From the historical files on the Murphmeister

The Inland Revenue was abusing taxpayers\’ rights by refusing to issue self-assessment forms, a leading accountant has claimed.

Richard Murphy, senior partner with Murphy Deeks Nolan, said three of his clients, who have always completed returns in previous years, had been told by their local tax offices that they will not be issued with one for the coming tax year. \’The Revenue said that, on the basis of the taxpayer\’s details it had seen, it was not interested in sending out forms,\’ Murphy said.

\’This is an abuse of civil liberties. Even if someone has no tax liability, they still have the right to prove it,\’ he added.

One of his clients, an overseas resident, had losses on rental income he wanted to carry forward, Murphy said. \’He has a legal duty to declare this kind of income, but is being denied the opportunity to do so as a result of the Revenue\’s action.\’

 

Not being allowed to carry forward your losses is a breach of human rights.

 

So Starbucks, by not carrying forward losses, will be breaching human rights?

17 comments on “From the historical files on the Murphmeister

  1. Has anyone ever talked to Deeks and Nolan about Murphy? The higher his thick head gets above the parapet, the more likely people will start sniffing around.

  2. Here’s Sarah Deeks, for any journos reading this:

    I was a partner in Murphy Deeks Nolan Chartered Accountants in London for ten years. I subsequently worked as a sole practitioner. I started writing about tax and accountancy in 1988 and I am now a full-time tax writer principally working for LexisNexis and Bloomsbury Publishing. I am also the author of Teach Yourself Understanding Tax for Small Businesses published by Hodder Education.

  3. Pretty impressive back catalogue of Murphyania you have to hand Tim !

    When’s the (unauthorised) biography coming out ?

  4. What’s to stop Murphy’s clients from either downloading the forms and submitting them in paper form or submitting an online assessment? Lamentable lack of initiative.

  5. H – wasn’t possible – the Inland Revenue were stating that you did not need a Self Assessment therefore they would not process anything you submitted …

    But, anyway, no. Starbucks have chosen, under pressure admittedly but from the WGCE chorus not from HMRC, not to carry forward losses. HMRC would still let them. Therefore there is no breach of human rights.

  6. @SE: could the Starbucks decision lay themselves open to shareholder court action, on the basis that they are voluntarily giving away shareholders funds without authorisation by the shareholders? I assume Starbucks UK is a wholly owned subsidiary of Starbucks (USA)? US shareholders are notoriously litigious.

  7. Jim – the decision could be justified as an investment against future tax while at the same time be a PR spend to prevent the loss of a good chunk of UK business.

    When the cost of not spending it is higher than spending it, it can be a good decision. In this case it does seem to have backfired badly from the government, HMRC and public responses I’ve seen.

    I’ll still use them as long as I can get to a store. They do a lovely strawberries & cream frappachino (basically an ice milkshake) – never seen it available elsewhere.

  8. “the decision could be justified as an investment against future tax ”

    How so? One gathers that they plan to not claim certain allowances, thus boosting their taxable profits. If in a few more years time the business became even more profitable, surely they couldn’t then claim the allowances, years after the event? If they declare an artificially high £Xm profit in 2012/13 tax year and pay tax on it, that it surely, they won’t get any of that back?

  9. I find this story very hard to believe.

    My elderly mother was always assiduous in completing her tax returns, but as her financial situation is extremely simple – she gets a pension: tax is deducted at source – HMRC called her to say (exactly as they said to Mr Murphy’s clients) that on the basis of her situation as evidenced in previous years, they didn’t plan to send her any tax return forms in future.

    But they were equally clear that the reason for their call was to ask for her agreement to this arrangement, and that if she raised any objections they would of course continue to issue her with tax returns in the normal way.

    I just don’t believe that HMRC treats Mr Murphy’s clients any differently, and the idea that they would ever refuse to acknowledge anyone’s tax affairs is simply absurd.

  10. @Churm Rincewind: the article was from 1997, over 15 years ago. Maybe HMRC did have such a policy back then, self-assessment had only just been introduced in April 1996, so perhaps they were trying not to overload a new system by eliminating those they thought had no need of self assessment forms.

  11. Jim – payment on account would seem the simplest solution. Satisfies shareholders maybe, public doesn’t need to know its on account.

  12. @Martin Davies: well Starbucks are bigger fools than I think they are already if they think they can game this to their advantage by sort of advance paying some corporation tax now, with the plan of getting it back later. That would obviously get found out and the sh*t would really hit the fan then, if people thought they’d promised to pay all this extra tax, only to claw it back a few years later.

    AFAICS by not claiming allowances they artificially increase their taxes in any given year and pay extra tax as a result. If they then claim all the allowances in future years and end up in losses again, those losses can only be used against future profits, not past ones. So the extra tax paid is gone for good.

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