Ritchie\’s new report

Adoption of this policy would require reversal of the policy of reducing staffing at HM Revenue & Customs by 15,000 people over the period to 2015 and recruiting new staff at Companies House as opposed to the 250 redundancies announcedv in March 2011.

Strangely, this report is not funded by PCS, the union which represents such workers and which Ritchie does work for.

An indirect rather than direct influence perhaps?

Page 18 is fun, where he describes his own behaviour with Fulcrum Publishing Ltd and The Tax Gap Ltd. Here, on the benefits of income splitting, the use of dividends to dodge national insurance and the small companies tax free profits exemption, I am prepared to admit that Ritchie is expert. After all, he\’s actually done this and I haven\’t.

The rest of it is really quite simple. Forming a company is too easy and too cheap therefore we must raise the price of doing so.

Seems fair really: after all, Ritchie now does his business through an LLP, which wouldn\’t be affected, would it?

7 comments on “Ritchie\’s new report

  1. It seems an amazing coincidence that Ritchie publishes this report just 7 weeks after Caroline Lucas asks some very detailed questions in the Commons about company filings and striking off (see appendix 2).

    Tim adds: The press release makes it clear that the report is based upon those questions.

  2. Page 8…

    “No company should be allowed to apply to be struck from the Register of Companies unless it has filed a set of accounts ending not less than nine months before the application for striking off is made.”

    Amerland Organisation Limited (previously MURPHY DEEKS NOLAN CONSULTANCY LTD), company number 01930977:

    652a 31/10/2003 APPLICATION FOR STRIKING-OFF

    AA 11/12/2002 TOTAL EXEMPTION FULL ACCOUNTS MADE UP TO 31/10/02

    Tut, tut!

  3. That is a truly amazing laundry list of new bureaucratic requirements, with not the slightest attempt to estimate the compliance cost he’s creating. Richie also continues to ignore the reality that most of the “tax gap” reflects the black/informal economy – so it’s most unlikely to be affected by changes in company law. What this is really about is Richie’s lack of understanding, and therefore suspicion, of business and of companies.

  4. The privatisation of corporate tax collection could raise a fortune. I wonder if Ritchie will advocate that?

    Or could it be that his “research” is flawed?

  5. ” Forming a company is too easy and too cheap therefore we must raise the price of doing so.”

    Because those countries – for example in Sub-Saharan Africa – which have a high price and/or significant bureaucratic hurdles for forming companies are doing spectacularly well and we would want to emulate them.

    Oh. Wait….

  6. so… 570,000 are operating in the UK without filing tax returns. Hmmm… why on earth do they draw attention to themselves by registering in the first place?

    And to reach a sum of £16 billion, we are looking at very healthy profits indeed, often from inception. Average tax evasion of £28,000 per company! Is this typical of the average failed company? Not to mention that the figure of 570,000 includes a large proportion which have never traded…

  7. Richie has been banging on about the cost of incorporation for some time suggesting that the government should massively increase the cost of incorporate and annual returns to reduce the risk of using limited liability for nefarious purposes.

    He cites the fact that once can form a company for £30 and an annual return is set at £15. And has argued on his blog that this should be massively increased.

    Unfortunately to increase the fees would contravene EU Law where excessive fees on incorporation are considered an indirect tax on capital and therefore contravene a number of EU directives dating back to 1969. Therefore the EU has dictated that company registries must be run on a cost recovery basis and cannot make a “profit”. End result companies are cheap and plentiful and lots of people can use them.

    Whether or not this is a good idea is irrelevant, the real point is there is nothing the UK can do about this except change an EU law which has been around for 50 years or thereabouts.

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