We are delighted to feature an interview with Ray McCann. Ray McCann is a CTA (Fellow) and Council member of the Chartered Institute of Tax. He has 40 years' experience of UK and international tax, including 31 years with HMRC. At HMRC he was responsible for the introduction of DOTAS and he also set up the Business Tax Clearance Team and the Avoidance Intelligence Unit. Ray is a partner at New Quadrant Partners, a boutique private client legal practice and advisory service based in London.
Why did you get into tax?
The mid 1970's was a difficult economic time in the UK and it seemed clear that a major contraction was likely to occur in the job market. I had a real sense that getting a job (any job) and some financial independence was more important than continuing in education. As it happened the Inland Revenue were the largest employer in the town so a Revenue role was a obvious choice especially since a number of my peer group were moving in the same direction. With hindsight it was a great choice and almost everything I have achieved since I attribute to the opportunity to learn and grow which the Revenue offered in those days. There was also cheap beer and a snooker table in the office club as well as large numbers of girls which was quite important at 19 although not necessarily in that order! I stayed for 31 years obviously not for the money.
Who has been the most influential role model for your professional life?
That is a really interesting question and in reality there has been no single role model over the years or at least no constant. I developed a way of trying to adopt the best traits of those around me and in the wider environment whilst steering clear of any negative influences and found that I was particularly attracted to individuals who I felt were able to “operate” and by that I mean succeed in spite of the difficulties they faced by finding a way whether it was an “impossible task” (not an uncommon situation for a Tax Inspector or client adviser) or “impossible person” (also not uncommon!). Early on I had a woman boss who was one of the first women to break through into the traditionally male dominated Revenue investigation roles in Scotland, she told me once that “when you make a mistake, just admit it and move on, it’s the cover up that will bring you down”. It was great advice at the time and these days even more important. In my Revenue days I had this image of the dogged investigator putting together the clues from scraps of paper in my mind and lots of Revenue work was like that. Interestingly enough I recently met Carl Bernstein, the Washington Post journalist, who, along with Bob Woodard, exposed President Nixon and Watergate. He was and is a hero of mine and at the time their determination to expose the cover up and the increased sense that the state was watching you had a big influence on the self image I had of what interested me. It was however a little disconcerting giving a presentation with him staring at me!
What do you see as the biggest trend affecting the private client tax world over the next 10 years?
There is no doubt that the world has changed for us all. I suspect that “acceptable tax planning” will be further constrained in the coming years as more and more questions are asked of Government as to why tax privileges are afforded to some groups at the expense of others and a more critical eye is cast on the cost of providing such tax reliefs. The other trend that will continue in the UK in particular is the Government’s efforts to substantially increase the downside risk for wealthy taxpayers who do not comply fully with tax law. High net worth taxpayers will undoubtedly have to invest more in trusted advisers who can help them ensure that their tax exposures and crucially their compliance is effectively managed. Too often in the past some advisers failed to have proper regard to the risk of an unwelcome investigation and they misjudged the attitude of the Taxman! As HMRC contracts we will see less routine intervention but an increase in more intrusive investigations when errors do come to light. The days of being able to hide assets from the Revenue authorities are over for anyone other than the most determined and due to naming and shaming powers and possible criminal sanctions awaiting anyone who is willing to take the risk the stakes will be increasingly very high with significantly more data available to the authorities.
What is the most important change to the UK’s tax system that you would implement, if you could do so tomorrow?
I would restore to HMRC the discretion to make judgements in the interests of getting issues closed. At present too often HMRC is running scared of being criticised and it has led to an aversion to taking risks and an enormous build up of legacy work that it is difficult to see how it will ever be cleared. Too much HMRC time is now being spent on simply managing that workload rather than dealing with it and the effect on HMRC is all too obvious with seemingly rock bottom service standards and staff morale. It is essential in my view that “ordinary” taxpayers should be able to engage with the UK tax system effectively. The fact that HMRC receives millions of enquiries from taxpayers each year and thousands of taxpayers struggle with basic compliance prevents any real improvement and is clear evidence that the UK tax system needs a major overhaul.
In a movie of your life story, which actor or actress would you like to play you?
Groucho Marx, I like to crack jokes!
What would be your dream job if you didn’t work in tax?
I would be the guy that puts together the film and music composites that the BBC and SKY show at the end of big sporting events, I am not sure what it actually involves but finding the right clip from weeks of sporting events and matching that to precisely the right piece of music is really cool and when it works they are a few minutes of magic!
What is your biggest extravagance?
My guitar collection, I have twelve now and I need to stop! Fender, Gibson, Taylor they are all there, my wife complains that I can only play one at a time, the neighbours complain that I cannot even manage that. Unfortunately they are right but they put a smile on my face even if my playing is unlikely to be in demand anytime soon.
What do you do to relax?
I like to spend time with my grandchildren, they are great and keep me grounded, I have four so it is “I love you Grampa, can I get an ice cream” that sort of stuff. My wife and I like to travel a lot and this year we have been in Paris, Ireland, Cornwall, Scotland, Barbados, US and Portugal. I also go mountain walking each year with a group of old Revenue friends and we have walked and drunk our way around the UK, Ireland and Europe although they have been more hills than mountains in the past couple of years. I listen to a lot of music, read and try to go to the theatre or music venue as often as I can.
What is your favourite holiday destination?
Almost anywhere in Italy and the Bahamas.
What piece of advice would you give your 25-year-old self?
Don’t be so concerned about tomorrow that you lose sight of what’s special about today, have a plan, focus on your development and the future will take care of itself. But above all don’t beat yourself up over your mistakes, the best version of you is always yet to come!