

profession of tax advisers in the City of 

London and ultimately to seek to 

become a City Livery Company 

• to support and fund benevolent and 

charitable causes; and 

• to provide for fellowship between tax 

advisers. 

In December 2000 the Court of 

Aldermen advanced the Guild and 

constituted it to a City Company 

without livery. 

In January 2005 the Court of Alderman 

approved The Worshipful Company of 

Tax Advisers as the City of London’s 

107th livery company. 

To further its objects the Worshipful 

Company: 

• Organises a social programme, 

covering a wide range of interests at 

which spouses and guests are welcome. 

• Supervises through its Charity 

Committee two charities 

– the Tax Advisers’ Benevolent Fund 

(registered charity no. 1049658) of 

which details are given separately in 

this note; and 

– the Guild of Tax Advisers Charity 

(registered charity no. 1064392) which 

supports education, research, City 

charities, the Company church and the 

Tax Advisers’ Benevolent Fund; 

• Participates in the ceremonial and 

social activities of the City; and 

• Maintains an affiliation with HMS 

Bangor, a Royal Navy mine-hunter. 

Freedom of the Company is open to all 

tax advisers who are appropriately 

qualified. 

The Tax Advisers’ 

Benevolent Fund 

The Benevolent Fund is mainly 

concerned with helping necessitous 

Members of the Institute or the 

Association or their dependants. 

Assistance may be given following a 

Member’s death, old age or infirmity, 

particularly where a surviving spouse or 

infant children have not been 

adequately provided for. 

The Fund is supported by donations, 

both from Freemen of the Worshipful 

Company and from Members of the 

Institute and the Association and 

their firms. 

Tax Volunteers 

Tax Volunteers was formed 

independently of the Institute and was 

incorporated on 10 September 2003 

as a private Company limited by 

guarantee. It was registered as a 

Charity on 24 February 2004 

(registered charity no.1102296) with 

the objectives of providing tax advice 

and related services to those unable to 

afford to pay professional fees, to carry 

out research into the impact of 

taxation on the poor, to publish the 

results of that research and to educate 

the public on those related issues. 

Enquiries regarding the Worshipful 

Company, the Benevolent Fund or Tax 

Volunteers should be addressed to 

Jonathan Crump, at 12 Upper Belgrave 

Street, London SW1X 8BB or 

jcrump@ciot.org.uk. 


29

Statement of Council members’ 

responsibilities and Independent Auditors’ report 


Statement of Council members’ 

responsibilities in respect of the 

preparation of financial 

statements 

Byelaw 9 requires the Council 

members to prepare financial 

statements for each financial year 

which give a true and fair view of the 

state of affairs of the Institute and of 

the surplus or deficit of the Institute 

for that period. In preparing these 

financial statements, the Council 

members are required to: 

• select suitable accounting policies 

and then apply them consistently; 

• make judgements and estimates 

that are reasonable and prudent; 

• state whether applicable 

accounting standards have been 

followed, subject to any material 

departures disclosed and explained 

in the financial statements; 

• prepare the financial statements on 

the going concern basis unless it is 

inappropriate to presume that the 

Institute will continue in business. 

The Council members are responsible 

for maintaining proper accounting 

records which disclose with 

reasonable accuracy at any time the 

financial position of the Institute and 

Officers Group of Council 2004-2005. Standing left to right: Tim Ambrose 

(immediate Past President), Bob Dommett (Secretary-General). Seated: Peter Kempster 

(Deputy President), John Beattie (President) and John Cullinane (Vice-President). 

to enable them to ensure that the 

financial statements comply with the 

requirements of the Byelaws. They 

are also responsible for safeguarding 

the assets of the Institute and hence 

for taking reasonable steps for the 

prevention and detection of fraud 

and other irregularities. 

Independent Auditors’ report to 

the Members of the Chartered 

Institute of Taxation 

We have audited the financial 

statements on pages 32 to 43. 

This report is made solely to the 

Institute’s Members as a body, in 

accordance with the Charities Act 

1993. Our audit work has been 

undertaken so that we might state to 

the Institute’s Members those 

matters we are required to state to 

them in an auditors’ report and for 

no other purpose. To the fullest 

extent permitted by law, we do not 

accept or assume responsibility to 

anyone other than the Institute and 

the Institute’s Members as a body, for 

our audit work, for this report, or for 

the opinions we have formed. 

Respective responsibilities of 

Council members and auditors 

The Council members’ 

responsibilities for preparing the 

Annual Report and the financial 

statements in accordance with 

applicable law and United Kingdom 

30

Accounting Standards are set out in 

the Statement of Council members’ 

responsibilities. 

We have been appointed as auditors 

under section 43 of the Charities Act 

1993 and report in accordance with 

regulations made under section 44 of 

that Act. Our responsibility is to audit 

the financial statements in 

accordance with relevant legal and 

regulatory requirements and United 

Kingdom Auditing Standards. 

We report to you our opinion as to 

whether the financial statements give 

a true and fair view and are properly 

prepared in accordance with the 

Charities Act 1993. We also report to 

you if, in our opinion, the Annual 

Report is not consistent with the 

financial statement, if the Institute 

has not kept proper accounting 

records, or if we have not received all 

the information and explanations we 

require for our audit. 

We read other information contained 

in the Annual Report, and consider 

whether it is consistent with the 

audited financial statements. We 

consider the implications for our 

report if we become aware of any 

apparent misstatements or material 

inconsistencies with the financial 

statements. Our responsibilities do 

not extend to any other information. 

Basis of Opinion 

We conducted our audit in 

accordance with Auditing Standards 

issued by the Auditing Practices 

Board. An audit includes 

examination, on a test basis, of 

evidence relevant to the amounts 

and disclosures in the financial 

statements. It also includes an 

assessment of the significant 

estimates and judgements made by 

the Council members in the 

preparation of the financial 

statements, and of whether the 

accounting policies are appropriate 

to the Institute’s circumstances, 

consistently applied and adequately 

disclosed. 

We planned and performed our audit 

so as to obtain all the information 

and explanations which we 

considered necessary in order to 

provide us with sufficient evidence to 

give reasonable assurance that the 

financial statements are free from 

material misstatement, whether 

caused by fraud or other irregularity 

or error. In forming our opinion we 

also evaluated the overall adequacy 

of the presentation of information in 

the financial statements. 

Opinion 

In our opinion the financial 

statements give a true and fair view 

of the state of the Institute’s affairs at 

31 December 2004 and of its 

incoming resources and application 

of resources in the year then ended 

and have been properly prepared in 

accordance with the Charities Act 

1993. 

BAKER TILLY 

Registered Auditor 

Chartered Accountants 

London WC1B 3ST 

14 March 2005 


31

Financial statements 

Statement of financial activities 

for the year ended 31 December 2004 

Incoming resources 

Incoming resources from operating activities of the charity 

Unrestricted 

Unrestricted 

Funds 

Funds 

2004 2003 

Notes £’000 £’000 


Activities in furtherance of the charity’s objects: 

Subscriptions 2,408 2,192 

Entrance fees 101 92 

Registration fees 141 148 

Certificates of eligibility 26 30 

Examination fees 382 350 

Conference fees 289 274 

Publications 64 73 

Branch events 1j 324 136 

Grant receivable 11 13 – 

3,748 3,295 

Investment Income: 

Dividend income receivable 67 69 

Interest receivable 73 42 

Total incoming resources 3,888 3,406 

Resources expended 

Charitable expenditure: 

Grants payable in furtherance of the charity’s objects 12 31 2 

Costs of activities in furtherance of the charity’s objects 13 3,024 2,888 

Managing and administering the charity 14 210 227 

Total resources expended 3,265 3,117 

Net incoming resources before investment revaluations 

and actuarial losses 623 289 

Gain on investment revaluations 4 103 139 

Actuarial losses on defined benefit pension scheme 19 (32) (21) 

Net movement in funds 694 407 

Total funds brought forward 3,095 2,688 

Total funds carried forward 3,789 3,095 

All the above results are derived from continuing activities. All gains and losses recognised in the year are included 

above. 

32 

The notes on pages 35 to 43 form part of these financial statements


Balance sheet 

as at 31 December 2004 

Notes 2004 2003 

£’000 £’000 

Fixed Assets 

Tangible assets 2 207 237 

Investments 4 1,984 1,881 

2,191 2,118 

Current Assets 

Stock 5 16 18 

Debtors 6 165 515 

Cash on short-term deposit and at bank 20 2,160 1,370 

2,341 1,903 

Creditors 

Amounts falling due within one year 7 (601) (790) 

Net current assets 1,740 1,113 

Total assets less current liabilities 3,931 3,231 

Deferred income 8 (34) (36) 

Net assets excluding pension scheme liability 3,897 3,195 

Pensions scheme liability 19 (108) (100) 

Net assets including pension scheme liability 3,789 3,095 

Income Funds 

Unrestricted 9 3,789 3,095 

Approved by the Council on 14 March 2005 

and signed on its behalf by: 

S J Beattie, President 

I W Richardson, Hon Treasurer 

R A Dommett, Secretary-General 


The notes on pages 35 to 43 form part of these financial statements 

33


Cash flow statement 

for the year ended 31 December 2004 


Notes £’000 £’000 

Net cash inflow from operating activities (see below) 742 662 

Returns on investments and servicing of finance 

Investment income 67 69 

Short-term deposits 73 42 

140 111 

Capital expenditure and financial investment 

Purchase of tangible fixed assets and investments (92) (51) 

Management of liquid resources 

Cash placed on short term deposit (421) (1,118) 

Increase/(Decrease) in cash for the year 20 369 (396) 

Reconciliation of net incoming resources to net 

cash flow from operating activities 


£’000 £’000 


Net incoming resources for the year 694 407 

Investment income and interest received (140) (111) 

Gains on fixed asset investments (103) (139) 

Actuarial losses on pension scheme 8 15 

459 172 

Depreciation charge for the year 119 115 

Loss on disposal of fixed assets 3 – 

Decrease/(Increase) in stock 2 (13) 

Decrease/(Increase) in debtors 350 (74) 

(Decrease)/Increase in creditors (191) 462 

Net cash inflow from operating activities 742 662 

34 

The notes on pages 35 to 43 form part of these financial statements


Notes to the financial statements 

1. Accounting Policies 

The financial statements of the Institute for the year ended 31 December 2004 include the results of its 

branches for the year ended 30 June 2004 and have been prepared under the historical cost convention as 

modified by the revaluation of fixed asset investments and in accordance with applicable accounting 

standards. Institute branches are not separate legal entities. The provisions of Accounting and reporting by 

Charities – Statement of Recommended Practice and the Charities Act 1993 have been adopted in these 

financial statements. The Association of Taxation Technicians of 12 Upper Belgrave Street, London SW1X 8BB 

is a connected charity but it is not subordinate to the Institute and therefore consolidated financial statements 

have not been prepared. 

(a) Depreciation 

Depreciation is calculated to write off the cost of fixed assets over their estimated useful lives on a straight line 

basis as follows: 

Office equipment 25% 

Motor vehicle 25% 

Leasehold improvements over the life of the lease 

Computer equipment 25% 

(b) Stock 

Stock is valued at the lower of cost and net realisable value. 

(c) Pension Costs 

Members of staff are eligible to join the Institute’s defined contribution retirement benefit scheme after the 

completion of a qualifying period of service. One longer serving member of staff has a defined benefit pension 

scheme. Both schemes provide individual pension plans which are managed by independent pension 

providers. Contributions to the defined benefit scheme are determined on the basis of professional actuarial 

advice. 

For defined benefit schemes the amount charged to the statement of financial activities in respect of pension 

costs and other post retirement benefits is the estimated regular cost of providing the benefits accrued in the 

year, adjusted to reflect variations from that cost. The interest cost and expected return on assets are included 

within other finance costs. Actuarial gains and losses arising from new valuations and from updating 

valuations to the balance sheet date are recognised in the statement of financial activities. 

Defined benefit schemes are funded, with the assets held separately from the group in separate trustee 

administered funds. Full actuarial valuations, by a professionally qualified actuary, are obtained at least every 

three years, and updated to reflect current conditions at each balance sheet date. The pension scheme assets 

are measured at fair value. The pension scheme liabilities are measured using the projected unit method and 

discounted at the current rate of return on a high quality corporate bond of equivalent term and currency. A 

pension scheme asset is recognised on the balance sheet only to the extent that the surplus may be recovered 

by reduced future contributions or to the extent that the trustees have agreed a refund from the scheme at the 


35


balance sheet date. A pension scheme liability is recognised to the extent that the group has a legal or 

constructive obligation to settle the liability. 

For defined contribution schemes the amount charged to the profit and loss account in respect of pension 

costs and other post retirement benefits is the contributions payable in the year. Differences between 

contributions payable in the year and contributions actually paid are shown as either accruals or prepayments 

in the balance sheet. 

(d) Deferred Income 

Student registration fees are not refundable. 50% of the fee is credited to income in the first year and 25% for 

each of the following two years. 

(e) Expenditure 

Costs of activities in furtherance of the Charity’s objectives comprise all expenditure directly relating to the 

charitable objectives. Resources expended on managing and administering the Charity include a proportion of 

the salaries of staff engaged in central management and administration and an apportionment of property 

costs calculated on the office space occupied by those staff. 

(f) Foreign Currencies 

Assets and liabilities in foreign currencies are translated into Sterling at the rates ruling at the balance sheet 

date. Transactions in foreign currencies are recorded at the rate ruling at the date of transactions. All 

differences are taken to the statement of financial activities. 

(g) Grants and Donations 

Grants and donations received are credited to income when receivable unless the donor has specified 

otherwise. 


(h) Taxation 

All income and gains are exempt from taxation and have been, or will be, applied for charitable purposes. 

Irrecoverable VAT is attributed to revenue or capital expenditure as appropriate. 

(i) Fixed Asset Investments 

Fixed asset investments have been valued at mid-market prices at 31 December 2004. 

(j) Branch Events 

The Branches’ accounting year changed in 2003 and Branches reported for six months only in that year. 

The 2004 figures represent a twelve month period. 

36


2. Tangible Fixed Assets Leasehold Office Motor Total 

improvements equipment vehicle 

£’000 £’000 £’000 £’000 

Cost at 1 January 154 973 20 1,147 

Additions – 92 – 92 

Disposals – (450) – (450) 

Cost at 31 December 154 615 20 789 

Depreciation at 1 January 61 829 20 910 

Disposals – (447) – (447) 

Charge for the year 18 101 – 119 

Depreciation at 31 December 79 483 20 582 

Net book value at 31 December 2004 75 132 – 207 

Net book value at 31 December 2003 93 144 – 237 

3. Capital commitments 

Capital commitments for fixed assets contracted for but not provided for in these financial statements amounted 

to £Nil (2003 – £Nil). 

4. Fixed Asset Investments 2004 2003 

(a) UK listed investments: 

£’000 £’000 

Market value at 1 January 2004 1,881 1,742 

Unrealised gains 103 139 

Market value at 31 December 2004 1,984 1,881 

The following investments represent a holding with a market 

value at 31 December 2004 in excess of 5% of the total portfolio: 2004 2003 

% % 

DWS – Managed Portfolio Fund (distribution units) 8.6 8.5 

RCM – Chariguard Fixed Income Fund (income unites) 12.3 12.8 

M&G – Charibond Fixed Interest Common Investment Fund (income shares) 12.6 13.2 

Merrill Lynch – Charinco Common Investment Fund (income shares) 12.3 12.8 

Merrill Lynch – Charishare Common Investment Fund (income shares) 9.8 9.5 

Norwich Union – Property Trust (distribution units) 9.5 8.8 

Schroders – Charity Equity Fund (income units) 8.3 8.2 

Cazenove – Portfolio Fund (income shares) 9.0 9.0 

HSBC – FTSE All Share Index Fund (income shares) 8.4 8.1 

Mellon – Newton Managed (GBP income shares) 9.2 9.1 

100.0 100.0 


37


5. Stock 2004 2003 

£’000 £’000 

Publications and merchandise 16 18 

6. Debtors 2004 2003 

£’000 £’000 

Other debtors 62 84 

The Association of Taxation Technicians 63 379 

Prepayments and accrued income 40 52 

165 515 

7. Creditors: Amounts falling due within one year 2004 2003 

£’000 £’000 

Taxes and social security 43 – 

Accruals 113 118 

Fees and subscriptions received in advance 445 672 

601 790 


8. Creditors: Amounts falling due after one year 2004 2003 

£’000 £’000 

Student registration fees: 

At 1 January 107 103 

Fees received 141 148 

Transfer to income in year (144) (144) 

At 31 December 104 107 

Subscriptions and other fees 375 601 

Fees and subscriptions in advance (see note 7) (445) (672) 

34 36 

38


9. Income Funds – Unrestricted Movements in funds 

At Income Transfers/ At 

1.1.04 expenditure 31.12.04 

£’000 £’000 £’000 £’000 

General 2,481 691 (342) 2,830 

Designated: 

Premises 400 – 300 700 

Examination prizes 59 3 (3) 59 

Disciplinary procedures 155 – 45 200 

3,095 694 – 3,789 

Designated funds have been set aside by the Council 

for the purposes specified on page 7 

10. Commitments under operating leases 2004 2003 

The Institute has annual commitments under £’000 £’000 

an operating lease as follows: 

Lease expiring between two and five years 135 – 

Lease expiring after five years 

(leasehold property expiring 2009) – 135 

11. Grant receivable 2004 2003 

Grant receivable to help meet the core operating costs £’000 £’000 

of the Tax for Older People project funded by the Low 

Incomes Tax Reform Group 13 – 

12. Grants payable in furtherance of the charity’s objects 

Grant payable to tax charities to help meet the core operating costs of providing free tax advice to persons who 

cannot afford to pay for professional help and to promote public understanding of tax matters: 


£’000 £’000 

TaxAid (registered Charity no. 1062852) 2 2 

Tax Volunteers (registered Charity no. 11002276) 14 – 

16 2 

Grants payable to five University Students for original tax 

research from the following Universities: Exeter, Cambridge, 

Bournemouth & Queen Mary’s, London 15 – 

31 2 


39


13. Costs of activities in furtherance of the charity’s objects 

Total Total 


Notes £’000 £’000 

Membership 577 524 

Education 301 342 

Technical 28 29 

Low Incomes Tax Reform Group 14 30 

Branches 288 168 

Marketing and public relations 19 48 

Staff costs 15 1,603 1,546 

Property 214 175 

Confédération Fiscale Européenne 10 10 

Postage and telephone 126 126 

Computer costs 157 148 

Legal and professional 13 44 

Repairs and general expenses 32 43 

Printing and stationery 85 82 

Depreciation 119 115 

Partial recovery of non-directly attributable VAT (23) (26) 

Service charges payable by The Association of Taxation Technicians 17 (539) (516) 

3,024 2,888 


14. Managing and administering the charity Total Total 


Notes £’000 £’000 

Council 16 62 67 

Staff costs 15 118 106 

Legal and professional 1 20 

Audit 13 13 

Property 16 21 

210 227 

15. Personnel 

All members of staff are jointly employed by the Institute and The Association of Taxation 

Technicians. All costs are initially disbursed by the Institute and an agreed proportion is 

attributed to the Association. 

The Institute has maintained liability insurance throughout the year to pay on behalf of the 

Institute or its Council, committee members and staff, any claims for wrongful acts arising out of 

40


the conduct of the Institute’s business, or committed in their capacity as officers. The insurance 

premium paid by the Institute covering both claims against the Institute and the Trustees 

personally amounts to £7,000. 

The Institute operates both defined benefit and defined contribution pension schemes whose 

assets are held separately from those of the Institute in independently administered funds. The 

pension cost charge represents pensions paid to retired staff and staff pension contributions. 

Contributions payable by the Institute amounted to £156,000 of which £36,000 related to the 

defined benefit scheme. There is no excess of accumulated pension funding over the amounts 

payable to date. 

The average number of employees is 49 (2003 – 48) and the number whose salary and benefits in 

kind, including pension contributions, fell within the following scales is as follows: 


£50,001 – £60,000 3 2 

£70,001 – £80,000 1 1 

£100,001 – £110,000 – 1 

£110,001 – £120,000 1 – 


Total Staff Costs: £’000 £’000 

Salaries 1,372 1,299 

Social Security 144 136 

Other pension costs 129 128 

Other staff costs 76 89 

1,721 1,652 

16. Council 

Council members receive no remuneration for their services. Their travelling expenses are 

reimbursed in respect of expenses incurred on Institute business. In the year ended 31 December 

2004, 32 Council members claimed reimbursement of travelling expenses aggregating to £62,000 

(2003 – 32 claimed £67,000 for the year). Council members pay subscriptions on the same basis as 

other members. 

17. The Association of Taxation Technicians 

The Association is a connected charity in that it has common, parallel or related objects and 

activities and unity of administration with the Institute. All employees are jointly employed by 

the Institute and the Association. Labour, operating and overhead costs borne by the Institute on 

behalf of the Association are charged to the Association on a quarterly basis using a simple and 


41


equitable formula agreed by both parties. The formula to be applied until 2006 inclusive was 

agreed at a meeting of the officers of both parties in January 2003. The total service charge for the 

year of £539,000 is shown in note 13 to the financial statements and the balance outstanding at 

the balance sheet date was £63,000. 

18. The Taxation Disciplinary Board 

The Institute and the Association have a joint arrangement with the Taxation Disciplinary Board; 

a company limited by guarantee managed by an independent board of directors. Neither the 

Institute nor the Association exercise a significant influence over the operating and financial 

policy of the company whose object is to administer the Taxation Disciplinary Scheme for them. 

19. Pension Schemes 

The Institute operates both defined contribution and defined benefit schemes which are managed 

by three independent pension providers. A full actuarial valuation was carried out at 31 December 

2004 on the defined benefit scheme in the UK by a qualified independent actuary. The major 

assumptions used by the actuary were: 

2004 2003 2002 

% % % 


Rate of increase in salaries 4.0 4.0 3.9 

Rate of increase in pensions in payment 3.0 3.0 3.0 

Discount rate 5.2 5.3 5.3 

Inflation assumptions 2.5 2.5 2.4 

Expected long term rate of return 6.0 6.0 6.0 

The assets in the scheme were: 2004 2003 2002 

£’000 £’000 £’000 

With profits policies 258 216 193 

Total market value of assets 258 216 193 

Present value of scheme liabilities 366 316 278 

Deficit in the scheme (108) (100) (85) 

Analysis of the amount charged to costs of activities £’000 £’000 

Current service cost and total operating charge 8 8 

Analysis of the amount debited to investment income 

Expected return on pension scheme assets 12 12 

Interest on pension scheme liabilities (15) (15) 

Net return (3) (3) 

42


Analysis of the amount recognised in the movement in 2004 2003 

pension scheme liability £’000 £’000 

Actual return less expected return on pension scheme assets (9) (6) 

Experience gains and losses arising on the scheme liabilities (17) (6) 

Changes in assumptions underlying the present value of the 

Scheme liabilities (6) (9) 

Actuarial loss (32) (21) 

Movement in pension scheme liability in the year 

Deficit in scheme at beginning of the year (100) (85) 

Movement in the year: 

Current service cost (8) (8) 

Contributions 35 17 

Past service costs 0 0 

Settlements and curtailments 0 0 

Other finance income (3) (3) 

Actuarial loss (32) (21) 

Deficit in scheme at end of the year (108) (100) 

History of experience gains and losses 

Difference between the expected and actual return 

on scheme assets 

Amounts (£’000) (9) (6) 

% of present value of scheme liabilities 3.5% 2.9% 

Total actuarial loss recognised in movement in 

Pensions scheme liability 

Amount (£’000) (17) (21) 

% of present value of scheme liabilities 4.6% 6.7% 

Notes: 

Employer contributions are currently being made at a rate of £1,500 per month. 

Under the projected unit method, the current service cost will increase as the employee approaches retirement. 

20. Analysis of changes in cash and short-term deposits 

At Cash At 

01.01.04 Flows 31.12.04 

Cash 189 369 558 

Cash on short-term deposit 1,181 421 1,602 

1,370 790 2,160 


43

Committees of Council 

Committees of Council 2004-2005 

Officers Group 

David Frost 

Steve Hines 

Liz Lathwood 

CIOT Exam Sub- 

John Beattie (Chairman) 

Penny Hamilton 

Peter Kempster (ExO) 

Bianca Marsden 

Committee/ATT Exam 

Peter Kempster (Vice- 

Marion Hodgkiss 

Bradley Linehan* 

Hazel Mazelin-Forbes 

Committee 

Chairman) 

Chris Jones 


Brian McGinnis 

Roger Barnard (Chairman) 

Tim Ambrose 


Phillip Pearson 

Paddy Millard 

Tim Ambrose 

Les Beckett ATT 

Niki Maynard 

Andrew Pickering 

Jane Moore 

Annie Bailey 

John Cullinane 

Andrew Meeson 

William Norris 

Kenneth Crofton Martin 


Paul Morton 

Technical Committee 

Robin Rattray 

David Cory 

Jenny Nelder 


Janet Tish 

Karen Eckstein 

Education Committee 

Yvette Nunn 

(Chairman) 

Sally West 

Richard Geldard 

Robert Ellerby (Chairman) 

Sacha Pertwee 


Bearnard White 

Simon Groom 

Philip Ridgway (Vice- 

John Preston 

(Vice-Chairman) 

Robin Williamson 

Nick Lloyd 

Chairman) 

Patrick Stevens 

Derek Allen (ICAS)* 

Tim Ambrose 

John Andrews (LITRG) 

Cross-Cutting Committee 

Advanced Diploma in 

Annie Bailey 

Standards Committee 

John Beattie (ExO) 


International Tax Sub- 

Philip Baker 

(Joint CIOT/ATT) 

John Cullinane* 

(Chairman) 

Committee 

Roger Barnard 

Anthony Thomas (Chairman) 

David Earle 

Tim Ambrose 

Tim Ambrose 

John Beattie 

Carol Clayton (Vice- 

Maric Glaser 

John Andrews 

Philip Baker 

John Dewhurst 

Chairman) 

Ian Hayes (ICAEW) 

Rosalind Baxter 


Peter Goodman 


Andrew Hubbard (ATT) 

John Beattie 

Eleni Tryphonas 

Kim Harmer 

Les Beckett (ExO) 


Chris Brydone 

Jeff VanderWolk 

Barry Jefferd 

Rosemary Blundell 

Francesca Lagerberg (ICAEW) 

Jonathan Crump 

Raymond Kelly 

John Cullinane (ExO) 

Richard Mannion 

John Cullinane 

Tax Adviser Sub- 


Karen Eckstein 

Alex McDougall (ICAS)* 

Maureen Davis 

Committee 

Angharad Miller 

John Elliott 

Simon McKie 


Patrick Stevens (Chairman) 

Ian Wilson* 

Susanna Hanks± 

Tom Melvin 


Tim Ambrose 

John Preston 

Jean Jesty 

Lakshmi Narain* 

Steve Hines 

Paul Connolly 

Prof John Tiley 

Susan Johnson 

Peter Nias* 

Peter Horsman 



Treasurer’s Committee 

Ian Richardson (Chairman) 

John Gilmour (Vice-Chairman) 

Tim Ambrose 




Richard Geldard 

Phillip Gillett 


Peter Newsam 

Membership Committee 

Peter Horsman (Chairman) 

Nick Goulding (Vice- 

Chairman) 


David Bull 

Paul Connolly 


Stuart McKinnon 

Julian Nelberg 

John Roberts 

David Stedman 

Rosalind Upton 

John Weston 

David Williams 

IT and Website 

Committee 

Chris Jones (Chairman) 

Tim Ambrose 

Mohammed Amin 

Simon Banton* 

Rosalind Baxter 

Jonathan Crump 

Maureen Davis 


Alan Fleming* 

Vincent Oratore 

Anne Redston* 

Heather Self 

Kevin Slevin 

John Whiting 

Audit Committee 

Peter Murcott (Chairman) 

Raymond Fear 

Peter Gravestock 

John Whiting 

Low Incomes Tax Reform 

Group (LITRG) 

John Andrews (Chairman) 

Charlotte Barbour 

Leonard Beighton 

David Brodie 

Martin Hodgson 

Sue Jones 

Chris Jones 



Phillip Pearson 



Branches Forum 

Christopher Brydone 

(Chairman) 


John Cullinane (ExO) 

Andrew Hubbard (ExO) 

Chris Humphreys+ 


Hazel Slater+ 

Jeffrey Smith+ 

Michael Warburton Wood+ 

Jean Jesty 

Neil Owen 

Andy Pickering 

* Co-opted Member 

+ Regional Co-ordinator 

± Observer 

44

Technical sub-committees 

Technical sub-committees 

Technical committee 

I Personal Taxes 

Stephen Reisbach 

Peter Mason 

Anne Redston (Chairman) 

Philip Ridgway 

Alex McDougall 

Colin Ben-Nathan (Vice-Chairman) 

Adrian Rudd 

David Ratcliffe 

Martin Benson 

Heather Self* 

Alan Sinyor (Vice-Chairman) 

Valerie Boggs 

David Southern 

Wreford Voge 

Bob Crawford 

Julie Watterston 

Jeremy White 

Andrew Disley 

Neil Webb 

Nigel Doran 

V International Tax 

Eleanor Dowling 

III Capital Taxes 

Peter Nias (Chairman)* 

David Earle* 

Simon McKie (Chairman)* 

Philip Baker 

Andrew Flint* 

Sharon Anstey 

Peter Cussons 

Keith Gordon 

Emma Chamberlain 

John Dewhurst 

David Heaton 

Giles Clarke 

Bill Dodwell 

Francesca Lagerberg* 

Martyn Gowar 

Anne Fairpo 

Rachel McElene 

Warwick Hensley 

Glyn Fullelove 

Kevin Miller 

David Hughes 

Malcolm Gammie 

Natalie Miller 

Matthew Hutton 

Anton Hume 

Graeme Stenson 

Christine Keiffer 

Rhona Irving 

Paul Tucker* 

Alex McDougall 

Thomas Melvin* 

Wreford Voge 

Claire Murray 

Ian Menzies-Conacher (Vice-Chairman) 

Stephen Ward 

David Perrin 

Gerry O’Brien 

Philip Wylie 

Nigel Popplewell 

David Oliver 

Bernard Rose 

Andrew Roycroft 

II Corporate Tax 

Bruce Sutherland 

Jonathan Schwarz 

Lakshmi Narain (Chairman)* 

Michael Thomas 

Arnold Sherman 

Tim Ambrose 

Robin Thomas 

Jason Short 

Mohammed Amin 

David Williams 

Joy Svasti-Salee 

Mark Balatoni 

Jon Zigmond (Vice-Chairman) 

Eric Tomsett 

Steve Bond 

David Boneham 

Patrick Cannon 


Victor Dauppe 

Anthony Davis 

Jonathan Fursdon 


Philip Gillett (Vice-Chairman) 

Kim Harmer 

Alex Klemm 

John Lindsay 

Christine McElroy 

Thomas Melvin 

John Messore 

Simon Newsham 

David O’Keeffe 

Vincent Oratore* 

Sacha Pertwee 

IV Indirect Taxes 

Maric Glaser (Chairman)* 

Mike Arnold 

Richard Baxter 

David Bertram 

Stephen Coleclough* 

Nick Cronkshaw 

Ewen Cunningham 

Paul Farmer 

Hugh Faulkner 

Douglas Gordon 

Peter Gravestock 

Penny Hamilton* 

Richard Iferenta 

Tony Jackson 

Peter Landon 

Daniel Lyons 

Claire Mainprice 

VI Tax Policy 

John Whiting (Chairman)* 

Tim Ambrose (Vice-Chairman)* 

Robert Chote 


David Earle* 

Nigel Eastaway* 


Maric Glaser* 

Penny Hamilton 

Simon McKie* 

Lakshmi Narain 

Anne Redston 

Peter Nias 

Chris Sanger 

* Member of Technical Committee 


45

Notice of meeting 

Notice of Annual General Meeting 

Notice is hereby given that the Twelth Annual 

General Meeting of Members of the Chartered 

Institute of Taxation will be held at: 

The Brunel Room 

One Great George Street, Westminster 

London SW1P 3AA 

4. To re-elect as Members of the Council the 

following who were co-opted and retire under 

Members’ Regulation 29: 

(a) Philip Gillett 

(b) Andrew Hubbard 

(c) Natalie Miller 

(d) Jenny Nelder 

on Tuesday 10 May 2005 at 16.15 

1. To receive and adopt the Report of the Council for 

2004. 

5. To re-appoint Baker Tilly as auditors to the Institute 

to serve from the termination of the meeting until 

the termination of the next succeeding Annual 

General Meeting. 

2. To receive and adopt the audited Financial 

Statements of the Institute for the year ended 

31 December 2004. 

Special Business 

6. To consider and if thought fit to pass the following 

as a Special Resolution: 


3. To re-elect as Members of the Council the 

following, who retire by rotation under Members’ 

Regulation 30: 

(a) Colin Ben-Nathan 

(b) Stephen Coleclough 

(c) Peter Kempster 

(d) Paul Morton 

(e) Vincent Oratore 

(f) Anne Redston 

(g) Ian Richardson 

(h) John Roberts 

(i) Robert Venables 

In accordance with Article 6(2)(b) of the Charter of 

the Institute, IT IS HEREBY RESOLVED that, subject 

to such minor modifications as the Privy Council 

may require and the Council of the Institute may 

agree, the Byelaws of the Institute shall be 

amended as follows:- 

1. In Byelaw 2(10) delete sub-paragraphs (d) and (e) 

(up to and excluding the proviso). 

2. After Byelaw 2(10) insert 

“2(10A) 

(a) If a member enters into an Individual Voluntary 

Arrangement (“IVA”) with his creditors or becomes 

subject to a bankruptcy order he shall notify the 

Institute within 30 days of the date of the IVA or 

order. If a member fails to notify the Institute, his 

membership of the Institute shall cease 

automatically upon the expiry of the 30 days, and 

the terms of paragraphs (ii) and (iii) of the proviso 

to Byelaw 2(10) shall apply. 

46


(b) Where a member notifies the Institute in terms 

of this Byelaw, the Institute reserves the right, in 

accordance with procedures to be determined by the 

Council, to seek further details and to suspend or 

terminate a person’s membership for the duration of 

any IVA or bankruptcy order and of any subsequent 

Bankruptcy Restrictions Order or Undertaking.”. 

7. To consider and if thought fit to pass the following 

as a Special Resolution: 

IT IS HEREBY RESOLVED that the Members’ 

Regulations be amended as follows: 

1. Delete Members’ Regulations 10 and 10A, 

including the heading before 10 (show as “10 and 

10A Deleted”). 

2. In Members’ Regulation 44(o) after “under 

Regulation 44(n), the Disciplinary Committee” 

insert “established by any such scheme referred to 

in Regulation 44(n)”. 

Explanatory Notes 

Item 6: The Institute has reviewed the provisions under 

which personal insolvency has hitherto led to de facto 

exclusion from membership. The view is now taken that 

exclusion should not be automatic, but that members 

should henceforth be obliged to notify the Institute if they 

enter into an Individual Voluntary Arrangement with 

creditors or are made subject to a bankruptcy order by the 

court. Subject to further enquiries, the Institute will be able 

to exercise discretion as to whether exclusion is appropriate, 

and in practice decisions on any such case will be made 

within two months of receiving notification. 

These changes are given effect by the deletion of Byelaw 

2(10)(e). Paragraph (d) is also deleted. This provided for the 

exclusion from membership on grounds of mental disorder. 

This is now thought to be appropriate only in the context of 

removal from an office. 

Item 7: Members’ Regulations 10 and 10A are obsolete 

following the establishment of the scheme under which 

disciplinary matters are referred automatically to the 

Taxation Disciplinary Board. 

Byelaw 2(9)(e) provides that Members’ Regulations may 

prescribe the circumstances in which and the conditions 

subject to which a firm or company which includes 

members of the Institute amongst its members, partners or 

directors may use the description “Chartered Tax Advisers” 

in relation to the firm or company. This matter is dealt with 

in Members’ Regulation 44. It is proposed that compliants 

against such firms or companies (in relation to the use of 

the title) should fall to be dealt with by the Taxation 

Disciplinary Board (“TDB”). The amendment to Members’ 

Regulation 44(o) is designed to found the appropriate 

jurisdiction. 

By order of the Council 

Robert A Dommett 

Secretary-General 



14 March 2005 

Notes 

(a) A person entitled to attend and to vote is entitled to 

appoint a proxy or proxies to attend and on a poll to 

vote instead of him or her. A proxy must be a Member 

of the Institute. A form of proxy is enclosed with this 

notice for use in connection with the meeting. To be 

valid a form of proxy must reach the Secretary-General 

of the Institute at 12 Upper Belgrave Street, London 

SW1X 8BB not later than 48 hours before the time of 

the meeting. 

(b) A person who has appointed a proxy may 

nevertheless attend the meeting and vote, in which 

case any votes cast by proxy will be superseded. 


47



48



Tax Advisers 


London SW1X 8BB

Annual report and accounts 2004 - The Chartered Institute of Taxation

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