PCS has now published the detailed workings behind my new tax gap report.
The full report, for those with time on their hands, is here.
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Was the report peer-reviewed?
In the sense you are no doubt talking about, no
So it does not as a result conform to the hegemonic viewpoint much peer review demands
But then, unlike you, I believe in a free market for cement and the right of all to participate unhindered by artificial barriers to entry
Well there is one sense that Richard’s work is peer reviewed, in that I hear it receives massive plaudits from within HMRC where it is widely circulated. Not of course from Excom or the corrupt beneficiaries of the revolving door between the top of HMRC and the top of the tax avoidance profession, but from the investigators actually doing the work, who can testify that Richard is telling it as it is.
Thanks
I guess PCS would not ask me back if this wasn’t the case
HMRC should note
“Not of course from Excom or the corrupt beneficiaries of the revolving door between the top of HMRC and the top of the tax avoidance profession”
That would be too much to expect, because they live in La La Land where the “swan continues to glide effortlessly over the lake while all the furious paddling goes on underneath the surface, out of sight”.
For the elite, neo-liberalism has an almost “Victorian twist” to it; except those that should be “seen and not heard” are not children, but vast number of workers and SME’s up and down the country that are supporting the corrupt “establishment”.
Does anyone actually review your reports prior to publication, peer or not? I presume you read it through before publication, but do you get anyone (even a non-tax person perhaps) to sense check it before it goes to the printers? It’s a genuine question BTW.
Yea, of course
This was read by several well informed reviewers
But not peer reviewers in an academic sense
Richard
You’ve included as part of your ‘tax gap’ amounts that would be paid if people who have arranged their tax affairs perfectly legally had arranged their tax affairs in a different way that resulted in more tax being due.
How about National insurance too? I mean, if you operated through a company rather than an LLP, your income would be subject to employers’ National Insurance. Has the amount you have quite legally avoided paying been included in the tax gap? If not, why not?
The only occasion where this happens is, perhaps, in the estimate for tax avoided by payment of dividends out of small limits companies – a tax avoidance priority for HMRC until 2008 – and so included here
Otherwise you are talking complete nonsense
The ‘nonsense’ being talked is yours.
You say you include as part of the tax gap dividends paid by a company which would otherwise incur employers’ NI if paid as salary but exclude partnership profits which would incur employers’ NI if paid as salary.
The only difference being that your income is in the latter catagory.
Although of course it was in the former catagory formerly.
I pay all the NIC I can pay on my earnings
Very clearly dividends are structured to avoid NIC
You are talking complete nonsense
If this is all you can contribute to debate please don’t bother again
Even employers NICs? Isn’t the reason you use an LLP to avoid that?
There is no employer’s NI in an LLP as the partners are self employed
It’s not hard to follow is it?
And that is precisely what the law intended so there can be no tax avoidance because complying with the express will of parliament can never be avoidance
Richard,
I don’t wish to waste your time, and Andrew’s attitude is clearly objectionable (if you wanted more money, I’m sure there are numerous neo-liberal companies who would pay you to do nothing, and I mean to do and say absolutely nothing!)
However, could you clarify the difference between partnership profits and company dividends in relation to NI?
It’s these tiny and probably meaningless points that allow the 1% to avoid the big issue.
As you say, tax cheats have stolen 120 billion (as conveniently ignored by Andrew)
It is intended that labour reward be extracted from a company by salary with NIC paid. Directors and other staff of companies are employees
Paying dividends to avoid NI on what is effectively labour reward was not intended by the law though HMRC gave never worked out how to stop it
The self employed, partners and LLP members are all self employed. They pay NI as self employed people – usually much more than company directors as a result
This is as the law intends
So dividends in lieu of salary is avoidance (although I readily admit I once did not consider this to be the case – like most in the accountancy profession) and LLP earnings cannot be avoidance as the law provides for NI on them, which I confirm I pay
Thank you for replying, and so clearly and succinctly (not sure if you have any other settings!)
One additional question if I may:
Aren’t dividends a “reward” for ownership, rather than labour?
But when there is no reward for labour or almost none at all the nature of the reward being paid is being misrepresented
That is the basis of the avoidance
I still think this leaves grey areas for the Worstalls of this world to exploit.
If the non-payment of NI on dividends is legal, isn’t this also the express will of parliament?
Do you take all money received by your LLP as salary, to avoid avoiding NI?
If I buy shares (using earned and taxed income) and receive dividends, am I avoiding tax? I’m talking about a small holding here.
Excuse the questions, but “the enemy” love to use this sort of thing as a smoke screen.
It would be so much easier if the government received all income, and then calculated and forwarded the free-of-tax part. No chance of avoidance then.
Parliament never intended that labour reward from companies be taken as dividends
Parliament did intend that the self employed pay self employed NIC (it’s what it says on the tin)
I use an LLP because I have been self employed for 30 years and would rather it no other way – the strictures of any form of employment structure do not suit me
I used an LLP because professional indemnity insurers said I had to differentiate this from work as a chartered accountant – which I still do some of
The LLP was the best professional ring fence available
It was a commercial choice
And no of course receiving a dividend on savings is not tax avoidance
Any more than interest on a bank account is
I am really nit sure HMG receiving all income would work….
“And that is precisely what the law intended so there can be no tax avoidance because complying with the express will of parliament can never be avoidance”
So companies which use offshore finance companies under the new CFC rules to pay tax at 5% (or whatever the rate now is) are being tax compliant, and are not tax avoiding? Can you confirm that?
That would be the case if the EU and OECD agreed
It is not clear they do
They think the UK is facilitating abuse
So you are wrong
So the intention of Parliament is irrelevant then? You have spent many posts above talking about how avoidance is determined by what the express will of Parliament is. Now you are saying that avoidance is determined by whether or not the EU and OECD.
It can’t be determined by both. Your position is untenable.
Have you not noticed the importance of international law?
Of course it has to be considered in this question – it would be ludicrous to think otherwise
The only person who looks stupid here is you – arguing from the position of the proverbial UKIP tax avoider on a pinhead
Please do not waste my time again
should be “whether or not the EU and OECD agree”.
I see how this goes.
People ask questions you are uncomfortable in answering and you just delete them.
Cowardly hypocritical humbug on your part.
If you wrote the same letter five times to a paper would they publish more than the first?
No
So why should I, when I replied to the first
Now please go and start your own blog
“Have you not noticed the importance of international law?
Of course it has to be considered in this question — it would be ludicrous to think otherwise”
Companies which obey the letter and spirit of the law cannot be accused of tax avoidance. If it turns out that the law that Parliament passed was in contrarv to EU law then the ECJ’s quarrel will properly be with the UK Parliament. The ECJ would have no recourse in law to the companies who obeyed the law which Parliament passed; those companies could not be issued with retospective tax demands. Therefore it is quite wrong to accuse the companies who follow the law in this way as being involved in tax avoidance. This is especially the case as the relevant laws have not even been declared illegal by the EU, so this is pure whatiffery on your part.
I do wonder how many times I have to make the point that companies are noted as examples to highlight that the law is wrong and in need of rform – hence all the effort I and others have put into the BEPS process
But despite this you carry on missing the point