No Richard, no

Sorry Laura; that’s just wrong. The duty of a company that wants to be a good corporate citizen – or even just law abiding – is to be tax compliant. Tax compliance is seeking to pay the right amount of tax (but no more) in the right place at the right time where right means that the economic substance of the transactions undertaken coincides with the place and form in which they are reported for taxation purposes.

In that case the only duty a company has is to pay the right amount of tax in the right place at the right time. Deciding to do otherwise is always tax avoidance.

Sorry, but you can\’t say this.

\”law abiding\” and \”tax avoidance\”. By definition you can be law abiding and engaging in tax avoidance. Because, by definition, breaking the law to dodge taxes is not tax avoidance, it\’s tax evasion.

Tax avoidance is, again by definition, legal and thus you can do it and be law abiding.

19 comments on “No Richard, no

  1. What does ‘tax compliant’ mean anyway? If it’s a technical term, a term of art, I can only imagine that tax avoidance would be, by its own definition, ‘tax compliant’. If it’s being used in a nontechnical, handwaving, ‘pay whatever I say is right to pay’ way, then I can see how tax avoidance is non-compliant. But in that case you could still be law-abiding and yet not tax compliant.

  2. The very worst part of this whole thing is that it provides the Murphy with media opportunities so we have to watch and listen to his arrant twaddle.

  3. God, the man is such a knob.

    Engaging in tax avoidance is, by definition, being ‘tax compliant’. If your actions are NOT ‘tax compliant’ you are, by definition, engaging in tax evasion – NOT tax avoidance.

    I’ve been told that it’s tougher to become a CA in the UK than to become a CPA in the USA. If Richard Murphy is a CA in good standing, then the emprical evidence suggests otherwise. With his level of professional competence, Murphy should be washing dishes in a pub somewhere in Brixton.

  4. As I’ve said several times, Murphy is a moralist. So he sees the law as an expression of moral virtue, and abiding with the law is an act of moral will.

    Sorry Laura; that’s just wrong. The duty of a company that wants to be a good corporate citizen – or even just law abiding – is to be tax compliant.

    Hence in his formulation, being a “good citizen” and “law abiding” are synonymous, because the law is an articulation of morality. Somebody who just obeys the letter of the law is failing in that regard. The statute as written is simply an urging towards general moral behaviour, like the Bible.

  5. ian B (#6) In which case Ritchie is obviously an immoral individual in his own construction. As are his chums at the Grauniad.

  6. IanB –

    Quite so. But it’s not just Murphy. It’s the Left generally. That’s why MacMillan could say, “The Labour Party is a moral crusade or it is nothing”. And it why that old chestnut has more that a ring of truth to it, that the Right regard their opponents as mistaken, while the Left regard their opponents as evil. This goes back to your thesis about Anglo-Socialism.

  7. I hate to get all legal on Ritchie but needs must. Section 172 of the Companies Act 2006 sets out the duties of directors quite explicitly. Thier number one duty is to “promote the success of the company for the benefit of the members as a whole”.

    In doing that the directors must have regard to a range of touchy feely subjects such as the interests of employees, relationship with suppliers, impact on the environment, reputation of the business etc etc. But those are all secondary considerations to the primary function which is to promote the success of the company.

    If say a Bank has found a way to lawfully reduce its tax bill by say £500 million, so that instead of giving that money to the government it instead gives it to the shareholders it has quite properly promoted the success of the company in the interests of the members.

    It is not only tax compliant it is entirely consistent with the fiduciary duties of the directors to do so.

    The government is perfectly at liberty to change the tax law to change this outcome but this hypothetical bank has done nothing wrong other than meet its lawful obligation in every sense of the word.

    A very famous Australian judge once said that the payment of tax is a legal matter and that while many may wish to turn it into a moral issue for political purposes ultimately it is the Law as enacted by Parliament and nothing else which determines how much tax a man should pay (I am paraphrasing of course)

  8. I dream of one day living in a libertarian utopia where all forms of tax avoidance are seen as a social and moral good, to be encouraged and applauded by all quarters and tax evaders are rightly punished.

    Rather than this moral quagmire of tax avoidance, where ISAs are a good thing, but maximising your capital gains tax is dubious, and what ever uncertainties companies find and test through the courts they are castigated for.

  9. ‘ That’s why MacMillan could say, “The Labour Party is a moral crusade or it is nothing” ‘

    PST. Harold Wilson. Not Macmillan.

  10. In my libertarian utopia, the governement sends around a list of proposed expenditures and asks you to indicate which ones you wish to support and with how much. If enough people aren’t prepared to pay, nothing get’s done.

  11. Richie seems to have a tendency to conflate tax avoidance and tax evasion. Despite being someone totally unqualified in accountancy, it seems fairly clearcut to me:

    Tax avoidance: not paying unnecessary tax
    Tax evasion: not paying necessary tax

    The necessity or otherwise of the tax is defined solely by the law as laid down.

  12. I would have thought Greece stands as an awful warning for widespread tax dodging,though they
    have stated using a property tax that is very hard to dodge.Some prosperous suburbs of Athens were apparently existing without any form of income according to tax returns.
    Tax dodging generally results in people in paid employment paying for the shortfall from the self -employed and rich bastards who avail themselves of public services without contributing “a fair share”.
    Is it right that rich trash can buy inflated-value property in London safe in the knowledge that the Grand Coalition of Homeownerists (AKA the British One Party State) will do anything ,sack public employees,cut spending,to keep property price ,particularly house price ,inflation up to a level three or four times higher than general inflation?

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