Ritchie’s Evidence

Two things stand out from his evidence to Parliament:

Work on this submission has been supported by funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 727145.

Yup, he’s taking money from foreigners to influence our law. Nice, eh?

Explanatory note re terms used in this submission

In this report tax evasion is defined as an act involving dishonesty that results in less tax being paid than was legally due. As example, income, gains or transactions are not declared as required by law or they are deliberately incorrectly declared so that less tax appears to be due than is actually the case.

In contrast, tax avoidance is considered to be an action believed by the taxpayer (or their accountant or lawyer) to be within the scope of tax law but which uses loopholes, allowances and reliefs in ways that the law never intended. This abuse can be within a country. So, for example, it remains unclear whether it not the habit of many contractors within the UK of forming limited companies and paying themselves by way of dividends and not salary to avoid national insurance charges that would otherwise be due on their income is exploitation of a loophole or a scheme of which the government tacitly approves although a steady range of measures to attack it from the government in recent years suggests the latter. Sometimes tax avoidance exploits differences between types of law e.g. exploiting company law to incorporate to reduce or defer a tax bill. And some is exploitation of the differences between different countries legal systems that rarely interact with each other neatly, meaning that myriad opportunities for not paying tax are available. It is these international loopholes that tech companies, for example, have exploited to reduce their effective tax rates to next to nothing whilst still adamantly claiming that they pay all the taxes that are due by them in each country in which they are operating. Technically that is true, but it is also disingenuous because they all know that the structures that they have put in place are intended to reduce those liabilities.

Precisely because the boundaries between tax evasion and tax avoidance are often hard to identify tax justice campaigners now choose to ignore the distinction between the two, suggesting it is not useful. They instead suggest that both should be called tax abuse because the motivation is similar in that both invariably ensures that tax is not paid at the right rate, by the right person, in the right place and at the right time.

I entirely ignore the legality of anything because the law doesn’t say what I think it should.

Pretty good when talking to the people who make the law, eh?

No doubt there’s more there to be found but I’m afraid I have something important to go and do. Arses don’t wipe themselves you know.

13 comments on “Ritchie’s Evidence

  1. Compare and contrast

    Firstly

    Murphy when he is pomtificating (see below) to parliament;

    “Sometimes tax avoidance exploits differences between types of law e.g. exploiting company law to incorporate to reduce or defer a tax bill”

    So exploiting differences between tax law is tax abuse.

    And secondly;

    Murphy when fist-typing against a suggestion that John Timpson has avoided a BIK charge by putting what is clearly a personal donation to his son through Timpsons;

    “Was it legal? Unambiguously so

    If there was a BIK issue would we ever know? No: that’s not in the public domain and not a CT issue”

    Ah, I see, once a company has paid for a FTM we can ignore exploiting differences between types of law. It’s not tax abuse at all.

    (pomtificating is the act of pompously pontificating – I just made it up)

  2. “Work on this submission has been supported by funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 727145”

    I wonder, was that grant given for the specific purpose of enabling Spud to write this submission?

    Or should it read – “because I trough away at the EUs money, I don’t actually have to earn a living and so have time to write this shyte”

  3. Shyte, shyte and more shyte.

    Like you Tim, it would hurt my sense too much to read it all but a skim read shows that an awful lot of it is just regurgitated stuff he’s written earlier or just cut and pasted from other sources.

  4. The law doesn’t specifically state the route he drives to Sainsbury’s, so is it abuse when he drives a route the law never intended?

    If a law does not proscribe something, it is legal. It is irrelevant what people like Murphy or anyone else thinks about the ‘intent’ of the Law (and Murphy’s ‘interpretations’ are not exactly known for their balance and objectivity).

  5. Pingback: Pomtificating – now officially adopted into our vocabulary | Tim Worstall

  6. The boundary between avoidance and evasion is not difficult to identify at all. The boundary between tax planning and avidamce might be; not between avoidance and evasion though.

    Murphy doesn’t realise this because he-s an unqualified cock making it all up.

  7. Tim this criticism of the Fair Tax Mark is unreasonable. As a good free marketeer you should encourage people to compete with him. Offer to sell “Even Fairer Tax Marks” for 20% less than he charges. If people want to buy fake accreditation then why shouldn’t they be free to do so?

  8. @ Ironman
    I think that a former minister defined the boundary between tax evasion and tax avoidance as “the thickness of a prison wall”.
    Murphy is *not* an unqualified cock making it all up – that might, ast a pinch, be forgiveable – he is a qualified cock making it all up when he knows that the worst tax avoidance routes were made up by his favourite Chancellor of the Exchequer to benefit his lefty media pals.

  9. So it is the spirit and not the letter of the law that matters.

    Say I have a referendum which was not legally binding, but the spirit (e.g. PM speeches that it is your choice and will be followed) was clear that the vote should be binding.

    What should happen in that situation?

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