What is the Institute of Chartered Accountants complaining about?

It believes the tax system has spun out of democratic control.

Its respected Tax Faculty, the focus for members who work in tax areas, claims everyone in the country, from employees to pensioners and the self-employed, is affected by failures in the system.

Rather than identifying specific problems, it says there are four big areas where the tax system is not working.

Firstly, it says the system is far too complicated.

Secondly, it believes there are too many anomalies in tax law.

Thirdly, it says there is a "culture of never-ending change" in the Inland Revenue, where rules are continually made, only to be qualfied later.

And fourthly, it says the system is lacking in democratic control.

Why do they say the tax system is "undemocratic"?

The Institute complains that the tax system is undemocratic for two big reasons.

First, it says the system is not properly scrutinised by Parliament.

Its senior technical manager Francesca Lagerberg points out that many of the big changes in the tax system are not debated in the House of Commons. Only the most sweeping principles are included in the Finance Bill and debated after Budget Day. Many big changes are instead included in draft regulations laid before the House (secondary legislation).

The accountants also say the Inland Revenue and Customs & Excise are making important changes simply by issuing guidance notes.

In theory these only represent the tax authorities' interpretation of the law. But in practice the guidance is treated as if it is the law (tertiary legislation).

The second reason is that the Inland Revenue and Customs & Excise do not always consult the accountants who have to put their rulings into practice.

What lies behind the complaints?

There's tension between the accountancy profession and the tax authorities.

This has always existed. But the tension has worsened following a string of recent disagreements.

Accountants have accused the Inland Revenue of a high-handed attitude over Self-Assessment, the new system which obliges taxpayers to tell the Revenue what they owe (instead of the other way around).

They say the Revenue has made numerous administrative blunders, like getting credits mixed up with debits on thousands of tax statements.

Yet mistakes by taxpayers are punished with fines. The biggest recent row has been over IR35, a highly controversial guidance note issued this summer by the Revenue.

This attempted to stop a form of tax avoidance in which employees form their own companies and work as contractors, reducing the tax burden for both employer and employee.

The Revenue's guidance was to the effect that anyone working under the supervision and control of one employer would be treated for tax purposes as an employee.

The accountants complained this would catch legitimate companies. It would hit sole-trading IT consultants who end up with just one client, or even vets who work one day a week at a zoo.

There was no prior consultation.

After a public uproar, the Revenue retreated and said it would only apply the rule to contractors who had "the attributes of an employee".

The accountants say this still leaves the tax inspector with far too much discretion.

In what way is the tax system said to be too complicated?

If you read the above answer, you'll already know why. Francesca Lagerberg points to the document which is meant to help self-assessed taxpayers work out their tax. It's 28 pages long.

The "culture of never-ending change" refers to the tax rules.

Because the Inland Revenue wants to stop tax avoidance, it plays a constant game of cat-and-mouse with tax accountants.

As soon as accountants find a way around a tax rule, the Inland Revenue makes another one to close the loophole.

Each Finance Bill, together with regulations, runs to hundreds of pages, and it is not always clear whether the rules are achieving their objectives.

So how, if at all, should it be changed?

The accountants want all tax laws to be in primary legislation, going before MPs, rather than in the form of "guidance".

They want the Revenue and Customs to be under a "Code of Simplicity" requiring them to make the rules simple, to state why new rules are necessary, and to say what they hope to achieve.

They want the tax rules to be fair and reasonable, and framed to encourage investment.

What does the Inland Revenue say about all this?

The Revenue points out it does consult on many tax issues. It says it is under the democratic control of elected ministers.