Oh Rilly?

I have made my position clear that I do not think undertaking an abuse helps end it

That would be why using a personal service company, with low directorial salaries, profits paid out as dividends, with a bit of income splitting, would be the way to ending the abuse of using a personal service company, with low directorial salaries, profits paid out as dividends, with a bit of income splitting, with the income made from writing articles about how one can use a personal service company, with low directorial salaries, profits paid out as dividends, with a bit of income splitting, and also reports announcing that using a personal service company, with low directorial salaries, profits paid out as dividends, with a bit of income splitting, is an abuse that must be ended.

Glad we’ve got that settled then.

33 thoughts on “Oh Rilly?”

  1. ‘E’s a card, inne?

    I’m not quite as ready as some to perform pop-psychology diagnoses on people, but this monumental lack of self-awareness must have some kind of pathological component.

  2. Technically, and I’m sure one of the accountanty types will correct me if I’m wrong, but an LLP doesn’t pay out dividends, rather it distributes profits?

    The tax treatment of the two being somewhat different.

  3. It’s amusing how some of his threads, like a fine claret, mature and open out with a rich bouquet.

    His “Who owns the company?” one is one such late developer with currently 38 comments which has allowed me to identify Ritchie’s second law of numbers (which others will certainly have picked up on before me) namely that he becomes increasingly rabid as the thread lengthens.

    Around the 30 mark his replies are distinctly foam-flecked.

  4. Top trolling by Jason Voorheis. I mean really – Jason Voorheis?

    That said, calling it trolling would suggest he isn’t correct, which he is and yet again, Murphy isn’t.

  5. SE

    “LLP not company”

    If you mean re Tim’s description above, he’s referring back to the days a decade or so ago when Murphy used to do that Ltd Co malarkey only then to claim later, once he got all righteous, that he only did it to demonstrate that it was abuse – or something…

  6. TMB – Thanks

    It gets better…

    I would be very happy to teach this

    Shattering the myth that companies are ‘owned’ as simplistic neoliberal dogma suggests is vital

    Yikes – he doesn’t know when to gracefully retire and stop digging!

  7. SE

    Got you – but didn’t he also write those articles (about how clever it was) from within his Co? Ie, it’s only the 4th part above (!), that “this is abuse”, which is done from within the LLP? I think?

  8. He hasn’t even grasped the essential thing, which is that John Kay is talking about listed companies, with large numbers of shares held on behalf of 3rd parties by various kinds of investment vehicle – pension funds, OEICs, investment trusts, unit trusts etc., where indeed the question of ownership is somewhat moot.

  9. Here in Hong Kong they don’t give a shit about personal service companies.

    Salaries tax is:
    – tax free band
    – 2%
    – 8%
    – 12%
    – 16% (capped at total tax of 15% of salary)

    Sole trader tax is 16%

    Corporation tax is 16.5%

    Dividend tax is 0%

    Take salary or dividend (after CT), they don’t give a shit as the difference is negligible. Tons of tax code not needed, loads of time saved by people and the IRD and everyone is happy.

    It does of course help that rates are low either way!

  10. Murphy is a man who claims to be a competent advisor of businesses yet didn’t know that shareholders can vote dividends…….

    His latest back-tracking is beyond belief. First he claims that shareholders can “NEVER” vote dividends, then when it’s pointed out that they most certainly can, he claims he is right because you need a majority of shareholders.

  11. diogenes

    Might be easier to start with ‘a list of things Murphy knows about’ – finishes with a blank sheet of paper – job done!

  12. That ownership thread is an absolute car crash, yet he still keeps digging.

    I’m going to use the same MurphyLogic on dividends to prove that no-one in the UK has a vote:

    – People in the UK can’t have a vote because only the majority of voters influence an election, so because I’m not in the majority my vote can’t influence an election therefore I don’t have a vote therefore no-one has a vote.

    Go on: prove me wrong.

    Candidly, I am right and you are wrong. Any attempt to state otherwise is neoliberal sophistry.

  13. I think he’s finally jumped the shark on the company ownership thread. Could anyone really read to the end and still take RM seriously afterwards? Candidly, etc etc I think not.

  14. @Arnald

    A company is governed by its Articles. If the Articles say that Directors can declare dividends then they can. If the articles are silent as to who has the power to declare dividends then they have top be passed at a general meeting of the shareholders.

    The model Articles on Companies House contain a clause that dividends cannot be declared unless recommended by directors and must not exceed the recommendation BUT these are only model (suggested) articles by Companies House. There is no reason why the shareholders couldn’t adopt articles that gave them the right to decide on (legal) dividends outside of the recommendations of the directors.

    Murphy shows he just doesn’t know company law.

    If Kay’s article is claiming that just because I own shares in Rolls Royce doesn’t mean I can turn up to their factory, wander around and use the machinery, well OK then but so what? I do nevertheless own part of the company. Were it to be liquidated I, as a shareholder, would be entitled to get something of the net assets and a non-shareholder would not.

    As usual, Murphy sees a glimmer of a sliver of support for his views in an article and then just will not back down as his lack of knowledge is revealed.

    And you continue to support him?

  15. Professor John Kay and, chortle, Professor Richard Murphy, two TITANIC iconic figures in the dismal science.

    Oh Lord, my crotch is wet, I knew my sphincter wouldn’t hold out

  16. BraveFart

    Not sure what you are getting at. John Kay has a very respectable CV:

    “I was born in Edinburgh, and attended school and university there, where I was drawn to economics by the notion that one might understand society better through the application of rigorous and logical analysis. After a period of study and teaching at Oxford University, I became Director of the Institute for Fiscal Studies, where I established it as one of Britain’s most respected think tanks.

    I then shifted emphasis from public finance to business economics, taking a chair at the London Business School and establishing an economic consultancy, London Economics, which grew rapidly and provided a platform from which I gained experience both of running a small business and of the activities of large business: experience enhanced by non-executive roles in several companies and assignments for a variety of governments.

    In 1996 I was attracted to the idea of establishing a business school at Oxford University and spent three – not entirely happy – years as founding Director of the Said Business School (see Prospect article). Since leaving that institution in 1999, I have focussed on more popular writing, contributing a weekly column to the Financial Times and publishing several books”

    His books are very interesting and informative as well, especially “The Truth about Markets”, and “Obliquity”.

  17. I thought my “,chortle,” before R Murphy would give the clue that it was not my intention to impugn John Kay’s credentials.

    I will try harder to make my meaning clear next time.

  18. I thought he had claimed that as an accountant he only had clients that weren’t interested in tax avoidance schemes. Likely he isn’t using tax avoidance then in the same sense he does now to include allowances etc.

    I’ve noticed he likes to play ‘the rules have changed since I did it’ card to avoid dealing with issues or justify his participation when you press him on accounting stuff.

  19. The company thread’s only a car crash because he can’t come right out and say that there are no property rights under a fascist regime.

    And the bit about abuse – is he saying that he doesn’t think it’s abuse, or that he isn’t helping end it?

  20. BraveFart…I see now what you were doing. I truly think that Murph thinks he is equivalent to John Kay. Which is, candidly, ridiculous, since he doesn’t understand what John kay is saying.

  21. I am still amazed that Murph has not twigged Kay’s argument.

    These days, most people hold listed shares in the form of pooled investments, via pension funds, unit trusts etc. Yes, I do have some direct shareholdings, but the majority of my holdings are in pooled investment funds and I imagine that is the case for the majority of people.

    So my name does not appear in the register of shareholders. Yes I get dividends and am entitled to a share of the proceeds of liquidation. I am not entitled to vote on company resolutions. Most of my ISA holdings, which are direct investments, do not give me voting rights either – the shares are held by nominees. To what extent can I be considered an owner or part-owner of these companies?

    It is a simple concept to grasp. For example, BT has over 8bn shares in issue. Of these, 7bn are in the form of holdings of more than 1 million shares. I suggest that these are not held by individuals but by funds.

  22. Back in the 1980s, I was surprised to learn that the essential difference between a ltd and a plc was that the latter had to have £50k of share capital. I think most people were like me and thought a plc was listed/quoted. Does anyone know why the difference was set like that, I believe it was in 1974? Otherwise I can spend a few hours browsing Hansard. I don’t think Murph understands the difference…add it to the list.

  23. “To what extent can I be considered an owner or part-owner of these companies?”

    One answer is that you are most assuredly an owner if it goes phut.

    Another answer is that it’s so different from owning a house, a car, a toothbrush, or even shares in a private company, that perhaps some new vocabulary is required.

    Of course, all this explains why it is so easy for the executives to pillage the shareholders.

    One of the features of politics that’s struck me for years is that the massed ranks of the left have never, as far as I know, made a single intelligent suggestion for how corporate governance mighty be reformed to deal with these issues. Nowt so conservative as the Left, is there? They’ve never early advanced beyond murdering kulaks.

  24. Given he doesn’t seem to understand company law possibly he doesn’t also realise that words can have a legal definition that is much narrower than their common usage, the fact they have a wide common definition being the reason they have a specific legal definition in the first place.

  25. dearieme…in your day,the Left owned all those companies and they never got round to defining things for the untermensch and bourgeoisie

  26. Bloke in North Dorset

    Crickey, reading that was hard work and reminded why I rely on those with a stronger constitution to try to keep him in check.

    I’m no expert on this, but it strikes me that he is confusing ownership and control. If I have shares in a company I have a share of ownership with limited rights and liabilities because I don’t have direct control of the day to day running of the company, that’s the job of the directors.

  27. Re: Diogenes on “pooled investments” above.
    No
    It’s curious that Murphy seems to be denying the whole raison d’etre of the ethical investment movement. Something “of the peepul”, you’d think he’s be completely alongside.
    Any participant in a pooled investment has the ability to join in collective action to influence the voting of the shares held on their behalf. Mightn’t be quite so straightforward, but it’s still there. So there’s really no difference to being a direct shareholder. A majority in either camp can serve to direct company policy, irrespective of directors’ wishes. Probably proportionally more so, in the case of pooled investors. It only takes a majority in the pool to have the full weight of the voting rights of the held shares behind any issue.

  28. If I owned 1/1000 of a block of flats chances are I’d not be allowed into one of the flats if I trucked up and demanded entrance.

    Would that mean I didn’t really own any of the block of flats?

  29. A good point mon namesake – there are plenty that own perhaps a 1/100th share in a racehorse, but typically fewer than 6 of them might be allowed in the saddling enclosure, and none of them would get to sit on it.

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