This is fascinating logic

Andrew Carter says:
February 20 2016 at 12:34 pm
Exactly the same sum is due?

Richard, I mentioned a company and an LLP. They both provide the same limited liability in law. Some professions cannot be companies (Lawyers and accountants for example) but bloggers and authors can choose to operate as a company or an LLP.

Operating through a Ltd company with profit distributable to a director of £70,000 then paid as salary would result in:

Employers’ NIC – £7,504
Employees’ NIC £4,521
Income tax £14,401

Net in the directors’ pocket £43,773

You need only one director/shareholder so there is no need to co-opt someone who does nothing into the business.

Choosing instead an LLP with the same £70,000 sees:

Class2 NIC – £145
Class 4 NIC £3641
Income tax £17,393

Into the Members pocket goes £48,821. Over £5k which would have gone to the government is saved.

Of course you do need another person involved to actually form an LLP. Even if that person does next to nothing and it’s a little….well some might say artificial.

Of course it’s all legal and good tax planning. Or is it avoidance? The boundaries are so grey these days.

Richard Murphy says:
February 20 2016 at 3:33 pm
So wrong

Accountants can be companies

But you ignore the fact that partnerships are taxed in exactly the same way as LLPs

As are sole traders

So if the alternative was that (and it would be, for example, in my case, where an LLP was used solely to differentiate activity from my unincorporated accountancy practice) then there can be no avoidance at all, however hard you pretend

And using a structure specifically allowed by law is also quite explicitly not avoidance

So I suggest you stop making yourself look stupid

This is from the same bloke who insisted, in a lengthy report, that a Ltd company which used dividend splitting etc was indeed tax avoidance. Who insisted that the Greens were tax avoiding. When non taxation of UK dividends for someone non-resident nor domiciled in the UK is expressly allowed in law. When transfers between spouses are mentioned in law as not being taxable. That Boots was tax avoiding when deduction of interest is expressly and specifically allowed in law. That Vodafone was tax avoiding by pointing out that the CFC rules, in European law, did not apply to EU subsidiaries. That Starbucks was tax avoiding by paying a margin to the Swiss coffee bean trader, something that the law states it must actually do under transfer pricing rules, that they were tax avoiding by paying a royalty to Holland, when EU law specifically states that such royalties cannot be taxed in the UK.

And currently insists that amazon, Google and the rest are tax avoiding by selling from Ireland into the UK, something which is specifically mentioned in the very basic structure of the relevant tax treaties: yes, treaties are law.

Using a structure specifically allowed by law is also quite explicitly not avoidance

WTF has he been complaining about all these years then?

21 thoughts on “This is fascinating logic”

  1. T’was I engaged in that discussion with Murphy. The man is a hypocrite beyond boundaries and arguing with him is like wrestling blancmange.

    But just for that gem of a quote it’s worth it.

    Any criticism by Murphy of any tax avoidance strategy adopted by anyone can now be countered with

    “but you yourself said using a structure specifically allowed by law is also quite explicitly not avoidance”

  2. “So I suggest you stop making yourself look stupid”

    He could have politely responded and left it there but because he is a massive cunt he added that at the end. He just cannot help himself.

  3. He’s wrong when he says “using a structure specifically allowed by law is also quite explicitly not avoidance”. It is avoidance: what it’s not is evasion. Jeeze, he must be employed by The League of Racist Stereotypers to advance the image of the thick Mick. Thank God for Burke, eh?

  4. His wife is a partner but never blogs or speaks about tax. Surely this is an artificial arrangement to get into an llp

  5. Murphy claimed that he chose LLP over Ltd company because he was more used to that format having been a partner for years. I pointed out that he was director/owner of at least three limited companies registered at his home address including Fulcrum Publishing Limited between 2002 and 2012 so his claim he was only used to being in an LLP was nonsense.

    That’s the post he didn’t publish toward the end of the thread claiming he’d answered all my points.

    Fat hypocritical immoral cowardly cunt..

  6. He has also previously said that the LLP stays was because his ‘funders’ wanted it. His reasons don’t seem to stay the same for very long.

    But then it might also be because of little clauses in his grant about them not being given to sole traders.

    And then there are his shifting answers to the “why did you write articles in the Guardian advising people how to avoid tax?” Those answers never seem wholly convincing.

  7. Anth says:
    February 21 2016 at 7:25 pm

    Is a partnership really reflective of reality though. I don’t see your wife posting many blogs or doing public speaking about tax. Some people might call having your wife as a partner solely to avail yourself of an LLP artificial. Devils advocate, I personally don’t have an issue with anyone choosing one form of incorporation over another
    Richard Murphy says:
    February 21 2016 at 7:31 pm

    Does she risk capital?

    Yes

    Does she take part in management decision making?

    Yes

    Does she discuss a great deal of what I do before it happens?

    Yes

    Is she underpaid?

    Probably

    Now stop wasting my time
    – See more at: http://www.taxresearch.org.uk/Blog/2016/02/19/hmrc-survey-finds-that-people-think-that-tax-avoidance-is-unacceptable/comment-page-1/#comment-747246

    He is beyond parody. So far beyond that he even deletes posts from Rocco Siffredi, who has offered to film the married couple in the act of tax-consensual love.

  8. Capital at risk. 1pc of 13k by the look of his last accounts. 130 quid at risk to give limited liability benefit and ni saving. Bargain

  9. ‘using a structure specifically allowed by law is also quite explicitly not avoidance’

    Isn’t that actually the definition of avoidance, to arrange your affairs in such a manner as to pay the least amount of tax legally due.
    With this level of thinking if I was one of his ex clients I might be thinking about having someone review my tax affairs

  10. Interesting he states that planning that involves a clearance can never be tax avoidance. I wonder if he would agree that this logic applies to clearances obtained by way of a tax ruling in eg Lux / Netherlands.

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