Ritchie\’s accounts

Richard J Murphy\’s accounts have fallen into my hands. Or those of Tax Research LLP rather.

Here.Tax Research LLP

As far as I can see he\’s saying that he earns £55k a year or so for writing his blog.

Nice work if you can get it I suppose. Wouldn\’t we all like to be so funded?

20 comments on “Ritchie\’s accounts

  1. Why is his wife still getting 1%?

    Tim adds: That’s simple. Must have two people to have an LLP.

  2. If half of his turnover relates to overseas markets, why is he paying tax on those profits here and why isn’t he paying tax in those markets? Right place, etc.

  3. It’s all fraud – only intellectual fraud, of course, not the less important financial kind.

  4. Tim

    You need to do a little market analysis, choose a target client, grovel and do a considerable amount of brown-nosing. Then publish whatever they want.

    We can’t have you being less successful than Mr. Murphy now, can we?

  5. What do we know about TAX GAP LTD. ?

    I love this arm’s length stuff in two companies owned by one guy who doesn’t even live in Monaco.

  6. It doesn’t look like he paid himself a salary at market rate for his work – you know, when class 1 NI + employer NI are applicable . Partnership income are subjected to Class 4 NI (9%)+Class 2 fixed charge.

    and the “funded by Task Force for financial intergrity and Economic, ultimalted funded by SPANISH and nowegian government” bit ..heem..

  7. “Included in turnover is £20,417 paid by the Joseph Rowntree Charitable Trust to Richard Murpy in a personal capaicity but included in the income of the partnership for the sake of disclosure and to ensure that the income in question is brought within the scope of income tax which, HM Revenue & Customs have advised the Joseph Rowntree Charitable Trust, would not otherwise be due.”

    So is getting a grant from a charity is totally exempt from any tax? And has he paid more tax than a normal person would have by bringing in the personal grant into the partnership? Or is it just fudging.

  8. ‘Tim adds: That’s simple. Must have two people to have an LLP.’

    Hmmm.

    Candidly, does this 1% owned by his wife reflect the substance of the LLP, or is it some attempt to obtain the benefits accruing to a LLP without it actually being a LLP?

  9. SBML

    I’d assume that a charitable grant is given so that the recipient can do something to further the aims of the charity, and thus the grant would be spent on doing those things.. not pocketed by the recipient… so, ordinarily, there’d be no income/profit available to tax.

    I’d then assume that in this case the thing to be done is the thing Richie does.. which, ordinarily, he does at no cost to himself other than his time… so he’s got a grant that he doesn’t need.

    What he’s done is recognise the grant as income to his partnership.. or, in the alternative, he’s acted as if he took the grant given to him in a personal capacity was then used to pay for work done by the partnership.. thus it is recognised as profit in the partnership, and taxed accordingly.

    That would seem fair enough.. and his treatment reflects the substance of the transaction.

    Tim adds: Yeah….except the grant on the JRF books is valued at £35k……

  10. “Tim adds: That’s simple. Must have two people to have an LLP.”

    You mean, Ritchie is arranging his affairs to reduce his tax burden? Still? (he stopped doing the standard NI-avoidance a while back, and says he has repented).

    I would call this aggressive tax avoidance. Since his wife clearly has no real input into the company at all.

  11. @ bilbaoboy #6
    Tax Gap Ltd is no longer trading and Murphy plans to wind it up and distribute the surplus to the shareholders in the current year, thereby avoiding tax on the undistributed profits of £12,681 (since HMRC, as a concession, does not levy tax on distributions of shareholder surplus below [£25k or £75, I can’t remember]. Murphy has previously condemned such tax avoidance on the part of others, which latter is included in the “Tax Gap”.

  12. I can’t understand what effect showing the grant from JRF in the accounts has on his tax position.

    An LLP is treated transparently for tax purposes (i.e. as if he were running a sole trader business). Surely the grant is either taxable or it isn’t. I can’t believe it would make any difference whether the LLP received it or he did.

    But do note the way he states, ” HM Revenue & Customs have advised the Joseph Rowntree Charitable Trust”, i.e. he makes no comment as to whether that advice is correct.

  13. @CM, #3
    “If half of his turnover relates to overseas markets, why is he paying tax on those profits here and why isn’t he paying tax in those markets?”

    He is paying tax on those profits here because he is UK resident. We have no way of knowing that he isn’t paying tax in those overseas markets.

  14. What is the reason for being a LLP? It doesn’t appear to be tax, as there is only nominal income splitting going on, (and I believe Mrs M has significant income of her own anyway), so what advantage does being a LLP confer over being a sole trader in dubious left wing economic ideas?

    Is it a libel thing? Does publishing his Magnum Opera via a LLP mean if he inadvertently libels someone like Sir Philip Green, who sues him into the ground, his liability is limited to the money in the LLP?

  15. Well does that not break the Spirit of the Law in some way? Surely the LLP was created for groups of people who are in trade together, so they could limit their liability, such as solicitors, estate agents etc?

    His wife is in no way involved in his writing affairs, so why is she a partner in the LLP? Presumably because you can’t have a LLP without at least 2 people in it. So she is put in as a nominal partner so he can gain the benefits of limited liability for his outpourings.

    If anyone did such a thing (creating an artificial structure, with extra nominal owners) to gain a benefit in taxation matters, RM would be denouncing them from the rooftops as an immoral tax avoider.

    I guess self awareness is not RM’s forte.

  16. John77, if the Tax Gap Limited is liquidated the proceeds will be taxable as a capital gain. The first £10,600 is exempt, the balance is taxable at 18% for basic rate taxpayers, 28% for higher rate taxpayers. So Ritchie and his wife will pay virtually no tax on the £12,681 left in the company. If Ritchie took the cash out at a dividend, he would pay 20% tax (40% less credit for the 20% corporate tax paid on the company’s profits). If he took the cash out as salary/bonus he would pay 40% plus employees and employers national insurance, but would get a corporate tax deduction for the salary and employers national insurance.

    Converting income into capital is of course something Ritchie condems as tax avoidance – see his report for the TUC here http://www.taxresearch.org.uk/Blog/2012/03/08/the-tuc-and-the-50p-tax-rate/

    Except of course when he does it!

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