But this isn\’t tax avoidance Richard

Well of course I agree. But he either has no clue what he’s talking about or he’s ignoring the fact that his government is one of the biggest supporters of large corporate tax avoidance there’s ever been. As I explained in a report I wrote for the TUC last May, In December 2010 George Osborne announced the biggest tax loophole ever deliberately introduced for large companies by a UK government when he announced that any UK company moving its treasury function out of the UK to a tax haven would have its tax bill on that treasury operation cut to 5.75%.

The distinction that R. Murphy makes between tax planning (entirely legitimate, morally and legally) and tax avoidance (morally illegitimate and yet still legal) is that tax planning means using the allowances, deductions and reliefs allowed in law as Parliament meant them to be used.

Tax avoidance is using them in ways other than Parliament meant them to be used.

That is Ritchie\’s argument, I\’ve not misrepresented him.

George Osborne announced the biggest tax loophole ever deliberately introduced

So it\’s not tax avoidance. It has been deliberately introduced by Parliament to be used in that manner.

It is, in fact, tax planning and tax compliance to use the allowance exactly as Parliament intended.


11 thoughts on “But this isn\’t tax avoidance Richard”

  1. I hope that the TUC was happy with the report they received. Much of it is the Murph-meister complaining that corporate tax rates in the UK are too low and have been declining over time. Then there is a very brief discussion of the tax take and he shows a graph that shows the small amount raised by corporation tax rising over time…but he does not draw the obvious conclusion. The rest of the report is the usual Murph-wibble. Does anyone have any figures for the numbers of groups that have moved their treasury operations to a “tax haven”? It is not a trivial thing to do. And Osborne has ensured the UK still reatins some tax take, which would otherwise have been lost. But, for the Murph-meister, it is evil to have finanial assets not in the coffers of the UK Treasury

  2. Dennis the Peasant

    On a purely professional level, Murphy’s “grasp” of the concepts (and distinctions between) tax avoidance and tax evasion are beneath contempt. The man is not only a fool, but an incompetent in matters of his chosen profession.

  3. The man is a dangerous lunatic. There’s nothing more that can be said. The attitude he takes is positive proof that he really does believe that all income is the property of the State, and any tax law (however intentionally introduced) that allows people to retain more of their income than was otherwise the case is a tax ‘loophole’. He really does believe that the ‘right’ state of affairs is that you work and get to keep none of your income as of right. The State then lets you have a bit of the income back, entirely as a magnanimous gesture, the amount to be decided by people like RM, with no appeal.

    I repeat, the man is a dangerous fascistic lunatic. To him we are nothing more than slaves, good for nothing but working and taxing, all for the ‘greater good’.

    In the last century we have fought one world war of the shooting kind, and one of the ideological kind, at vast expense in men, material and wealth, in order to prevent such ideas being implemented here.

    I despair.

  4. Jim..

    Indeed.. he thinks that the state should have all the money, yet at the same time he seems to entirely disapprove of everything that the state does with it.

    So his nirvana is, essentially, that we give all the money and all the power to people who he has absolutely zero regard for.

    It’s one thing to believe that the government should have the money because the government knows best.. but quite another to think that the government should have all the money despite the fact that it patently doesn’t.

  5. Then let us remember how Margaret Thatcher’s political guru Keith Joseph characterised this exact issue

    “Keith Joseph had a hatred of what he called the “pocket money society”, in which all essential expenditures such as housing, health and education were increasingly paid for by the state.

    He believed that this infantilised the public, leaving them little to decide that was important; instead they would think only about what toys to buy for their pleasure, like children without responsibilities.

    I have walked along way since my days in the nursery on nannies knee. I’m fucked if I’m going to go back to such a situation as an adult without the aid of Dr. Alzheimer’s famous disease.

    It doesn’t matter if the hands of the purse are tory / coalition / liberal or labour. I will not submit to my own enslavement.

    I would rather see the HoC burn in flames first.

  6. @The Thought Gang:

    I think his nirvana is that all the money and power is given to him and his ilk, so they can control everyone and everything in precisely the way they want, which of course will be 100% morally and ethically correct, because they are ubermenschen.

    How could anyone possibly be opposed to such obvious truth?

  7. Jim (#7), yes, as his ultimate goal that makes some sense. It’s totalitarian and evil, but it makes sense.

    But since he hasn’t achieved that nirvana, which does he work for first?

    One could either work for the State to spend the money that it does have in a ‘proper’ (for him) way.

    Or one could help the (faulty) State grab even more money to spend on the wrong things.

    It is very interesting, and somewhat puzzling, that he mainly goes for the second, that he wants to increase the State’s money BEFORE he sorts out what the State is doing with that money.

  8. I think that it’s tax avoidance because it is not paying the amount of tax that Murphy thinks they should pay.
    After all, he alone knows the will of parliament and George Osborne getting a lot of MPs to vote in favour doesn’t balance Murphy’s over-riding veto.

  9. The idea that parliament has any intentions about the use of allowances and so forth, is a strange fiction. Finance Bills are passed unamended and, except for a few headline points, almost unexamined and undiscussed by MPs. It takes a lot of work for the real experts (not MPs, not you and me, not Murphy) to figure out what they mean. Nobody else knows at the point they become law. Ministers are probably nearly as much in the dark as backbenchers.

    I’m sure the Treasury sometimes has intentions when it creates tax-breaks on purpose. I’m sure HMRC is almost on the same side as Murphy, in that it seeks the maximum cost-effective collection (rather than the maximum regardless of cost). But of one thing we can be certain: if tax-lovers say they magically discern how parliament intended the law to work, they are lying.

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