Christie Malry's own double-entry
Posted by Christie Malry on May 21, 2013 at 11:47 am
The subject of tax and ethics has never been more important.
And where is the leading accounting institute in the UK in this debate? Nowhere to be seen, at all.
Er, right here. Nearly 10 months ago.
You utter muppet.
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Posted by Christie Malry on May 10, 2013 at 12:23 am
Posted by Christie Malry on April 26, 2013 at 7:31 am
HM Revenue & Customs HMRC appears to be fighting a battle it cannot win in tackling tax avoidance. Companies can devote considerable resource to ensure that they minimise their tax liability. There is a large market for advising companies on how to take advantage of international tax law, and on the tax implications of different global structures. The four firms employ nearly 9,000 people and earn £2 billion from their tax work in the UK, and earn around $25 billion from this work globally. HMRC has far fewer resources. In the area of transfer pricing alone there are four times as many staff working for the four firms than for HMRC.
Well, that's your problem right there. The giants of the accountancy profession, the Big 4, only earn £2 billion annually from this industry.
Whereas HMRC regularly rakes in some £500 billion from the tax system.
HMRC may have 'far fewer resources' than the Big 4. But it's not for lack of money. The money's right there, should government wish to spend it.
And shouldn't we be celebrating the 9,000 people the Big 4 hire in this area? Aren't jobs supposed to be A Good Thing?
Posted by Christie Malry on April 18, 2013 at 9:37 pm
Ritchie says the following on nPower and their alleged avoidance:
So the question is, and 38 Degrees are right to ask it, is whether this is ethical? My suggestion is that it is not. If tax compliance is paying the right amount of tax but no more in the right place at the right time then I think the structure used means that tax is paid in the wrong place – i.e. in Germany and not here
To which someone rightly points out that the corporation tax rate in Germany is higher than in the UK. It's a strange sort of avoidance that means you transfer profits from a low tax jurisdiction to a higher one.
Headline rates and effective rates may not be the same
Germany has a big problem with effective rates
The Germans can't tax something as vanilla as interest income? Really, Ritchie?
Really, is this the best you can do?
Posted by Christie Malry on April 16, 2013 at 6:54 am
In a somewhat triumphant post, Ritchie proclaims:
So let’s be unambiguous: the argument that tax avoidance is legal has now been cast aside, forever. That is no longer true. And for those in doubt, a case that in 2007 see here, page 9 said needed to be over-turned for good has also been cast aside by this GAAR Guidance
So let’s be clear: the argument that loopholes are there to be exploited is now dead. And the rule in Partington v The Attorney General of 1869 is no longer UK law.
Actually it means that Ritchie's bold claims about tax avoidance are found wanting. He is going to try to argue like this:
It all rather hinges on point 1. Yet, most taxpayers are already compliant within the law and within the Guidance, so this slight change in emphasis is going to have only a limited impact.
He's drawn the wrong conclusion from the wording. What it means is that great swathes of what he has previously claimed to be tax avoidance have, today, been categorically defined as tax compliance by the Guidance. The Guidance makes it clear that it's only the most extreme, unintended distortions of the law that are to be considered avoidance. Which is what sensible people have been saying all along.
Posted by Christie Malry on April 9, 2013 at 8:57 am
Worstall has a pretty good piece about HBOS here. You should go read it. He's right when he says that banks could only provision for actual losses, not potential ones. But this wasn't a Brown invention. It was always this way under UK GAAP. It's a common theme among the lazy and badly informed that UK GAAP would have prevented the banking crisis, by forcing banks to provide for the losses earlier. This is a myth. UK GAAP always required actual provisioning; expected provisioning was forbidden. What's the distinction? Forget debts, for a moment. Imagine a farmer with a warehouse full of crates of apples. Some of those apples will go bad before he can get them to market. A specific provision is a provision against a particular crate. The farmer knows that specific crate is bad, so he's written it off. A general provision is different. The farmer, based on his experience knows that by this time of year, in the current weather conditions, with his knowledge of insect levels, etc, a certain number of crates will already have gone bad. He just doesn't know which ones, because he hasn't inspected each one. But he knows that if he did inspect them, a certain proportion would already have gone off. An expected provision is also based on his experience. He knows that, between now and market time, a certain proportion will go bad, including some that are still fine now. So he provides for the lot now. The expected loss approach breaks with accounting tradition by allowing preparers to mark down assets now for events that haven't yet happened. And , inevitably, this will make it easier to manage earnings, both up and down. It might have been possible, in the slack days of the 80s, to make a big general provision and for few people to care. But now we do care, and we wouldn't permit expected losses under UK GAAP, no matter what the accounting polemicists would have you believe.
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Posted by Christie Malry on March 11, 2013 at 9:29 pm
Perhaps [Dave Hartnett would] also like to explain why he assumes the user of accounts aren’table to appraise local incentives? Are we not as clever as him?
When Ritchie himself can't even calculate tax properly, what hope is there for lesser mortals?
I blogged about the fundamental problems with country by country reporting some time ago. Those problems still remain. It's not a case of being clever; CBCR simply doesn't provide the information needed to make an informed opinion.
In the meantime, we can always rely upon Ritchie to make an uninformed one.
Posted by Christie Malry on March 1, 2013 at 11:08 pm
Today's Ritchie:
A ComRes survey about public perceptions around tax avoidance, commissioned by Christian Aid, found a third (34 per cent) of Britons say that they are currently boycotting the products or services of a company because it does not pay its fair share of tax in the UK. Almost half (45 per cent) say they are considering a boycott.
Sure, people say they're currently boycotting the products or services of a company because of tax avoidance. But are they actually boycotting them? And, if so, is it because of tax avoidance or does it happen to be a company they don't much care for anyway?
This poll is next to useless unless we can see what people are actually doing, rather than what they tell some twat with a clipboard.
Posted by Christie Malry on February 28, 2013 at 12:54 pm
So the European Parliament and Council have done a deal that will require banks to disclose country by country reporting information. You might be surprised to learn that I welcome this news.
Not because it will aid the fight against tax avoidance. But because it will expose the frauds who campaign on tax.
Ritchie tells us that country by country reporting will allow us to work out where tax avoidance is taking place. And, from 2015, he's going to have to put his money where his mouth is, based on real life disclosures. Yep, the man who can't even calculate dividend taxation properly, seems to believe he can accurately detect tax avoidance.
As Tim points out, he can't even remember that someone else invented it.
Bring your own popcorn, because this is going to be very amusing.
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Posted by Christie Malry on February 20, 2013 at 10:53 pm
Accountancy Age reports that HMRC has issued only seven fines in the last five years to tax avoidance scheme promoters for failure to report properly under DOTAS.
In the article, Bloomsbury Tax suggests that this is evidence that the problem of tax avoidance is overblown.
Elsewhere, Ritchie says that HMRC's low use of some of its powers demonstrates that HMRC isn't serious about tackling avoidance.
And, indeed, these facts are consistent with both hypotheses. So who is right?
OK, it's hard to resist putting the boot into Ritchie. But I don't think lots and lots of litigation would be evidence of a healthy, well-functioning tax system, do you?
