Hoorah for Kevin Farnsworth!

The basic strategy for most corporate tax avoidance is simple: TNCs seek to design their businesses so that they pay as much income as possible in countries where taxes are low and as many costs as possible in jurisdictions where the statutory tax rate is high.

I think that’s probably collect as much income just to give a slight hint to our sociologist who is trying to understand economics and accountancy.

And is is just great:

The ability of firms to interpret tax rules creatively also reflects the imbalance of resources between accountancy firms and tax authorities. In 2009, the four major accountancy firms alone employed nearly 9,000 people and earned £2 billion in the UK and as much as US$25 billion globally from their tax work; an estimated 50% of their fees now come from “commercial tax planning” and “artificial avoidance schemes”. In 2012, HMRC reported that it had 1,200 staff overseeing 783 large businesses, in respect of which £25 billion in tax was potentially outstanding. There are now around four times as many staff working for the accountancy firms on transfer pricing alone. And even where companies have been accused by HMRC of having underpaid taxes, the outcome has tended to be a negotiated settlement – an unequal process given the different resources available to the two sides and governments’ need to create a pro-business environment.

HMRC still has 50k people and the British government has some £700 billion a year at its command. What imbalance of power was that? Including the fact that the government has all of the people with all of the guns?

26 thoughts on “Hoorah for Kevin Farnsworth!”

  1. In 2009, the four major accountancy firms alone employed nearly 9,000 people and earned £2 billion in the UK and as much as US$25 billion globally from their tax work; an estimated 50% of their fees now come from “commercial tax planning” and “artificial avoidance schemes”.

    Then simplify the tax code, you cretin.

  2. What Mr Farnsworth needs to realise is that “commercial tax planning” consists very largely of trying to make sure that someone (often a lawyer) doesn’t accidentally introduce a step into a transaction that will give rise to a greater tax charge than Parliament intended.

    The distinction between this and trying to get hold of a *lower* tax charge than Parliament intended is quite critical.

    I can think of many examples where accidental tax charges are created, often simply by doing things in the wrong order. The Lobler case is the obvious one: a huge tax liability on a non-existent gain, where the judge accepted that it was completely unfair but, because the paperwork happened out of order, there you go.

    VAT, CGT, IHT, CIS, PAYE, EIS, EMI… I’ve come across cases in all of those where people (not me, thank goodness! So far…) have done what seemed to be obviously correct, but it turned out to be wrong on a technicality and so they’ve had a tax bill on what ought to be a non-taxable amount.

    Yes, some of the planning is deliberately trying to get lower taxes than you might otherwise. But by no means all, or even (in my experience) the majority.

  3. “earned £2 billion in the UK and as much as US$25 billion globally from their tax work; an estimated 50% of their fees now come from “commercial tax planning” and “artificial avoidance schemes”.

    Is he claiming 50% of the global tax revenue comes from planning (hardly surprising) or that 50% of all global revenues comes from planning (which would mean that he thinks total big 4 revenues are US$50bn)?

    Sneaky shit or financially illiterate buffoon?

  4. It sounds as if he gets his information from Arnald, that’s how stupid it is. Does he give any examples? Does he explain why Facebook employs staff in a low tax country such as UK?

  5. Pellinor/Andrew

    Your excellence and attention to critical details will not hold you in good regard in the eyes of Farnsworth or Murphy – it’s all about creating the image – the actual details can be brushed over and obscured by the wider narrative!

  6. Guns don’t matter if you have lots of people – that’s what the Poiles thought when they led a cavalry charge against the German tanks in 1939.

  7. The transfer pricing thing is annoying, too.

    For a tax advisor, transfer pricing is about collating data, drawing conclusions, and documenting things ready for a review.

    For HMRC, it’s about reading that documentation and deciding whether it makes sense; if you don’t like it, you pick holes and get the advisor to do a load more work to explain things.

    The workload is completely one-sided. In fact, the better the advisor does their job, the less need there is for HMRC to take time to look at things.

    HMRC needing as many TP staff as advisors only makes sense in a world where reading a document takes as much time and effort as writing it.

  8. It is essential for SJWs that they always present themselves as weak and defenceless, and their enemies as powerful, shady and ruthless. In reality the opposite is often the case, but the Narrative must always be the former.

  9. Bit of a myth, that one, John77.
    No-one does cavalry charges against tanks. In the same way as they didn’t do cavalry charges against castles or infantry in defensive positions.
    They were charging against German infantry in open order. Very vulnerable, infantry, when its on the move. Went the other way, they’d have slaughtered them. Then the tanks would be vulnerable, because an unprotected tank on a battlefield doesn’t survive long.

  10. BiS

    Indeed, it’s a myth. The Polish cavalry in the 1930s acted very much as did British cavalry units of the same era. They galloped about, for sure, but dismounted to fight. They were in that respect more like motorised infantry than units expected to fight on horseback. If there were occasions that mounted soldiers were shot at by tanks it was not by design of the cavalry units.

  11. In 2009, the four major accountancy firms alone employed nearly 9,000 people and earned £2 billion in the UK and as much as US$25 billion globally from their tax work; an estimated 50% of their fees now come from “commercial tax planning” and “artificial avoidance schemes”.

    All of it fucking legal, cretin.

  12. I understand it was kosher cavalry charge. Not the last recorded, but close.
    Not a bad tactic against tank supported infantry. If they charged from 1-200 meters out, from cover, That’d give 15 seconds before they’re in amongst the infantry. That negates the tanks, because they can’t shoot without hitting their own side. Machine guns are quantity of fire weapons. Not point accurate.
    Fifteen seconds isn’t a lot of time to identify threat & deploy. They’d be most of their way there before the first rifleman got one up the spout & aimed. And people who don’t hunt have no concept how small a target even something as big as a horse is. Big danger would be SMG’s. Certainly not enough time to deploy an LMG

  13. @:bis & AndrewC
    Yes, I was being illustrative
    I don’t think a lance would do much to a German tank and well-organised infantry, even without tanks, destroyed a cavalry charge on St. Crispin’s DAy.

  14. Pellinor>

    There’s one thing I’ve never understood about the Lobler case: why didn’t he just bugger off to another country and tell the taxman to whistle for the money?

  15. I don’t know. Because he was a nice chap who never really expected HMRC to put the boot in so viciously, perhaps?

    As they say: People joke all the time about the horrible things they do, they don’t *do* them! It’s absurd!

  16. @pellinor
    Exactly what I was thinking, HMRC just say prove it and it’s the other side that has to do all the work so there will always be some imbalance. Also HMRC doesn’t have to audit everyone every year, but you put the same effort into tax every year and extra if there’s an audit. Dealt with an audit once (VAT) where they basically sent a letter saying we think you owe us X, pay up or prove us wrong. Took a lot of work on out side and pretty minimal work on theirs to review our report.
    Isn’t this like saying the police are understaffed because there isn’t a policeman for every person in the country.

  17. ‘Kevin Farnsworth’: somehow, the perfect name for a fictional tedious sociologist. He sounds like the object of a savage satire about academic mediocrity.

  18. Perhaps someone should point out to Farty that he’s included everyone who works at anything in the four main firms, and comparing them against people who solely work on “large companies”.

    How many of that 9,000 make the tea I wonder ?

    Doubtless this stupidity will be endlessly quoted by the f*ckwit left, like his beloved Corporate Welfare.

  19. “50% of their fees now come from “commercial tax planning” and “artificial avoidance schemes””

    100% of my income comes from a combination of salary, savings, my winnings from the Miss World contest and what I make from counterfeiting.

  20. It’s a very valid point that, for all intents and purposes, HMRC reverse the common law principle. Effectively, you are guilty until you prove yourself innocent.

    If they’ve got your money, eg via schemes where your income is taxed at source, they hang on to it until you’ve proved your case. Apart from interest, there is no recourse for any hardship you suffer, not even bankruptcy.

    And when you have HMRC staff asking you why your large company client’ ban kings don’t equal the sales, you start believing that a bit more quality would solve a few problems…

    So no, they don’t need parity of resources at all.

  21. The SJW are so determined to prove that the magical money tree exists. It is to all practical purposes the religion of the left wing and the SJW high priests. You really have to understand that they truly belive that an infinite supply of money exists that will fund all the public and social services that they dream of. Nothing will convince them that the magical money tree does not exist.

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