The Glory of the Murph

murphglory

Fascinating from the Murphmonster this morning.

Just eyeballing this the number of extant companies has roughly doubled over 12 or so years. The number not declaring taxable income has around and about doubled over those same 12 years. The number declaring taxable income has just around doubled over 12 years.

OK, so, proportions stay around the same.

I have to be candid: I don’t believe that. I think there are many more trading than say so. I think it’s utterly implausible that this is not the case.

Quite: that the proportion of companies not declaring taxable income stays static is proof perfect that there’s massive tax dodging going on.

Nothing like having proof of a contention, is there?

23 comments on “The Glory of the Murph

  1. Income.

    Profit.

    Gross trading profit.

    Taxable profit.

    These are all very different things. Which he choses to ignore. In favour of his own a-legal term (as far as companies are concerned) of “taxable income”.

    Even a well run business can declare very little profit – either because they are investing in stuff immediately allowable against tax, or that they are paying their workers more.

  2. I may be missing something but should the Number of Companies = Those declaring taxable income + those not declaring taxable income?

    It doesn’t look like it to me from around 2006 to 20010/11.

    It could be my eyes or monitor I suppose?

  3. Oh, and in the comments:

    my estimate leaves over 1.5 million dormant companies

    I just find it vey (sic) hard to believe we need 2 million of them

    Duh. That’s the whole point of dormant companies. They aren’t, at the moment, needed. But they might be – or they might be too much work to wind up. Or they may be extinct but the paperwork hasn’t been filed.

  4. Thanks, SE now I understand he didn’t include dormant companies. He should have shown those for completeness.

  5. “I believe…” and “we need…” – classic phrases of a megalomaniac fascist and typical lefty.

  6. Hmmm he is getting an eye for trolls. He rumbled “Graeme Woodlouse” and “Wim Torstall” fairly quickly, and I don’t imagine “Manx Intelligence – wet ops division” will escape his trained eye either.

  7. “Manx Intelligence – wet ops division” is still up – he is probably on the phone to Special Branch as I type this.

  8. Excel is one of the most dangerous pieces of software in the world. Bung a few numbers in without any real thought, out pops a graph and all sorts of spurious conclusions are drawn.

    With specific reference to Ritchie, he churns these out so quickly that he can’t possibly give them any real thought. A few weeks ago he had denounced some published data within about an hour of it coming out, again based on a quick excel chart.

  9. To be candid, he needs a huge slap. Look at the classic Murphy syllogism: a) X b) I cannot believe* X is necessary c) therefore X is bad.

    * i.e. do not know why or am incapable of imagining that

  10. I don’t think I understand his graph. He’s talking about “dormant” companies, and companies not declaring taxable *income*, but surely corporation tax is only due on *profit*, and the HMRC tables are counting the number of companies making a *profit*?

    And while it might be surprising if 2/3rds of companies are not trading (no income), it’s not at all surprising that 2/3rds might not be making a profit. That is to say, they’re trading but making a loss.

    Surely not even Murphy could be confusing profits with income?!! What have I misunderstood?

  11. Taxable income is a legal term. If the profits of a company derive from taxable income, then the profits are taxable.

    Of course, there are plenty of companies which are trading but don’t have taxable income. An example would be a members’ owned golf club. Since such mutual trading cannot give rise to taxable income, the profits or losses are not taxable.

    So to say that the number of companies not declaring taxable income are defrauding HMRC is simplistic.

    As for suggesting that companies are listed as dormant, but are in fact trading, that’s the sort of thing for which HMRC have a special cell in the Scrubs.

  12. Should have looked at the chart more closely and read the above comments.

    How you plot taxable income on a graph entitled corporation tax liabilites is beyond me. Does he mean taxable profits?

    Is he aware that quite a few companies make losses?

    Silly me to apply law and logic to a Dick assertion.

  13. There are now a very large number of charities that are registered companies. This started in 2008 at which point the number of companies not declaring taxable profits increased because charities are not liable for tax (except when they have a trading subsidiary).
    There are over a million charities: I don’t know how many have registered as companies but it is clearly a substantial number.

  14. He’s run this argument before and it remains preposterous.

    He believes that companies not filing with HMRC is practically proof of tax evasion.

    That someone who is looking to evade tax would go to the bother of registering a company at Companies House with its filing requirements (dormant companies still have to file dormant accounts and an annual return) is clearly absurd. These days a new company is automatically notified to HMRC who then send out for info on the company. Hardly what a tax evader wants. I pointed out that you would also need to register directors and shareholders, again drawing attention to yourself and Murphy mumbled about nominees. But if this tax evasion is going on on the scale Murphy implies you’d need tens of thousands of nominees and/or nominees would have thousands of Companies House entries. Either way HMRC would spot this.

    No, it’s just more scare crap from Murphy which his idiot followers will lap up because they are clearly too thick to think for themselves. Tax evaders either want to stay under the radar completely or operate behind a legitimate front. Neither scenario requires a dormant company at Companies House.

    He creates imaginary phantoms to build up this picture of “everyone being at it”. His campaign more and more resembles McCarthy in 1950s America. “tax evaders are under the bed”

    Of course he hasn’t a single shred of evidence to back up what he is saying. Not one. He’s talking utter bollocks.

  15. On that million gap.

    a – Are Companies LImited by Guarantee in this list? How many are there? Impossible to check because Murphaloon’s link is to his own dropbox, him being an Internet expert et al.
    b – How many companies relate to maintenance/freehold of leasehold properties?
    c – There’s also now a tendency for a new company to be created for every sustainable drainage system, since Councils have got into the habit of demanding 25 years’ worth of maintentance money up front.

  16. As I recall companies not only have to make a profit in a year they also need to not have any previous losses offsetting the profit to be classed as having taxable income.
    A few years expansion, a bad trading year or two in the past few (it happens) and so on?

  17. I’d guess the increases in dormant companies probably has more to do with more people spending time floating in and out of “self employed” subcontracting, than tax evasion. My dad (well paid software engineer) currently has a dormant company – it comes out of the box every couple of years when he’s working as a contractor, goes back in the box for a couple of years when he’s working as an employee… I suspect that’s the case with a lot of other dormant companies…

  18. The following companies all seem to have had a period of over a year (several years in some cases) when they were incorporated but did not have any income.

    All but one had a period of over a year for which accounts have not yet been filed with Companies House.

    I wonder if anyone can guess the connection between them?

    Copivotal LLP – last accounts submitted to 31st March 2005, not dissolved until 18th April 2006

    Finance for the Future LLP – appears to have had no income since 2012, but still listed as active.

    Fiscal Responsibility (a limited liability company but has claimed exemption from including “Ltd” in its name – not exactly full disclosure) – appears to have never had any income – formed 7th July 2010, dissolved 20th March 2012

    Fulcrum Publishing Ltd – appears to have had no income after 31st May 2009 – last accounts submitted to 31st May 2011 – not dissolved until 13th March 2012

    The Tax Gap Ltd – appears to have had no income since 2009 – last accounts submitted to 31st March 2011 – not dissolved until 3rd July 2012

    In addition there is Fair Tax Campaign (another limited company that does not disclose its limited liability status in its name) – incorporated 3rd June 2013, has not yet filed any returns or accounts (which aren’t due yet, but presumably shows up in Murphy’s spreadsheet as a company that has not filed a tax return)

  19. I suppose that to a man with a hammer, the problem must look something like this:

    – CT is levied on companies;
    – Losses are deductable from CT; and
    – a non-trading company pays no CT.

    Therefore:
    – the only reason for making a loss or not trading is to avoid CT.

  20. @Martin Davies

    “As I recall companies not only have to make a profit in a year they also need to not have any previous losses offsetting the profit to be classed as having taxable income.
    A few years expansion, a bad trading year or two in the past few (it happens) and so on?”

    You’re perhaps a new kid on the block. In Richard Murphy’s world, companies making losses amounts to tax evasion.

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