Gosh, this is interesting from Mr. MurphyDecember 20, 2010 Tim WorstallRagging on Ritchie10 CommentsThere are other flags. For example, artificial income shifting between family members. And turning income into capital gains. Using companies to avoid national insurance is also tax avoidance. So, does Richard Murphy now agree that Richard Murphy partook in tax avoidance? previousHSBC\’s tax dodgenextWhat a lovely way to put it 10 thoughts on “Gosh, this is interesting from Mr. Murphy” Howard Philpot December 20, 2010 at 3:41 pm I have just posted this to his website. It’ll be deleted of course. ” So would you say that if a husband and wife are joint shareholders of a company that publishes material, where the husband does most if not all of the writing and if the wife (who, say, is a full-time GP bringing up kids) more than likely does next to nothing for the company, then any dividends paid out are not reflecting the economic substance of the transaction? Is this tax avoidance?” Kay Tie December 20, 2010 at 4:47 pm Why are we surprised that he’s a hypocrite? This is precisely what socialists always become. Gary December 20, 2010 at 5:25 pm @Kay Tie I think its a little more subtle. He has at one point ‘fessed up to ‘coming to his senses’. Fair enough. We all grow up and change our minds. That doesn’t make him a hypocrite. The issue is this: having come to his senses on such matters, he should now realise how easy it is to stray from the straight and narrow, and how easy it is to become as confused as he once was. Instead we get the moral certainty and righteous anger of the reborn telling us that everyone who abuses knows *exactly* what they are doing. yet that very same certainty can be relaxed when applied to his own past. OK, OK I take it all back…it’s not more subtle at all…he’s a standard issue neo-authoritarian hypocrite. Adrian December 20, 2010 at 5:48 pm Gary, There is another hypocrisy. He wants us to believe his GP wife (also mother to young children) is actively involved in writing tax reports with Tax Research. My wife is a part time GP and a mother of small children, and would not remotely have enough time to keep up to date with tax issues, even if she were interested. So his story sounds implausible, but how do we check if he is telling the truth? We can only take his word on it. Fine. BUT He refuses to believe the possibility that Cristina Green has put similar input to her husband’s business. Has he asked them? Is there some reason she does not deserve the benefit of the doubt he reserves for his own situation. As I understand story, the Greens did not marry until later in life (she was 41 second marriage, he about 39, I think). She had her own active career in retail before marrying him, owning shops. Given the Green’s metoric rise (and the ‘skin’ she would have had in the game), I would find it hard to believe she DIDN’T have a very significant role in her husband’s business at the time. Much more plausible than believing a GP and mother getting involved in a tax business, don’t you think? Bilbao boy December 20, 2010 at 5:56 pm What Howard has pointed out (as did my fellow Bathonian, Tim) is, in Spain at least, tax evasion not avoidance. So I guess that our friend Richard could well be guilty as charged. One never knows but… I wouldn’t like to be categorical because unlike him I don’t know all the personal details. Augustine December 20, 2010 at 6:40 pm Hi, I read your comment and the comment of Howard Philpot and of course the response of Richard Murphy. Here are a few of my observations that might be of interest to you. It has long puzzled me that RM choose to incorporate an LLP as the vehicle through which to trade. I do not have sufficient interest to travel to Companies House in Cardiff to examine the documents of incorporation or the annual returns of his LLP but what would be of interest is to discover who the other member(s) of the LLP are. An LLP needs at least two members. I assume that one of the members is Richard. Is his wife the other member? Or has he incorporated an LLP using a limited company as a second member of which he is the shareholder. Or even, has he used two limited companies as members? Although using a limited company is legal, in another context Richard would say it is a way to get round the law or, alternatively, is not in accordance with the spirit of the law. If his wife is the second member and yet she is a GP and not a tax “expert”, as Richard claims to be, (I have my doubts as to how much tax he knows), then such an arrangement might also be considered by Richard in another context to be a way to get round the law or alterhatively not to be in accordance with the spirit of the law. This is because an LLP is intended to be used by more than one person engaging in some form of business together, hence the requirement for at least two members. A business that would otherwise be a partnership but under the LLP structure provides limited liability to the equivalent of partners. It was not intended to be used by what would otherwise be a sole practitioner or trader in order to obtain limited liability (again because of the requirement for at least two members). If the LLP legislation had had that purpose why require two members? Finally, a member of an LLP is usually not considered to be an employee for tax purposes, consider the members of Big 4 LLPs that are taxed as self employed partners not employees. If Richard is a member and taxed as if he were self employed then his NIC payments will be less than they would be if he were an employee of one of the limited companies he used to operate and the expenses which are tax deductible will be greater as a member of his LLP than if he were an employee. Neat tax planning that. Do you have any views on this “avoidance”/”planning” arrangement of Richard? Regards Augustine Gary December 20, 2010 at 7:32 pm Adrian, I have no reason to doubt that his wife has a role in the business. Richard says its true and its likely. What seems pretty unlikely though is the idea that her input, valuable as it surely is, would be much different from the input of an employee. Partners in life I’m sure, but partners in business – a GP advising on tax and economics? If I worked at HMRC I’d need a little more to go on than his word on that bit. Captain Fatty December 20, 2010 at 8:59 pm There may be no need to go to Cardiff. Go to http://www.companieshouse.gov.uk/ and let the interwebs take the strain. Cheers, Fatty Gutbucket December 21, 2010 at 10:10 am Most GPs can offer better founded tax and economics analyses than Richard Murphy BraveFart December 21, 2010 at 11:21 am Interesting that Murphy can claim that for one purpose (his businesses and therefore taxpaying structures) his wife is sufficiently expert in finance and tax that she has a valuable input to his publications and research to justify a substantial participation in it. For another purpose, he claims that GPs are totally incompetent in finance (and he has said that this view is based on his personal experience) – when it comes to being required to manage the budgets and finances of their own practices. My own view is that most GPs are probably likely rather to lack competence in finance, but in any case a particular GP cannot both be expert enough to provide valuable comment on articles and incompetent when it comes to a general awareness of bookkeeping. In my experience, the area in which the GPs I have in the past consulted (I don’t bother any more) have shown particularly incompetence is in the practice of medicine. And the area in which they have shown greatest competence is in extracting huge incomes (the highest in Europe) for sub-standard work. I think we should go back to using barbers, at barbers’ rates. Certainly my barber is about as likely to offer useful health advice as any of the useless GPs I have met. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.