Suppose so really

Corporations, from large to small, and right across the globe fail to tell us what they are doing and yet expect to enjoy the extraordinary privilege of limited liability, which is (and was proven to be in 2008) a massive risk for all of us. The least they can do is tell us what they’re doing in terms we can all understand. And since we do not know which ones are really creating the risk, I do mean all, without exception need to be reporting in full, and on public record.

I do mean that I want their accounts to be comprehensible. It is absurd that much corporate reporting is now no better than gobbledygook to most users, and that is especially true of the directors and owners of smaller companies who have absurd standards imposed upon them, and are expected to sign accounts that they have little way of knowing are right.

It is true that accounts are difficult to read. Ritchie certainly has problems at times….

29 comments on “Suppose so really

  1. Companies don’t have limited liability.

    Managers don’t have limited liability.

    Investors have limited liability. Their liability is limited to the face value of the shares they hold. Do we think it’s in the public interest that pension funds, insurance companies and ordinary members of the public should be hounded to make good the losses of, say, Carillion?

    If he can’t even start in the right place, what hope is there that he’ll produce anything of any value?

  2. It is absurd that much corporate reporting is now no better than gobbledygook to most users, and that is especially true of the directors and owners of smaller companies who have absurd standards imposed upon them, and are expected to sign accounts that they have little way of knowing are right.

    Meanwhile, he wants MOAR GOVERNMENT!

    Surely he cannot, cannot be this thick?

  3. Said the man benefiting from limited liability via a LLP, or at least was.

    Could Noel Scoper confirm whether Ritchie is still using the LLP that consisted of 99% him and 1% his (now ex or estranged) wife?

  4. Rob said:
    “Meanwhile, he wants MOAR GOVERNMENT! Surely he cannot, cannot be this thick?”

    This is what amazes me about Murphy, and the Left in general.

    He’s loathed every government for the last forty years – over half a lifetime – with the possibly exception of the two-and-a-bit years of Gordon Brown. Yet despite that he still wants government to have more power.

    At what point should reality kick in, and the Left should start thinking “I don’t like any of the governments we’ve had, I don’t trust them, I loathe the people running them – wouldn’t it be a good idea to give them less power rather than more?”

    It’s like the people who get married three or four times – at some point you have to be realistic and accept that next time probably isn’t going to be any better than all the previous ones.

  5. Rob

    ‘Surely he cannot, cannot be this thick?’

    As a forerunner of Murphy (at least in his own eyes), Albert Einstein once said:

    ‘Only two things are infinite, the universe and human stupidity, and I’m not sure about the former.’

  6. aaa

    ‘If he can’t even start in the right place, what hope is there that he’ll produce anything of any value?’

    Maybe it’s on the ‘100 monkeys on 100 typewriters typing for a 100 years will produce a Shakespearian sonnet’ principle but I have to confess I have not seen anything other than utter nonsense and cringeworthy overestimation of his own capacity in 8 years of reading the man..

  7. Jim

    Yes Tax Research LLP still exists. Still 99% Spud.

    The accounts show that in 2017 Friends Provident paid the LLP £28,038. The description of this is illuminating. It was a grant

    “for which no services were supplied”

    What this means is that it isn’t taxable income.

    Spud troughed £28k and paid no tax on it.

  8. All corporations need to report in full? To whom? To people who have a financial interest (they already do that) or to Murphy – or to someone who can comprehend modern accounting standards?

  9. To GAAP or not to GAAP?

    ‘It is absurd that much corporate reporting is now no better than gobbledygook to most users’

    You need better USERS, dumbass.

  10. Spud troughed £28k and paid no tax on it.

    Presumably, members’ shares (99% Spud, 1% ex Mrs Spud) are taxable as their income. By putting it through LLP, he is effectively making non-taxable income taxable?

  11. It is absurd that much corporate reporting is now no better than gobbledygook to most users

    This from the guy who wants Google, Apple and Starbucks to present separate income statements for each of the 150+ countries they do business in.

  12. The accounts show that in 2017 Friends Provident paid the LLP £28,038. The description of this is illuminating. It was a grant

    “for which no services were supplied”

    What this means is that it isn’t taxable income.

    I don’t know wog tax, but in the US of A grant for no services provided isn’t a grant. It’s a gift. If memory services, Ritchie’s LLP is a for-profit business entity. Can you really gift to a for-profit business entity in wogland? Seriously?

  13. aaa

    Doesn’t work like that.

    LLPs are tax transparent. They don’t exist as far as HMRC are concerned. An LLP with 2 members is just 2 self employed people as far as HMRC are concerned.

    So nothing gets ‘put through’ an LLP for tax purposes. It won’t/can’t change the nature of a transaction

  14. Spud always sets up his income sources as non-taxable. It’s in his DNA.

    We have to understand that his messages to the public are so essential that it would be immoral if the messenger had to pay the State for delivering them.

  15. Not everything someone receives is taxable, even if they receive it as a result of what they do.

    The death of one of our 1966 world cup winners reminds me that Bobby Moore received a £500 payment from the company that made Radox Bath Salts as their ‘Player of the Tournament’.

    HMIT tried to tax him on this but lost in the High Court. (the QC representing HMIT is on court record as accepting that the verdict “will really not cause and serious heartburn anywhere”).

    As an aside, the bonus from the Football Association for winning the world cup was £22,000. That was for the whole squad of 22 players.

    That £1,000 each is equivalent to about £18,500 today.

  16. There’s a Larsen cartoon that shows how dogs hear what their owners say. It goes “blah blah blah bone blah blah bone” and so on. From memory.

    Spud goes through life hearing “blah blah blah tax blah blah blah”

  17. Doesn’t work like that.

    LLPs are tax transparent. They don’t exist as far as HMRC are concerned. An LLP with 2 members is just 2 self employed people as far as HMRC are concerned.

    Let’s say it makes a profit of £100,000, of which £28,000 is this “tax-free, you don’t have to do anything money”.

    Spud would show £99,000 on his tax return, being his share of these profits (of which £27,720 relates to tax-free stuff), and HMRC would tax itt as income tax at his marginal rate.

    That’s what he has always claimed to have done, and that’s how I understood LLP tax to work… maybe I misunderstood what he was doing or how HMRC operates. Most likely both.

  18. aaa

    Why would spud show £99,000 on his tax return? His tax return is a return of taxable income.

    If he treats the grant as not taxable, he doesn’t report it.

    If you won £1,000 on a scratch card, you wouldn’t report it on your tax return because it’s not taxable.

    All Spud claims to have done is “always pay all the tax that is due on my income”.

  19. aaa

    “and that’s how I understood LLP tax to work”

    No such thing as LLP tax. LLPs don’t exist for tax as far as HMRC is concerned.

  20. Spud always sets up his income sources as non-taxable.

    Perhaps he is worried about the deflationary effect such tax would have on the economy?

  21. This is ludicrous! He wants absolutely everyone to abide by more disclosure, but then says “directors and owners of small companies have absurd standards imposed upon them”

    Does he not see the contradiction In this…?

  22. @Andrew C: I recall at the time the LLP became public knowledge, that certain commenters suggested it was a sham, because of the 1% vs 99% partnership, upon which RM declared that his (then) wife was intimately involved with the day to day partnership activities and provided input into the LLPs activities well in excess of her 1% share of profits.

    Were the (possibly ex) Mrs M to be no longer intimately involved with anything to do with Mr M’s activities, would that in some way invalidate the LLP? Would RM not longer be able to claim limited liability?

  23. Also forgetting the reason they have become so complex is that regulation has increased every time there’s a scandal/issue which isn’t always necessarily a bad thing
    The reality is that sometime you can’t reduce something complex down to simplistic terms without losing too much important information or context
    This is also why the written parts of company reports exist so that the company can make more general statements like ‘we had a good year’, but these have to be accompanied by the accounting reports and have to be in line with reality. For example you can say it’s a good year because everyone else in the sector lost 10% of business due to downturns but you only lost 5% to add context to the purely accounting reporting.

  24. “The least they can do is tell us what they’re doing in terms we can all understand.”

    They broadly already do – via SIC codes – if one wants to look.

  25. @aaa

    When AndrewC says the LLP doesn’t exist as far as HMRC is concerned, that is shorthand for:

    “Where a LLP carries on a trade, profession or other business with a view of profit:

    all the activities of the LLP are treated as being carried on in partnership by its members (and not by the LLP as such)
    anything done by, to or in relation to the LLP for the purposes of, or in connection with any of its activities is treated as done by, to or in relation to the members as partners and
    the property of the LLP is treated as held by the members of the LLP.”

    i.e., anything done or earned by the LLP is treated for tax purposes as being done or earned by it shareholders.

  26. Andrew C and Al are correct – the LLP is a flow through, it is irrelevant to whether the income is taxable.

    There is case law that says that gratuitous payments can be tax free but only if they are unconnected to a trade or business. Given Ritchie’s LLP is clearly carrying on a business, they are unlikely to apply. In other words the income from the charitable trusts will be taxable which is consistent with what Ritchie has said. However, there is no way of confirming this unless Ritchie publishes his tax return which he has consistently refused to do.

    I didn’t see any reference to Ritchie’s libel settlement with Lord Ashcroft in 2009 in the LLP accounts. This implies that he paid the damages/costs himself rather than through the LLP, which supports the view that the LLP is a sham.

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