Follow the logic in this

This summer KPMG proposed such standards in a document entitled Developing a Common Framework for Disclosing Tax Information. This they are now proposing should be the basis for wider discussion at a meeting on 10 December organised by the Covi think tank, which they fund. I will be attending, but I can say in advance I have three considerable difficulties with what they suggest.

First they say:

A prescriptive ‘one size fits all approach’ is not the right way to proceed with transparency.

Or to put it another way, they are not committed to a framework, let alone a standard, and are instead saying that whatever a company wants to disclose is good enough. I clearly do not agree: that fails any test of what is good accounting.

All right then. The statement is that there must be just the one system for all. Maybe that’s right, maybe that’s wrong, but at least we know where the Murphaloon is coming from, one size must fit all.

And then we get the Murphmonster’s own suggestions:

Tax Reporting Standards should cover:
Large companies;
Smaller companies;
Government reporting on taxation;
This paper only covers large company disclosures and suggests that TRS be issued to cover required disclosure on:
Company ownership;
Company location;
Company management;
What each component of the entity does;
The entity’s attitude towards tax, risk and lobbying;
Country-by-country reporting;
Quantifiable tax risk;

That is, one size does not fit all and we need different rules for large and small companies.

It’s quite something to switch in only a few paras, isn’t it?

16 thoughts on “Follow the logic in this”

  1. Tim

    Not for him – Leaps of logic within the same reply to a comment or even within the same sentence are not uncommon.

    Let’s hope nobody decides to stop him blogging – it’s essential the charge sheet is as long as possible when the reckoning comes.

  2. “….instead saying that whatever a company wants to disclose is good enough”

    A bit like FTM deciding what it will and won’t disclose about the checks it undertakes…..

  3. Van_Patten: it’s essential the charge sheet is as long as possible when the reckoning comes.

    I doubt there’ll be a reckoning. The mother ship will return one day and *pifff* no more terrestrial embodiment. Just a few FTM certificates being caught up in the breeze in Downham Market.

    Talking of which Paul Crystal has a comment on the Co-op thread quoting Mao’s “Let 1000 Flowers bloom”. When you consider what one Flowers did to the Co-op Bank, you might reasonably think that another 999 would be an embarras de richesses.

  4. Yet another attempt to drown a company in useless bureaucracy. These disclosures have costs. And who the fuck cares anyway?

  5. Andrew C: he thinks FTM is transparent! I’m sure the Kremlin looked transparent from the inside.

    The master plan for FTM was to get it a requirement for bidders in public procurements – then he’d have a captive customer base. Hasn’t happened. Heck, if basket cases like Hull Council or Doncaster Council haven’t picked it up, there’s no hope.

    VP and MB:

    I don’t think Tim will bring the great man to a halt.

    Heck, Tim isn’t even his big enemy.

    His big enemy is, of course, Jolyon Maugham. They are jockeying for the same seat as the Left Voice on Tax.

    They claim to be friends but their communications between them do have a poisonous hiss about them.

  6. Notice that Murphy completely misunderstands what the KPMG conference is actually about.

    Also notice that nearly all of the information he is calling for out of “larger companies” (whatever the fuck he means by that) is routinely disclosed by publicly held companies per SEC requirements.

    And as a CPA with 30+ years under my belt, I still can’t say “quantifiable tax risk” without laughing out loud.

  7. The mother ship will return one day and *pifff* no more terrestrial embodiment. Just a few FTM certificates being caught up in the breeze in Downham Market.

    TMB wins the thread!

  8. So anything other than one size fits all isn’t good accounting?
    Makes you wonder what he thinks about materiality being a fundamental principle let alone all the other IFRS rules and guidance that are specific to certain circumstances or the alternative methods allowed (inventory valuation for example)

  9. If Murphy understood materiality his tax avoidance campaign for the UK would focus on VAT and Self-Assessment rather than large, multi-national corporations.

    Large corporations evading income taxes makes up all of 4% of the tax gap (as calculated by HMRC).

    Evasion of VAT alone accounts for 30% of the tax gap, but you never hear anything from Numb-Nuts about that, do you?

  10. Apparently Uber routes all sales through the Netherlands and the VAT liability is on the individual drivers many of whom will be below the VAT threshold or not declaring. Given VAT avoidance is up to 20% of turnover I would assume as a total it’s an order of magnitude larger than the profit tax avoided.

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