So, yes, Ritchie is ignorant then

The National Audit Office issued a report yesterday that suggested that one in three of the richest people in Britain is under investigation by HM Revenue & Customs with the total tax subject to enquiry amounting to £1.9bn. Headlines have followed.

There are issues to raise here. First, the fact that there has been only one prosecution resulting from investigations of the UK’s super rich is staggering: it is very clear that there have been significant numbers of tax haven abuse investigations that have been settled by cosy deals sanctioned during the Hartnett era at HMRC that have left the impression that for tax purposes there is one rule for the rich and other for everyone else.

Apparently Richie doesn’t know that this is long standing policy. Determined by the politicians:

*sigh*

It’s known as the ‘Hansard extract’.

An undertaken given, at the start of an HMRC investigation, that if full co-operation and full disclosure are given then HMRC will NOT prosecute.

This works well. Taxpayers want to co-operate, courts are under less pressure, HMRC resources are used at what they are supposed to be doing. Getting money in.

Why’s in called the “Hansard Extract”? Because it is quite literally an extract from Hansard from a statement made in the House of Commons. First made on 5 October 1944 as official government policy and subsequently re-affirmed many times since.

That’s official government policy. If you co-operate, we won’t prosecute.

Which is why so few cases end in prosecution.

The idea that there’s only been one ‘scalp’ is utter nonsense There will have been lots of settlements where people co-operated.

If people want more cases (such as Harry Rednap’s) which achieved nothing then fine, go ahead. No extra tax will be collected, no penalties higher than would be achieved in a civil settlement.

7 thoughts on “So, yes, Ritchie is ignorant then”

  1. Let us cross our fingers that in his future blogs an actual name or names are mentioned. Another libel settlement could see Murphy in the property market again, having been forced to sell the unimpressive end-terrace in Ely to pay for it. Final destination, perhaps a static caravan in the fields around his beloved Downham Market amongst the migrant agricultural workers.

  2. And of course, if the policy changed to prosecute even if the taxpayer co-operates, then the tax take will go down, not up. At present, there’s an incentive to co-operate – but if you know that there’s likely to be a prosecution anyway, then you are going to be as obstructive as you can and give them as little ammunition as you can to use against you.

  3. One can’t help noticing that with Ritchie, wealth and envy, as well as taxes and punishment, go hand in hand. Here the mask slips… It isn’t about taxes, it’s about the frustration of being unable to mete out punishment.

    Can you imagine the number that would die at his hands if he was given the chance?

  4. @ Dennis
    One can but hope that someone would give him a whip and he’d die of a heartattack before finishing his first victim.

  5. Murphy goes completely bat-shit crazy when he says…..

    “The simple fact is that the tax gap persists … because of a policy decision not to close it…The aim is to deny the government tax revenues. The ideological reason for that is to support a shrinkage in government services.”

    Presumably then (in Murphy’s mind) this was also the aim of the previous Labour administration. As there was a tax gap under them also. Slightly wider.

  6. Andrew,

    How could anybody fail to see that if the government wanted to reduce the tax take they wouldn’t take the politically advantageous (to most Tory voters) step of announcing tax reductions?

    Yes, there is an ideological impetus (not near as strong as I’d like) to reduce the expansiveness of government – I’d be happy for it to concentrate on “efficiency savings” but I just don’t believe the British bureaucracy is capable of any form of efficiency.

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