First, because HMRC choose to ignore it none of the tax avoidance by Google, Amazon, Apples, Starbucks, Facebook and others is in here: that’s done with official sanction so it’s not going to be counted even though the world at large can see what’s happening. If you want the clearest example of why the numbers are wrong, this is it.
But none of those things are tax evasion or tax avoidance. They\’re the way that EU corporate taxation is meant to work. One base to sell to all from. Thus our answer: they\’re not in estimates of tax avoidance or tax evasion because they\’re not tax avoidance or tax evasion.
They are, quite simply, by Richard J Murphy\’s own definition, tax compliance.
Third, let’s consider the likelihood that tax avoidance by people on PAYE costs just £400 million a year. You mean all those bankers on all that pay only avoid £400 million? Oh please, pull the other one.
I would doubt very much that there\’s any bankers at all avoiding PAYE. It\’s an extraordinarily difficult tax to avoid: especially since all the NI dodges were closed down.
Fourth, let’s note that this tax gap loses records nothing at all resulting from the maybe 1 million or more personal service companies in use in the UK at the moment, even though they have been subject to much scandal of late. HMRC does not recognise this as tax avoidance so the several billion lost due to avoided employer and employee NIC and tax lost due to income shifting to partners and spouses all misses this estimate. Amazingly, despite the political scandal attached.
Well quite. Because it\’s not tax avoidance. If you are running a company (and thus no protection against being fired, as you would as an employee, and no unemployment pay etc) then you are taking the economic penalties of the structure you\’re using to do business. Thus it just ain\’t evasion.
And let us not forget that the man who doth protest has a) run his own affairs in this fashion and b) promoted the idea in The Observer. Forked tongued toad.
Oh, and I\’ve only just noticed the error in this one:
And then I’ll ask do you think this has anything to do with the fact that HMRC have reduced the number of employees available to chase tax cheats from 100,000 in 2004/05 to about 65,000
That\’s not actually what has happened.
Gordon Brown decided to merge Customs and Excise with the Inland Revenue. That means that we can go from two management structures to one. There should be cuts in headcount if such a thing is done. We\’ve also had significant investment in computerisation. That should reduce headcount again.
In fact, whi