It’s lovely what Ritchie is still missing, isn’t it?

So let me add three further things. First, despite what Jolyon says I do believe a) the tax gap is £120 billion and b) £20 billion is collectable.

Whether you call it a tax gap or not, collecting it is still a tax rise of £20 billion (or as Corbyn has it, £120 billion).

It’s still that amount of money flowing out of the pockets of the populace and into the things that Ritchie and Jezz desire to spend upon.

It’s still a tax rise.

31 thoughts on “It’s lovely what Ritchie is still missing, isn’t it?”

  1. Laugh test:

    120 B divided by 26.7M households gives us just under £5k per household, directly or indirectly (since all tax ultimately comes out of a real person’s pocket, even corporate taxation).

    That’s a ROTFLMAO figure right there…. And only gets worse if you take out households not engaging in meaningful economic activity from the figures, or households with low levels of taxation etc.

  2. Surely that uncollected tax money is actually a GBP 120bn fiscal stimulus to the economy? So why has GDP growth been pretty anaemic for all these years?

  3. All this shouting and disagreement!

    Can’t someone just print the money and let the rest of us live in peace?

  4. To add to Widdershins, if growth has been so anaemic with that £120bn sloshing round the economy, what will happen if it gets removed? And has anyone been following the “debate” between the LHTD and Jolyon Maugham in which the latter basically rubbishes his “estimate” of the tax gap?

  5. Oh dear, he’s trying to think again.

    He was fitting in as Corbyn’s adviser so much better when he was making things up.

  6. This is interesting:

    “enough to give every man, woman and child in this country £2,000.”

    As in fact he’s looking to take it from every man, woman and child…

    Quite a chunk of any evasion (the bit that might be collectible) will most likely be at lower income levels.

  7. I’m not sure the low-hanging fruit is that collectable – what does a tax inspector investigating low-level VAT and IT fraud cost per hour actually spent on a case?

    A friend of mine who’s a small businessman below the VAT threshold said his friendly HMRC type said that if there wasn’t the prospect of GBP 30k in a case they wouldn’t work it cos it would cost more than what they’d bring in – if there was indeed anything provable to bring in, which there might not have been….

    I believe this fits with Tim’s “optimal level of tax evasion” concept that got the LHTD so desperately exercised a while back. (which was an obvious concept expressed in Economics language tailor-made to chutney the gusset of certain retired accountants from Wandsworth).

  8. Ritchie is currently picking a fight with Robert Peston. His positioning alongside Jeremy Corbyn is bringing him into the public gaze. One can tell he is getting heated as his typing has gone from two fingers to two fists.

  9. Ritchie has gone from there’s no need for austerity as the 100bn budget deficit can be covered from his tax gap to only 20bn can be collected?

  10. @ abacab
    The first time I had to submit tax returns as a self-empoloyed individual I sent the entire spreadsheet of income and expenditure to my tax inspector: the response was “please just send us a summary”,
    I am still waiting, more than a score of years later for a visit from HMRC to check my VAT and tax returns.
    I am not low-hanging fruit but my wife gets fed up with my having to keep umpteen years of data (old capital items involve a 20% decliningbalance so my first notebook bought in 1991 is still a feature of this year’s accounts)

  11. abacab – it depends on the enquiry. Some can be very small.

    For example, National Minimum Wage enquiries have a threshold of £100, above which the employer is named and shamed as being the sort of employer that diddles staff out of their pay (rather than being the sort of employer that doesn’t agree with HMRC’s nit-picky definitions – I don’t know of anyone who qualifies as a “salaried worker” for NMW purposes, for example – or makes some minor errors in time recording). I’m looking at a sub-£1,000 one now (which has taken best part of a year to resolve so far); the other couple I’ve had recently were below £500.

    In fact, if you look at the amounts they reckon they’ve recovered in NMW enquiries (which are all public, as part of the naming and shaming), it’s some very small amounts: only a few enquiries get over a couple of grand.

    A lot of personal tax enquiries start with letters of the form “From bank records we believe you should have declared £300 of interest, but you’ve only declared £100; do you have any comments?”.

    To which the answer is quite often an innocuous “I’m a signatory on my aged mother’s account for convenience paying her bills”, or “That’s my son’s account, and the money is all from his grandad”, or whatever. But it can also be “Oops, that was a 3-year bond that rolled over, was I meant to report it anyway?”, and so on 🙂

    A PAYE or VAT visit can easily end up with just a few hundred quid of overlooked expenses, although as HMRC can sometimes get tens of thousands from a relatively small company the visits are worth doing. Fuel scale charges are the big earners 🙂

    £30k or so as a threshold would be a medium to large business enquiry, in my experience. ICI’s CRM wouldn’t get out of bed for it, but most inspectors would.

  12. john77 – the point of the reducing balance basis is that you don’t need to track the individual assets, you just need to keep the running total. The contribution of the 1991 notebook will be felt in the pool, but there’s no need to have that level of detail.

    Although you should note that it’s 18% now, not 20% 🙂

  13. Sorry, wasn’t clear enough – friend was told that 30k was for a VAT enquiry. Was also a few years back before we started witchhunting for a hundred quid here and there……….

  14. @ Pellinor
    Quite true but if HMRC ever came to do an audit I should still need my 1991 receipt for the notebook computer. The reducing balance thing means that you can *never* throw away a receipt until HMRC has acknowleged that it has seen it.
    Thanks for the tip – HMRC failed to tell me that itis now 18% – bastards!!

  15. The posts on Peston are comedy Gold- I am really looking forward to a Corbyn win! I don’t give Murphy Much hope of surviving the level of scrutiny his ideas will receive and the ‘Comments policy’ gambit isn’t going to work in these forums…… He is hoisted by his own idiocy- it’ll be great to watch….

  16. You know, Richard and now Jeremy have bandied so.many different numbers around these last couple of weeks it’s hard to keep up. So someone remind me; only last week Jeremy, courtesy of Ritchie, was giving us figures for tax ‘subsidies’ to Big Business (hiss boo). How much was it again?

  17. VP I wish it did work that way, but the steaming great toasted elephant bollocks spouted by the hypocritical Podge went largely unremarked by the media.

  18. @John77

    The legal requirement for keeping records for tax purposes is (roughly) 6 years from the end of the business period. You could also scan receipts if you wanted to.

    Capital Allowances range from 100% to 8% p.a.

    It’s not HMRC’s responsibility to tell you these things but a decent accountant will know.

    Very often people who think they are saving money by not paying a decent accountant for advice are somewhat like the man who represents himself in court. He has an idiot fro a client.

  19. John77 – once you’ve established that the expenditure has gone into your pool, you’re good. HMRC can only normally go back 4 years, so if they were to enquire into your pool balance they could quite reasonably ask for 4 years’ worth of receipts, but the rest is locked in.

    In effect, by not enquiring into your tax affairs they have acknowledged your right to claim the allowances. This is the great thing about “self-assessment” – if they want to make any changes they have to be able to show that you’re wrong. And they have only a limited amount of time to do it. If they wanted to see your 1991 receipts, they should have asked in the ’90s 😉

  20. abacab – I’ve got VAT enquiries well under £30k. I had one a couple of years ago into a husband-and-wife part-time restaurant trading under the threshold. To get to £30k the turnover would have to have been at least triple what it was, even if they’d grown all their own food…

    Repayment returns in particular seem to get a lot of interest – I pretty much expect all of them to get an enquiry, regardless of merit.

  21. I am not low-hanging fruit but my wife gets fed up with my having to keep umpteen years of data (old capital items involve a 20% decliningbalance so my first notebook bought in 1991 is still a feature of this year’s accounts)

    I’ve kept every bank statement, credit card bill, and payslip going back to about 2003 on the basis that if ever a tax authority collars me, I can at least demonstrate where my income came from. People I know who have been auditted without having kept documents struggled somewhat.

    My guess is HMRC works much the same way: the possibility of an audit will do enough to ensure most people keep their documents in order and report honestly, and that in turn ensures compliance amongst the majority. Which is probably how it should be.

  22. @Tim Newman

    As far as HMRC is concerned for keeping records it’s 6 years for those in business and 1 year for those not in business.

    HMRC can’t go back further than 20 years under any circumstances (and in the absence of fraud it’s 6). In the absence of records, HMRC use a scale-back and assumption method. If you were fiddling your taxes last couple of years, they can assume you were doing it in the 2,3 4 or however many years before that if your circumstances were the same.

  23. Fuck me, they’re deluded aren’t they?

    Over on Ritchie’s blog they are saying that Corbyn is the result of a groundswell of desire among the masses to get back to good old fashioned socialism.

    Like that offered by the Trade Union and Socialist Coalition perhaps? TUSC stood on an ant-austerity socialist platform and fielded 135 candidates in the last general election and presumably chose those constituencies with the biggest groundswell. They got a total of 36,420 votes at an average of 270.

    The revolution is upon us.

  24. AndrewC:

    Everyone in the country who would ever vote for Corbyn in a GE is going to vote for him in the leadership election. As you say, there just aren’t armies of people demanding socialism.

  25. But, Corbyn has a new angle.

    For an investment of 3 quid, you can vote for Corbyn as leader of the Labour party.

    Should he become PM, we’ll each be getting up to 2,000 smackers annually through closing the tax gap.

    Britons may not like Socialism very much, but we can recognise a good deal when we see one.

  26. Jack C
    The buggers take your money and don’t let you vote.
    If you are a pot-addled lefty loon, you’re allowed to vote for Corbyn, but if you are a sensible Tory you are not.
    Where’s the justice in that?

  27. Well, okay, we don’t even have to part with the 3 quid.

    Come the General Election, we can vote Corbyn for free so even better.

    And I forgot the 93 billion (which is also annual).

    We’re all going to be baffled as why we never did this before.

  28. remember that the LHTD is calling for an “investment” of £1bn in HMRCper annum to enable collection of this £20bn “tax gap”. As someone points out, this is equivalent to HMRC recruiting all the currently qualified tax professionals in the country and continuing to do so every year. LHTD emphatically says on Maugham’s blog that it is annual “investment” of £1bn! He is seriously deranged.

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