It’s not fucking tax avoidance you moron!

I have long argued that UK tax avoidance is very much higher than HMRC admits. Even yesterday Philip Hammond took a swipe at Labour for using my tax gap figures rather than those of HMRC.

It was an own goal. That is because HMRC say total UK tax avoidance is just £2.2 billion a year. But yesterday the OBR published data on the cost to the UK Exchequer of small business, which they admit saves them tax. They say this may not be the only reason for incorporating, but the whole thrust of their report is that the growing trend to incorporate may be for just this reason.

And, as they put it, the cost is high:

I stress: this is the additional cost of this trend from now, not the current cost. And the current cost is high based on this data:

If 600,000 additional companies cost £3.2 billion the existing 1 million companies doing this must cost significantly more.

And this is tax avoidance to which attention may need to be given according to the OBR.

In which case the HMRC estimate of total tax avoidance being £2.2 billion is shown for the farce that it is.

It really is time HMRC started telling the truth.

The Spudmonster’s definition of tax avoidance is now stuff that people do which no reasonable legislator would have predicted. Here it is being predicted to the legislature. It’s not tax avoidance, is it?

25 thoughts on “It’s not fucking tax avoidance you moron!”

  1. I think it is tax avoidance – you take a step and pay less tax – although not in the sense that HMRC use the term, which tends to be abusive tax avoidance rather than aggressive planning. It’s basically just the tax cost of taxpayers choosing one available option over another.

    We really need to get the terminology sorted out. In a conversation the other day I suggested that maybe there’s an analogy with rambling:

    – There are waymarked paths from A to B, where there council has put up signs. No-one can complain if you go there. ISAs, pensions, etc.
    – There are rights of way from A to C, where the landowner would perhaps wish you didn’t go on them; but you’re perfectly entitled to, if you don’t mind the brambles and having to make your way through a field of cows, and in extreme cases having an argument with the landowner about where the path is
    – There is trespassing, which is a civil offence
    – Aggravated trespass is a crime

    The big question is whether a particular field has a right of way on it, or whether you’ve strayed off it and started trespassing. Depends how you read the map, sometimes.

    Murphy takes the farmer’s point of view: use the bloody paths, that’s what they’re there for; I shouldn’t have to put up with people taking short-cuts over my fields even if the OS map says they can (or perhaps it’s a very genteel National Trust perspective: Why can’t you just follow the tourist trail we’ve laid out? You get to see all the bits we think you’d like that way). But as far as I’m concerned, unless a right of way gets closed off then I’m perfectly entitled to use it.

    Avoidance is trespass, fair enough. But don’t confuse my right to roam with trespassing, and certainly don’t tell me that I’m a criminal if I wander into the wrong field, especially if it was you that let the paths get overgrown – or even shifted the signposts.

  2. “It really is time HMRC started telling the truth.”

    It really is time the fat moron started understanding basic concepts.

  3. We really need to get the terminology sorted out.

    We can have the clearest terminology possible, but if left-wing loonies deliberately misuse it there isn’t much which can be done.

  4. Pellinor

    Self employed people incorporating are clearly using legally established rights of way. To even hint at tresspass is to render the term worthless. For Murphy to call this avoidance is to suggest everything under the sun is avoidance. He has finally jumped the shark.

  5. Its only a matter of time before he starts calling for the abolition of joint stock companies and, candidly, quite right to

    I can think of no reason other than tax avoidance for any business choosing to operate as a limited liabilty company

  6. Ironman – I agree.

    But from Murphy’s point of view it’s still walking over his field, and:

    – Walking over some fields is normally trespass, so walking over this field of his must be trespass too. You can excuse yourself legally by pointing to a law that says you’re allowed to walk here, but morally it’s trespassing.

    – Your map’s probably wrong. His doesn’t have the so-called right of way on it – or at least, he thinks that right should have lapsed years ago. So your map might technically be correct, but in an ideal world it wouldn’t be.

    – Oh, actually, that right of way you’re talking about is a couple of yards to the left, so you’re not on it anyway…

    – There’s a way-marked path three fields away, so you should be walking on that. The Government is encouraging you to, and the fact that it doesn’t go where you want to go is no concern of his

  7. Just remember that that “way marked path” is a toll path and the cost is on the order of 10% of your annual profits. If the LHTD got any sniff of power, the rate would be higher and it would be based on revenues.

  8. Pellinor

    And you the sort of country guide who puts ramblers AT RISK of tresspass. Therefore we need a criminal offense for you… even if there is indeed a right of way and it’s marked on the map.

    You may be following the symbols on the map, but not it’s spirit!

  9. Pellinor

    But the Muphatollah himself defined tax avoidance as steps the legislator didn’t intend and couldn’t reasonably foresee. So by his definition it can’t possibly be avoidance to pay dividends instead of salary (it being NIC that is mostly saved, not tax). The legislator cannot possibly have not foreseen it and even if he had, it’s being happening for decades and could easily have been legislated against (close companies having to pay an NIC equivalent on dividends, for example).

    If we had to have three categories, tax planning, tax avoidance, tax evasion it’s hard to see this not falling in the first.

    Murphy’s equivalent of the rambler’s analogy requires a narrow path to be walled in and roofed over with armed guards ready for any escape attempt.

    (I actually phoned up the Ramblers’ Association to discuss this but the bloke just went on and on and on and on)

  10. I like the rambling and footpath analogy.

    On the other hand, I tend to approach the professor’s œuvre as being so bereft of reason that one can skip the argument and go straight to the assertion that it purports to uphold.

    This is pretty much using the material as it is intended, I think – none of his regulars are remotely interested in anything other than seeing the class-enemy pilloried and the meat of his postings is in the intolerance and sheer unpleasantness of the man.

    Much as I admire those here who clearly have considerable technical undertanding of these things and try to decorticate Murphy’s ex catheter pronouncements, I do worry that time might be better spent taking up a new hobby or popping out for a spot of dogging.

  11. “For Murphy to call this avoidance is to suggest everything under the sun is avoidance.”

    Which is exactly his position – everything belongs to the State (which in his head is him) and anything you manage to keep beyond what he considered you should is tax avoidance. If the government declares Top Rate tax to be 40% and he considers it should be 60%, then that is tax avoidance – you are avoiding paying as much tax as he thinks you should.

    L’etat c’est Murphy.

  12. It is a criminal offence for farmers to block a right of way – which never expires, incidentally – and my local county council has a department (one guy plus some work experience students in the summer when the paths are most easily walkable: the guy not has a brain but also uses it so contradicting Mr Ecks’ view of local government employees) to check that the farmers maintain the stiles.
    Going back to the original point – it was Gordon Brown (Murphy’s favourite Chancellor) who encouraged sole traders to incorporate by introducing a special very low rate for corporation tax on the profits of small businesses so that the guys were *a lot* better off taking their earnings as dividend income. [One might add that he sprung the trap a few years later by changing the adsvantageous corporation tax rules, so many guys found that they had all the extra hassle of directing a company with only a trivial tax advantage.]
    His argument that there must be tax saved by Shell as an incorporated company if I would save tax by incorporating means that *he thinks his readers do not know what he is talking about*

  13. Andrew C – “But the Muphatollah himself defined tax avoidance as steps the legislator didn’t intend and couldn’t reasonably foresee…”

    No, this is all perfectly logical and coherent. The legislator might be able to foresee that this might happen in general, but there is no way he could reasonably foresee that any particular taxpayer might do it. So even if he thought it would be OK in the abstract, that doesn’t mean it’s OK when company A does it, or company B, or company ZZ9…

    So there’s no contradiction here at all: one can attack individual taxpayers for avoidance without having to bother looking at the rules in general 😉

  14. @Pellinor “The legislator might be able to foresee that this might happen in general, but there is no way he could reasonably foresee that any particular taxpayer might do it. So even if he thought it would be OK in the abstract, that doesn’t mean it’s OK when company A does it, or company B, or company ZZ9…”

    So does that work the other way round? The legislator might be able to proscribe not declaring income as illegal in the abstract but couldn’t possibly foresee that any particular taxpayer might do so, meaning that a particular individual who does cash-in-hand is not evading tax?

  15. @ Pellinor
    *Of course* the legislator could reasonably foresee it if he took an instant to regard the taxpayer that is company A or company B.
    What you are saying is that the legislator *chose to ignore* company A and company B and company ZZ9. If a company chose to deliberately ignore X, Y or Z, the directors could go to jail.

  16. Pellinor

    Indeed. Any half-sensate member of the House who had met her could have for seen exactly what Margaret Hodge was about and would get up to if she could get away with it (likewise Keith Vaz I suppose). So this particular individual is axiomatically incapable of carrying out any tax avoidance. And indeed she never has; Ritchie has told us so himself.

    All nicely tied up in a bow

  17. Bloke in North Dorset

    John77,

    “It is a criminal offence for farmers to block a right of way – which never expires, incidentally – and my local county council has a department (one guy plus some work experience students in the summer when the paths are most easily walkable: the guy not has a brain but also uses it so contradicting Mr Ecks’ view of local government employees) to check that the farmers maintain the stiles.”

    Round here we have a number of volunteers, usually dog owners, who walk specific paths regularly and report any blockages or damage to styles that need repairing to the parish council, who have a councillor with responsibility for footpaths. They take it up with the landowner, who is probably one of the councillors anyway.

    It really doesn’t need a paid employee.

  18. @ BiND
    Firstly, we don’t have that sort of volunteer in any sort of numbers – too many of the locals commute to work (not just to London but also *other towns within the county* – there is a massive queue of cars going along the road from my town to another ten miles away *in both directions* during the morning rush-hour – why?).
    Secondly, the work-experience kids are *unpaid* and include some with “Moderate Learning Difficulties” so employing them to do this actually saves money compared to finding them work-experience which would require expensive supervision.

    The paid guy holds down a job in County Hall throughout the year, so his time running this scheme is a few hours each week in the summer holidays and a few minutes if someone reports a problem the rest of the year (and, occasionally an hour or so if a farmer raises a problem). I reckon that the scheme costs *less* than not having it.

  19. Hey Wogs –

    Tax avoidance is acts taken to legally lessen one’s taxes.

    Tax evasion is acts taken to illegally lessen one’s taxes.

    Try, for one fucking time in my whole fucking life, to get the motherfucking terminology fucking correct.

  20. Bloke in North Dorset

    John,

    Your taxes who am I to complain.

    It’s often said round here that half the population of Weymouth works in Dorchester, and half the population of Dorchester works in Weymouth, as a warning to stay off the A354 during what is laughingly called rush hour round here.

    Ironman,

    We don’t really have that problem round here, we all respect landowners’ rights and we don’t get many obnoxious walkers from the Ramblers Association, so landowners don’t get uppity if you stay a little.

  21. Bloke in Costa Rica

    Isn’t there something along the lines of if you can demonstrate that no-one has used a footpath for some period of time (a year?) then you can apply to have it removed from the list of rights of way?

  22. @BiCR
    The rule is that if you can demonstrate that no-one has blocked the footpath for 25 years it becomes a right of way.

  23. @ BiND
    Not my tax – my reduction in council tax.
    But my reason for liking this guy is that he is simultaneously helping the environment and post-GCSE kids who cannot get a paid job without demanding £millions from the taxpayer – that itis a saving on tax is just a bonus.

Leave a Reply

Your email address will not be published. Required fields are marked *