It’s not controversial in the slightest

The finding is controversial. The focus of tax justice campaigning has been on tax avoidance for a long time. It requires a change of mindset to think that tax evasion is the bigger issue.

I can think of someone, not a million miles from here, who has been saying that tax evasion, the actual grey economy, is far more of an issue than tax avoidance for some number of years now.

But then if Spudda’s just thought of it then it must be new, eh?

23 comments on “It’s not controversial in the slightest

  1. I think (among many issues) where you’d differ is in the solution – for you it means tax rates are too high – if they were lower fewer people would be tempted into this behaviour. For someone as evil as Murphy, committed to a base rate of 100% (i.e you are owned body and soul by the state from birth until death) then that’s the precise opposite of what should happen.

  2. He may not like the result – I’d bet a pound to a rupee that the absolute vast majority of tax evaders are in the lower echelons of society. The cash in hand tradesman, the retailer who underdeclares the cash going into the till, the householder who asks for a ‘discount for cash’. If you’re a millionaire why mess around with tuppenny happenny tax frauds of £50 and £100 here and there? Plus once you have companies and employees they aren’t going to want to aid and abet crimes.

    Walk into any council estate, pick on the first bloke you see, he will have, be the process of and will in the future evade tax.

  3. Of course tax avoidance is the bigger issue – it involves hundreds of £billions through ISAs, Gift Aid, VCTs, tax relief for pension contributions, EIS, funding Research and Development, film finance schemes ….
    However the difference between tax evasion and tax avoidance is still, to Murphy’s chagrin, the thickness of a prison wall. Murphy wants everyone – oops I mean *everyone else* – to pay the maximum amount of tax. For some reason the various elected governments of *our* country (not his, remember) have chosen to grant exemptions from tax for various behaviours that they have chosen to regard as desirable and Murphy wishes to force the government of *our* country to reverse all these grants of exemption. He has not been audible in his campaign, if any, to require his own country to charge tax on his worldwide income at 80c in the €.

  4. The focus of tax justice campaigning has been on tax avoidance for a long time. It requires a change of mindset to think that tax evasion is the bigger issue.

    So the bigger problem is individuals and businesses being allowed the freedom to legally minimize taxes due the state.

    Both Orwellian and Kafkaesque.

  5. The focus of tax justice campaigning has been on tax avoidance for a long time. It requires a change of mindset to think that tax evasion is the bigger issue.

    The first change needs to be Richard Murphy not using the terms avoidance and evasion interchangeably.

  6. So the bigger problem is individuals and businesses being allowed the freedom to legally minimize taxes due the state.

    Until yesterday, of course. Then it became evasion. But, in truth, it doesn’t matter which is the “bigger” problem…

    As Murphy notes in the comments:

    Pay her by bank transfer. Why use cash? Why not create an audit trail or you are implicit in the evasion?

    The totalitarian instinct remains whether it’s avoidance or evasion, because when all is said and done, Richard Murphy is a totalitarian.

  7. What would you call Ritchie’s antics with TRUK then? avoidance, evasion or hypocrisy?

    He set us as an LLP with his wife (who does nothing for TRUK) as a 1% partner, when he could easily have set up as a sole trader LLC. The only reason to set up the LLP is for the tax benefit of being able to pass tax-free charitable grants through the LLP to his income, where they would be taxable through an LLC.

    Of course, he is no longer with his wife and also seems to have forgotten to inform Companies House and HMRC of the fact. As the partnership is no longer a partnership it should revert to being a sole trader.

  8. Murphy is the Leona Mindy Roberts Helmsley of Ely.

    Only the little and the big people, in fact every people except Murphy, should pay taxes

  9. You evidently he doesn’t know the difference between the terms implicit and complicit.

    That’s our genius.

  10. You evidently he doesn’t know the difference between the terms implicit and complicit.

    And I don’t know how to proof-read.

  11. Dennis

    ‘So the bigger problem is individuals and businesses being allowed the freedom’

    With that excerpt you have his whole modus operandi. He does not like Freedom in the slightest. For him it means ‘loss of control’ – a truly dangerous individual fortunately stymied by being marginally less competent than a lobotomised pheasant but nevertheless inexplicably considered worthy of being quoted in the FT

  12. …but nevertheless inexplicably considered worthy of being quoted in the FT.

    One lobotomized pheasant showing another a degree of professional courtesy.

    Young men and women don’t go into journalism because the thought of a career in nuclear medicine or particle physics bores them.

    Once you realize 99% of “professional” journalists are dumber than a ball peen hammer, it all makes sense.

  13. So the bigger problem is individuals and businesses being allowed the freedom to legally minimize taxes due the state.

    Not simply legally allowed to, but actively encouraged to do so in many cases. Governments created ISAs and the like for a reason.

  14. “…but nevertheless inexplicably considered worthy of being quoted in the FT.”

    I consider it my civic duty to join in any forum where spud appears but can’t control.

  15. @Tyler

    There is no tax benefit from the use of the LLP – it is a look through and the tax treatment of income is the same as if Ritchie had received it directly.

    The LLP enables him to get grants from charitable trusts which are not available to sole traders. It also limits his liability if he is sued to the LLP assets as opposed to his own assets.

    I agree that his wife’s interest in the LLP is a sham, and if they are separated/divorced he should have informed Companies House and bought her out/closed down the LLP.

  16. @ Sam Jones

    As I understand it, and please correct me if I am wrong:

    Some charitable grants are not taxable (AFAIK as long as the Grant is not results based and not for profit). Through the LLP he gets the tax look through and therefore treats that grant as non-taxable in his own personal income.

    Were he using a sole trader/LLC structure, the income would come into the LLC, then he would pay that money out as salary or dividends, which would be taxed normally.

    So as I see it he is likely using this arrangement to avoid tax (as well as get grants not available to sole traders as you rightly say). My suspicions have been aroused by a co-conspirator, who has asked Murphy directly on several occasions. When he does manage to slip a post through (Murphy deletes most referring to his own tax arrangements) he becomes extremely defensive and makes the claim “he pays all the tax legally due”. Which is a non-answer really, if you are legally but rather hypocritically avoiding tax. Specifically he NEVER makes any denial of this tax avoidance strategy.

    Everyone can see how much TRUK is turning over from it’s companies house statements. To my mind the only reason you wouldn’t publish your personal tax statements – when someone is directly accusing of tax avoidance – is if you were earning significant other income, or by publishing you would expose yourself to huge ridicule – because the amount earned from TRUK and the tax paid shows rather sizeable avoidance.

    Which of course becomes evasion if you have been lying to companies house.

  17. @Tyler

    Indeed some grants can be non-taxable. It’s a grey area. One quirk is that if someone in Murphy’s position were to be paid for services to a grant foundation, the services would be VATable. If a grant foundation pays over money for ‘no particular services’ it is not VATable. I’m not sure if TRUK is VAT registered.

    As Sam Jones points out, an LLP simply doesn’t exist for tax purposes. For tax purposes, an LLP is just a collection of sole-traders.

    A sole-trader does not pay tax on a ‘salary’, he/she pays tax on the profits they make.

    Murphy needed a structure with Limited Liability in order to receive grants. The pompous twat bangs on about his ‘openness’ and cites that he publishes full accounts at Companies House (i.e. including a P&L). A company would have forced him to show in his P&L if he was paying himself a salary or dividends. Salary would have cost him more as employers’ NIC would be in play. Dividends would show that he was avoiding employers’ NIC.

    By choosing an LLP he keeps things opaque. In fact his LLP accounts are more opaque than (say) PwC and KPMG as their LLP accounts disclose tax provisions for partners and his do not (Spud flapped around when I challenged him on this a few years back and tried to pretend the KPMG/PwC provision related to LLP employees – which it did not – then, as usual, follow up queries were deleted.).

    I agree that his stance stinks. he won’t publish his tax return claiming that he hasn’t asked anyone else to disclose theirs. He never answers the question ‘why not?’. Why wouldn’t a campaigner for tax transparency disclose his OWN tax affairs, even if he didn’t ask anyone else to. Or as a challenge to others.

    As you say, his failure to publish his own tax returns points to something he wants kept hidden. Why he’s never challenged about that more openly in the media is a puzzle.

  18. @Tyler

    You are correct that there would be an advantage in receiving tax free income via a LLP as opposed to company where the payment of salary/dividends would trigger a tax charge. But voluntary receipts are only tax free if unconnected to a business. Ritchie’s LLP is clearly carrying on a business (of selling tax research) so I think the grants are taxable even if not linked to a specific piece of research

    He said in the comments here he pays tax on the grants
    https://www.t*xresearch.org.uk/Blog/2015/07/24/new-sources-of-funding-for-tax-research-uk/

  19. @Andrew C

    An excellent summary – thank you

    I’d love to see Ritchie’s tax return. I suspect there is something there he doesn’t want us to know about.

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