Ritchie on estimation

The figure has never been higher than £37 billion and never lower than £32 billion. What is the chance of that? Especially when as the report notes of the methodologies used.

This HMRC’s definition of the tax gap of course.

Experimental is an interesting phrase: it in essence means ‘we made it up’. If you don’t believe me …..

No, we do believe you. as with your definitions of the tax gap which you just make up.

There’s a quite startling lack of self-knowledge here, isn’t there?

23 thoughts on “Ritchie on estimation”

  1. “The figure has never been higher than £37 billion and never lower than £32 billion. What is the chance of that?”

    What is the chance of a system producing consistent results within a fairly narrow range? Is a system which produces wild variations a better one?

  2. Ritchie slams HMRC as their estimates are in a tight range £32-37bn?

    This from the man who estimated the tax gap at £120bn in 2008, then after screwing (*) the PCS to pay for him to look at him again in 2014, came up with a figure of £119.4bn.

    (*) I actually offered to fund him to do a recalculation sometime between those dates to see how far I could wind him up. He wanted £40K to recalculate (or stick his thumb up his arse and copy and paste other reports, depending on your view of value for money!)

  3. @Noel – Seriously? £40k? Suggesting he got £40k or so from his previous figments of his imagination?

    TRUK LLP accounts don’t reflect these sorts of numbers, suggesting they go through personally. No wonder the cunt won’t publish his tax returns.

    Where is the fake Sheik when you need him? It would be great to have Murphy excused as the greedy fat slimeball he is.

  4. @Rob

    Remarkably high actually.

    Think of road safety for example, of the billions upon billions upon billions of transactions within the system that occur each year. What are the chances of such a system producing any sort of predictable outcomes?

    Well I’ll bet Richie £10 that the number of people killed this year is within 5% of the number killed last year.

  5. PS, Due to the high number of transactions and choices made in both traffic and financial systems I’m sure this is closely related to high entropy, disorder and equilibrium and a scientist will be along in a minute to explain it.

  6. One can imagine the dining table in a certain unimpressive end-terrace in Ely, upon which are strewn piles of used envelopes with scribbled computations on the back of them

  7. Andrew C

    He is a fanatical anti-smoker apparently – hectors people about it in the street! And I have this first hand from a close collaborator of his…….

  8. Andrew C – It’s slightly interesting to see that TRUK has income from grants which do not relate to the provision of any particular services, which has been deferred because the work it related to had not been done at the year end.

    That is, at first glance the sequence is:

    – I am doing X; and
    – You are paying me whether or not I do X; but
    – You are not paying me yet because I haven’t done X yet

    Now with a little thought I can see how the disclosures in the accounts could be consistent with one another, but it’s not at all obvious at first glance! 🙂

  9. “He is a fanatical anti-smoker apparently – hectors people about it in the street!”


    Who would have thought a fanatical, Puritan cunt would be a fanatical Puritan cunt in other areas of life?

  10. This is promising news though. With luck he’ll harass the wrong person and get a vibrant and persuasive punch in the face.

  11. Bloke in North Dorset

    He may have a point, but I don’t think he’ll like the logic.

    This is a bureaucracy we are talking about. If a new estimation were to vary widely from previous ones then questions would be asked and unless there is a major change in an externality it could be embarrassing for either the authors of the new estimation or the authors of the older ones. The authors of the old estimations may well be the bosses of the new authors or be in other senior positions.

    So its best all round, for the bureaucracy, if all estimations remain within an acceptable variation. To this end the models will have various “plugs” that can be tweaked to provide the right answer.

    Of course Ritchie isn’t capable of making that argument because it would undermine his Courageous State arguments.

    (See also climate change models)

  12. I can imagine his lectures are thrilling events where he asks the students questions and disagrees with their answers….

  13. Rob

    The problem with that argument (and its eminently possible it could happen in Ely certainly) is when you look at what happened to people who, for example, were perceived to have insulted Hitler back in the twenties most of them ended up regretting it as long as they lived – which wasn’t very long in most instances. With that example from history would you mess with him?.

  14. To put it another way, simple logic says HMRC’s data has to be wrong because they refuse to consider macroeconomic data as the basis for this macroeconomic estimate and instead persist with the idea that if a taxpayer does not submit a tax return this implies they have no taxable income.

    This has to be a Ritchie classic.

    First of all, he ignores the data in the HMRC table he uses in his post: The HMRC estimate of the cost of EVASION for IT, NICs and CGT. They even label it “Total Hidden Economy”.

    Second: Why no such ‘hidden economy’ calculation elsewhere in the HMRC table? Most probably the fact that the data collected by HMRC suggests that no material amount of tax would be due. Ritchie seems to think that companies fail to file tax returns, it must be to EVADE taxes due. I don’t know how it is in Wog Land, but here in the States (according to IRS statistics), companies that fail to file tax returns tend to be (1) small, and (2) failing or failed. Not much tax to be had in those scenarios.

    Three: What Ritchie’s really pissed off about is the obvious… Corporate EVASION by “large businesses” is a relatively trivial amount of the total of HMRC’s tax gap calculation. That’s where the cunt’s heart is, you know…

    If Ritchie was really serious about closing the tax gap, he’d be devoting his energies towards tightening up compliance in VAT, Self Assessment and IT, NICs and CGT. But then again, there’s no money (from Lefty suckers who might fund him) in chasing down members of the Lumpen Proletariat for taxes due, is there?

    Ergo, the attack on HMRC’s estimate.

  15. He’s now reheating the old paper he did for the PCS. It’s based on the belief that VAT figures are the key to everything and that income is really the same as profits.
    And he’s gone back to his line that debt written off is somehow collectible.

  16. @Dennis the Peasant

    What is intriguing about Murphy is that not only do UK tax professionals such as myself find him an intensely irritating cunt but even people such as yourself thousands of miles away feel exactly the same.

    The USA sometimes gets a bad press over here but views such as yours reassure me that Americans are not all bad.

    I will eat a hotdog and drink a can of Bud in your honour over the weekend.

  17. Andrew C –

    I have no doubt George III had more than a few Ritchies advising him on the colonies… Which is why we aren’t colonies anymore. We’ve seen the likes of Richard Murphy before.

    Earl Grey and currant scones for me tomorrow!

  18. So he thinks all the big companies – apart from Google obviously – are evading a load of tax?
    Google cannot be evading as a 6 year investigation could not find it.

  19. I have had to on a couple of occasions explain (with numbers) the difference between VAT returns and the accounts, not fun, but something you would expect any competent accountant to be able to do…..of course competency is the key.
    The range given would be 13% to 15% difference, not unreasonable for an estimate when we are taking about something so vague and involve effectively the whole economy.

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