Ritchie’s new report

As a result HMRC has willingly reduced its resources – and especially its staff numbers – in the face of demands for government cuts when the result has been a staggering loss of tax revenue that could itself have helped close the deficit and prevent the austerity programmes this country has suffered.

Amazing that someone often employed by PCS, the union for the lower level taxmen, would say such a thing, isn’t it?

And the funding of this report?

Grateful thanks are offered for financial assistance provided to Richard Murphy to assist production of this report by Oxfam GB and the Joseph Rowntree Charitable Trust.

Rowntree can do whatever they want with the income from their inheritance of course. But think of all those donating to Oxfam to save the starving African babbies. Who find their donations being used to argue for more PCS union members to be employed.

I wonder how much he did get paid for writing this?

31 comments on “Ritchie’s new report

  1. It cost UK taxpayers as well as he got Caroline Lucas to ask Parliamentary questions for it.

  2. I skimmed the executive summary he’s posted.

    I’d say “there are no words” but clearly that would be misplaced. There are many. Mainly bollocks ones. Can’t even consider where to begin deconstructing it.

  3. So a writer thanks the JRF for its financial assistance towards writing a report on tax evasion but insists, insists, that this assistance is not chargeable to tax.

    Richard, if you ever wondered why I and many others dislike you so much…

  4. Okay, the tax gap exists. But HMRC insist that much of it isn’t closeable – tax owed by bankrupts (companies and people) or isn’t economically collectable (small trader VAT evasion). The LHTD insists that the gap is much bigger (especially if you assume that tax law says what he insists it does, or should, say rather than what it actually says) and is all collectable.

    If any of his premises are incorrect, his solution is pointless (well, except to the PCS who get more members.)

  5. There can’t be many people left who believe that a donation to Oxfam will go to hungry people in the developing world, can there?

    By the way, I’ve been too ashamed to ask this question for a long time but I’ve invigorated myself with a strong cup of tea so here goes.

    What exactly does LHTD stand for? I get ‘Lesbian’ and ‘Transgendered’ but I’m flummoxed by the rest.

  6. You really think I would slander the differently-sexed / gendered endlessly splittist special snowflakes by comparing them to Ritchie, as opposed to comparing him to an insane comedy figure from operetta?

    BTW – I actually prefer the new version of the gender-soup abbreviation “QUILTBAG”. You can actually say it, for one thing.

  7. Goodness, there’s a lot going on in QUILTBAG. I’m all for markets, of course, but there is such a thing as too much choice.

    But I’m grateful for the introduction (one likes to keep up) and for the knowledge that LHTD is none other than our favourite fiscal Pooh-Bah.

  8. Sorry, I had Ritchie down as Ko-Ko.

    Paying your fair amount of tax and “as good as paying your fair amount of tax” are, in the WGCE’s mind, identical. And he is the sole judge both of fair and of “as good as”.

  9. SE

    Yes the tax gap exists. The related questions being i) how much is it, really? and ii) what do we want to do about it? The second question is important because, if we talking shadow economy, then we are talking cash economy, low turnover for the individual. How much pressure do we want to put on these people? How much resource would it take? is it an efficient or fair use of resource?

    He also chooses to miss (I say choose because I have challenged him and he just won’t engage on this) the connection between tax evasion in the shadow economy and benefit fraud. Anybody cheating on their tax is automatically fraudulently claiming a means-tested benefit. His figures indicate, really quite strongly, that the level of benefit fraud is higher than extant estimates. Certainly it is higher than he will admit. Curious that!

  10. Ironman said “Anybody cheating on their tax is automatically fraudulently claiming a means-tested benefit”

    Not “automatically”. I’d agree with “probably”.

    Benefits aren’t automatic and aren’t linked to the tax system (despite the name even ‘tax credits’ have to be claimed through a separate system), so it’s entirely possible to evade tax without claiming benefits on your false profits.

    I would guess there’s quite a lot of tax evasion but non-claiming of benefits amongst small traders, for example; claiming benefits would involve paperwork and risk drawing attention to yourself.

  11. Richard

    Probably – even very strong probability – is not automatically i agree.

    But means testing is linked to income, income (and gains) is what we declare to the taxman. So I would argue the link is implicit. and the paperwork involved in claiming benefits is simply not putting down your income. The tweo types of fraud are siblings.

  12. Means testing is indeed linked to income, but benefits have to be positively claimed and not everyone whose income (or declared income) is low enough to claim benefits actually does so.

    I agree that once people are claiming, under-declaring income for tax will pretty much automatically mean they are also under-declaring it for benefits (not the least to be consistent and so avoid suspicion).

    My point was that there can, and I think will, be people who are under-declaring income for tax but not claiming any means-tested benefits.

  13. ….and the co-publisher, Prem Sikka’s “ASSOCIATION FOR ACCOUNTANCY AND BUSINESS AFFAIRS” the one whose CV is this:

    http://visar.csustan.edu/aaba/PremsikkaCV.pdf

    whose “AABA” business filed turnover of £1600/year for the last 3 years (and only other UK directorship is TJN) and has a website on some free user pages at California State University, Stanislaus. Jeez, even my arse could become a Professor of Accounting based on that!

  14. The murphmonster has made an absolute howler, though he doesn’t realise it yet.

    What he’s done to get his initial 40bn number is take the tax gap %, then gross that up by VAT (so dividing by 20% then 53%). This gives him a percentage of total sales missed in comparison to VTTL.

    So far so good. Now the massive error. He suddenly calls those sales “income” and applies an average tax rate to it.

    Now, we all know that sales does not equal income in the real world. At best it could be considered the upper bound.

  15. Now, we all know that sales does not equal income in the real world. At best it could be considered the upper bound.

    It’s not such a howler if you batter your brain into thinking in Murphenomics terms. Because any and all permitted deductions that lower your taxable income from your gross nominal income are “unfair” and “avoidance”. Including bad debts.

    With the possible exception of staff salaries.

    But then he is barking. But, in this insanity, almost approaching internally consistent.

  16. He’s a little upset that people aren’t beating down his door to discuss it:

    “Not one call from the BBC”

    Poor little Richard, his friends aren’t returning his calls….

  17. Another wonderful effort from the Clown Prince of Tax Policy:

    They live in a solution free world

    I live in a solution focussed one

    If your solutions are either utter bollox or to a problem that doesn’t actually exist, focussing on them is not praiseworthy …

    Note for Meissen Bison – CPTP can also now be used.

  18. “More important is the suggestion that my work is seriously flawed. My response to that is that if it is then HMRC must be largely responsible because I have used their data, with the odd twist as noted here.”

    That’s brilliant. So he can take someone else’s data, abuse it, use it for purposes it wasn’t meant for and when the source complains then blame them: “it’s your data!”

    At least he’s giving a source for his data this time. I suppose his stock answer of “you can use Google yourself” wouldn’t go down well in the footnotes for such a serious, heavyweight, meticulously thought out report.

  19. Ironman

    Don’t worry – I’m sure he’ll take comfort in the support of his sockpuppets – both ‘Thereisanotherway’ and Ivan ‘I’m an intellectual’ Horrocks have chimed in. The former admiring Murphy’s ‘forebearance’ – really you could not script this if you were writing satire…..

  20. “Don’t worry – I’m sure he’ll take comfort in the support of his sockpuppets – both ‘Thereisanotherway’ and Ivan ‘I’m an intellectual’ Horrocks have chimed in. The former admiring Murphy’s ‘forebearance’ – really you could not script this if you were writing satire…..”

    I have an unpleasant vision of some of these sockpuppets joined with Murphy in a pantomime horse pose – buried deep in the other’s rear end – they really are that indistinguishable as individuals.

  21. Bravefart

    Lacking your commendable steadfastness on not commenting on the site, occasionally one feels compelled to write. It really is a waste of time. The exchange between the stellar Ironman and Murphy this morning where he evinced ‘complete faith in the moderator'(I.e faith in himself) on Tax Research UK really couldn’t be parodied.

    As Several of the ‘bloke’ commentators on here point out – he is like a 15 year old. This week it’s this ‘In the Shade’ – Mercifully it seems the ‘Fair Tax’ Mark has been out into the long grass, but as the great Noel Scoper got out of him, apparently the New work ‘The Joy of Tax’ is ‘under discussion with a ‘Number of publishers’ – God help us.

  22. Van Patten

    I guess Ritchie is a scholar of the logic of Mrs Slocombe in Are You Being Served.

    “I am unanimous in this”

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