Great blog Richard. You really put Toby Young down. Why won’t selfish people like him realise that the more tax everyone pays the better the country will be? Everyone knows that the government never really wastes money, and is actually better at looking after us than we are.
It’s no surprise though, is it?
To quote Lisa Simpson:
“Check for sarcasm… it’s clean!”
Only Ritchie ain’t as smart as Lisa..
Sorry
I had to boost his ratings just to see it.
Still there. Wonder how long it will last.
I had to see it, and stupidly left a comment, repeated here as it will be deleted there…
“No point arguing with you lot – you’re all fucking mental.
If you want to pay more tax than the law says you have to, that’s your choice, I don’t, and will do what I can to pay exactly what the law says and no more.
Mr R Murphey knows all about structuring his affairs in this way as has been documented elsewhere, although, oddly enough, not on this blog.
Keep up the good fight TW
It’s a familiar mantra from Worstofall and his supporters that “tax avoidance is legal”. Well it is if it works. What about the situation where the courts have found that the attempted tax avoidance is illegal? Should the perpetrators of this illegallity suffer any penalty? Or should they (as happens now) merely pay the tax they would have paid had they not entered into the illegal transactions?
Tim adds: Interesting question. I think they shouldn’t face any further penalties but for a slightly complex reason.
English law generally works on the basis that everything is legal except what is expressly illegal. So if you try a method of tax dodging which has already been ruled illegal then you’re simply breaking the law and deserve the punishment the law provides for doing so.
However, if you try some new method of tax dodging and everyone is scratching their heads to try and work out whether this is legal or not (and this is of course the reason why it ends up in the courts) then you haven’t actually done anything illegal. Because the law, as yet, doesn’t say that what you’ve done is illegal.
So, why should you be punished? for there’s another very important part of English law: we don’t run it retrospectively. You can only be punished for what was already illegal at the time you did it.
And yes, I do think that last part is vastly more important than whatever amount of tax is being dodged.
Someones missed the point, tax avoidance refers to legal means, if its declared illegal it then becomes evasion.
Somehow this argument brings to mind a legend I heard about Sweden in the 1970’s (days of Pomperipossa): there was a proposal on a thing called “tax on income that was avoided with the purpose of avoiding tax”.
For instance, if a doctor earned a lot during a year, and was expected to pay >90 % marginal tax on his income, (s)he would simply decide it’s not worth it (at the far end of Laffer’s curve) and decline the work – (s)he would not accept overtime assignments, or even might take leave without pay and just have free time.
This was seen as eroding the tax base, so the idea was to tax the doctor for income from work that he would have been doing if he had not avoided work.
Well, this never pulled through, even in the legend, even in Sweden. Somehow Mr. Murphy reminds me of this.
@Me
I have to play devil’s advocate here re the legal point. The law, and especially the common law, is based on the idea (some say ‘fiction’) that the task of the court or judge, aided by legal counsel, is merely to find what the law is and always has been. In this sense, judges never create the law as such, merely finding what the law is from studying binding precedent. By this argument, a finding that some tax avoidance scheme is actually illegal isn’t in fact retrospective in its effect – it is merely pronouncing and clarifying what the law was at the time the scheme was embarked upon. So in theory, failed tax avoiders are actually also evaders.
Of course that’s the theory. Perhaps only the traditional theory in a sea of competing legal philosophies. Certainly it seems at odds with plenty of supreme court/House of Lords decisions where judges tend to fill in the gaps as they see fit, based on policy and the like.
Another related point I have tried to make reasonably to Richard, but have often been blocked from doing so, is that the idea of a general tax avoidance principle, whereby HMRC wields enormous discretionary power to declare what is and what isn’t legal, undermines the rule of law in a heinous way. If there’s uncertainty in tax law we have to ways of resolving it.
Option 1 is a court of law in which skilled advocates present competing cases to an experienced judge, whose decision will be public and usually recorded for future decisions to be based upon.
Option 2 would be a closed-off, unaccountable bureaucrat who has every interest in finding against the taxpayer.
I think we know which the vast majority of the electorate would prefer.
I don’t know about Swedish law, but Britain used to, and may still do, tax the earnings of prostitutes even though prostitution was illegal. So how did they calculate how much a prostitute earnt in entirely undeclared cash transactions?
They *deemed* her to have earnt a certain amount and then taxed her on that.
Presumably Tax Inspectors had to decide if she was pretty enough or willing to do, you know, special services. Hard work if you can get it.
I suggest we don’t tell Richie.
Semi-relatedly, the Romans allegedly (*) used to have a form of execution where they put a man in a sack with a dog, a cat and a rat, and sealed the sack until it stopped moving. I’d be quite happy to see that with Richie and Toby Young.
(*) ie “almost certainly didn’t, but someone once told me they did”.
1. Raise revenue; For the government to piss against the wall.
2. Reprice goods and services considered to be incorrectly priced by the market such as tobacco, alcohol, carbon emissions etc. Considered by whom?
3. Redistribute income and wealth; I’ve never understood why my income should be taken from me and given to some poor unworthy slob (thanks to Daffy Duck).
4. Raise representation within the democratic process because it has been found that only when an electorate and a government are bound by the common interest of tax does democratic accountability really work; What the hell is he talking about?
and finally to facilitate:
5. Reorganisation of the economy through fiscal policy. For “reorganisation” read “screw up”
“I’d be quite happy to see that with Richie and Toby Young.”
What’s Toby Young done to upset you? Oh, right, try to offer a private school quality of education for free to everyone. What a bastard!
You really need to look into yourself and see that your ideology makes you a really quite unpleasant person.
Tim, the law may not be retrospective but as I understand it, and I am happy to be corrected, it applies from when they original claim was made.
So if HMRC says to a company that they should, for example, pay tax on overseas earning and wins the case then the tax is effective from the original claim, said company having made a provision in their accounts for the period the case trundles through court. Of course if the company wins that the provision is no longer needed and becomes profit.
john b,
(*) ie “almost certainly didn’t, but someone once told me they did”.
You probably saw it in The Untouchables when an official tries to offer Ness (Costner) a bribe.
FYI There’s also no such thing as a “Sicilian message”. Coppola/Mario Puzo just made that up.
“Someones missed the point, tax avoidance refers to legal means, if its declared illegal it then becomes evasion.”
Yep. That’s Taxation 101, yet Ritchie the C.A. still cannot fathom the distinction. Given that, is it any surprise that sarcasm would elude him?
What’s Toby Young done to upset you? Oh, right, try to offer a private school quality of education for free to everyone. What a bastard!
Err, no. I thought Toby Young was a terrible cunt long before he was involved in education. See: the movie of his life in New York, *which he wrote*, rather than suing the makers for libel.
if you are avoiding tax using a scheme of some sort, and it is challenged then most likely HMRC will raise an assessment on you, you will appeal it, and then it will go through the courts – or more likely you will reach a settlement. If you lose that does not make it evasion, but if there is a penalty that is because the court decided you should pay one.
The great man has spoken. Toby Young is not worth arguing with but he is wrong because he is wrong. What a great debate that was.LOL