Two completely unrelated points

The House of Commons Public Accounts Committee has been looking at the management of H M Revenue & Customs – and rightly so.

As they note, and Private Eye report, 22 companies in the UK are disputing tax of more than £250 million each – a total sum of £14.9 billion.

And you want to tel me that the tax gap is not as big as I estimate – at £12 billion a year in total for UK corporates?

Sorry, but all the evidence stacks in my direction.

Yes, you guessed who that is.

As Richard defines these things tax planning and tax compliance are just fine. They are people and companies doing exactly what Parliament has asked them to do, pay the correct amount of tax, in hte correct place, at the correct time, given the underlying economic substance of the transaction.

Tax avoidance is legal but immoral attempts to dodge this and tax evasion is the illegal dodging.

OK, so what relevance is there of this to the £14.9 billion figure?

None actually. For until HMRC and the companies have settled, or until the courts have ruled, we don\’t actually know whether that £14.9 billion is compliance, planning, avoidance or evasion. It\’s possible that all of it (and it is of course an amount from a number of years, not just one) will be ruled to be not payable.

In which case it\’s not part of the tax gap, is it?

2 thoughts on “Two completely unrelated points”

  1. The chip (boulder) on his shoulder leads to enormous confusion.

    I was recently embargoed by the tax authorities here. €32.000 from one account and another €15,000 from 3 other accounts.

    They claimed I had deducted investments in professional activity as expenses. I hadn’t. They were wrong and my tax advisor has got it all back (less 99,05 euros which we are still working on).

    According to the world’s best accountant. I must have been guilty.

    He has such a low opinion of others that he automatically assumes that all business people are guilty of everything.

    As I have pointed out before and I would expect him of all people to know: Tax is an incredibly complex question. Sometimes the rules don’t adequately cover a case. It leads to dispute and sometimes worse. But as in my case the tax people are frequently wrong or trying it on.

  2. Presumably the 14.9 billion would cover several years of disputed tax? Without knowing the disputed amount per year you can’t even make a reckless comparison, let alone an informed one.

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