The ever glorious Richard Murphy

No, really this is glorious.

So we\’ve a set of definitions, of tax evasion, tax avoidance, tax compliance and tax planning.

This is the ex cathedra pronouncement of what those words mean from Il Papa himself.

Fair enough, now let us take him absolutely at his word:

Tax planning

Tax planning is a part of tax compliant behaviour. It is not a part of tax avoidance. Tax law reflects the complexity of modern life and the multitude of choices and options available to all taxpayers when legitimately seeking to structure their affairs. This necessary offer of options within tax legislation creates the opportunity for choice on the part of the tax payer and means that determining the right amount of tax (but no more) that they seek to pay does necessarily requires the exercise of judgement on occasion.

So long as the exercise of that judgement seeks to ensure that the taxpayer makes choices that exercise options clearly allowed by law and that they do not exploit unintended loopholes created between laws then that process of a taxpayer choosing how to structure their affairs is the process of tax planning, which is a legitimate, proper and socially acceptable act.

As example, a taxpayer choosing to save in an ISA (Individual Savings Account) is exercising an option made available to them in law that is entirely tax compliant so long as all the published conditions for saving in that way are met. As a consequence no one can accuse a person using an ISA of tax avoidance. Those who say they are tax avoiding can safely be said to be wrong.

OK, now let us concentrate on the most important part.

People who use tax planning, who use options made available to them in law, as long as they meet all of the published conditions, are not tax avoiding. To accuse them of being so would be wrong.

Excellent. So, let us see if anyone has in fact accused anyone of using such legitimate allowances of using tax avoidance. Anyone? Bueller? Yes:

As a proportion this may be the highest gap of all. Much may be due to legitimate tax
planning, but by no means all is. Some, undoubtedly, is due to tax avoidance.
When this sum is added to the £12.9 billion of tax loss already calculated for individuals
it suggests that the total UK tax gap due to tax avoidance can be estimated at £24.7
billion, and rising.

And isn\’t that just precious. Richard Murphy\’s estimation of tax avoidance falls foul of Richard Murphy\’s own definition of tax avoidance.

Yes, I have left this comment there:

Fascinating stuff:

\”As example, a taxpayer choosing to save in an ISA (Individual Savings Account) is exercising an option made available to them in law that is entirely tax compliant so long as all the published conditions for saving in that way are met. As a consequence no one can accuse a person using an ISA of tax avoidance. Those who say they are tax avoiding can safely be said to be wrong. \”

OK. But who was it who did conflate the two?

\”As a proportion this may be the highest gap of all. Much may be due to legitimate tax
planning, but by no means all is. Some, undoubtedly, is due to tax avoidance.
When this sum is added to the £12.9 billion of tax loss already calculated for individuals
it suggests that the total UK tax gap due to tax avoidance can be estimated at £24.7
billion, and rising.\”

Who is it who has defined tax planning as being not tax avoidance but then includes tax planning in his estimation of tax avoidance?

No, I don\’t expect it to be published nor do I expect a coherent reponse.

4 thoughts on “The ever glorious Richard Murphy”

  1. “If you do things of which I approve, I won’t call you a criminal. If you do things of which I do not approve I will epend my dying breath to accuse you of being a criminal and worse.”

    All I can say is: “Thank God we have the rule of law rather than the rule of Richie.”.

  2. The man is a total moron, an embarrassment. No-one in the accountancy or wealth management industry has any respect for him. Unfortunately, he still has the ear of some parts of the policymaker world, which makes him dangerous.

  3. Tim,
    Wrt “and that they do not exploit unintended loopholes created between laws”

    a) Only a mind reader can tell the difference between intended and unintended loopholes

    b) There is an old Jewish saying “The god that made the law also made the loopholes”

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