Ritchie ponders a little flutter then chickens out:

I wonder what the odds of Osborne going in a reshuffle are? I’d think they’re getting to be one to look at for the punters out there. Not that I am. So please don’t ask me to put up a tenner. I don’t.

We already know that Ritchie tends to run away from the opportunity to benefit from the fruits of his wisdom by putting his money where his mouth is.  He was at it again last week regarding his claim that unemployment was about to soar past 4m.

He's wise not to wonder too much about the odds on Osborne going.  Although not the exact bet he's referring to, the odds on Osborne being the next Cabinet member to go in a reshuffle are currently 40-1 at Paddy Power or 50-1 at Ladbrokes.  While thinking Osborne is an odious little tit, I can't help but admire his strategic vision. It was Osborne, you'll remember, who single-handedly stared down the threat of an early Gordon Brown election in 2007, thereby setting the stage for the death of New Labour.  Any tactical weakness is likely to be only temporary - Osborne has shown he'll take the long-shot strategic gain even if it means a short-term tactical loss.

I think it's much more likely that Osborne will still be in post at the next election. I would be prepared to put up a tenner. But only if it's Ritchie's money at play.

Filed under: Other blogs, Politics with tags george osborne, gordon brown, ladbrokes, paddy power, richard murphy
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Remember the non-doms, who were living it large in this country?  They got to shelter all their overseas earnings from the UK taxman by paying tax only on income earned in or remitted to the UK. So rich folk like Lord Ashcroft could live in the UK but avoid paying tax on their worldwide earnings, something that ordinary Brits would be unable to do.

Sensing trouble, and egged on by overzealous tax campaigners, the government decided to change the regime for non-doms. Instead of getting the remittance basis for nothing, they would need to opt in to it. Broadly speaking, it would cost £30,000 a year to opt in. If you didn't opt in, then you would pay tax on your worldwide earnings just like any domiciled UK resident.  These proposals built on earlier Tory plans for a £25,000 annual charge.

Critics of the proposals said that non-doms don't have to live in the UK, they merely choose to.  They would probably respond to the increased cost by moving to another country, taking precious tax payments with them.  But this was pooh-poohed by the experts.  Richard Murphy (for it is he) rubbished the claims.  The £25,000 plan would, in his view, raise an extra £2bn annually for the Treasury.  Surveys suggested that maybe people wouldn't leave, at least no more than they do so already anyway. Later, Ritchie got even more strident, stating emphatically that they just won't go.

So, what actually has happened since the law was introduced?

According to the Treasury figures, in response to a Freedom of Information request, around 16,000, or 11.5% of non-doms have left the UK since the introduction of the non-dom tax, the Telegraph reported.

Non-doms pay £4bn in income tax, according to Treasury estimates, and another £3bn in other taxes such as capital gains, VAT and stamp duty, Damian Reece wrote in a column.

Reece, citing Inland Revenue figures that 11.5% of non-doms left the UK in 2008/09, estimates that this has cost the government about £800m in lost taxes.

The latest Freedom of Information figures show that the non-dom levy was "a dubious idea at best, as far as our public finances were concerned", Reece adds.

Filed under: Taxation with tags accountancy age, domicile, hm treasury, idiots, richard murphy, telegraph
45862 Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2011%2F01%2Fhell-no-they-wont-go%2FHell+no%2C+they+won%27t+go%212011-01-23+16%3A05%3A04Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D4586

Ritchie is very taken with the following quote from Simon Jenkins in the Guardian:

Tories have always liked facts – dates, places, weights and measures — because they brook no argument from sceptics and leftwingers . They are “academic”, intellectual authority on stilts. But history's facts are deliciously dangerous. Set them going and they race to conclusions. That is why a history lesson for ministers might be a lesson of advantage to us all.

Unfortunately, he seems to have misunderstood the message. Jenkins is saying that facts are important, so it's vital that Tories (and, for that matter, Labour) learn their real lessons instead of drawing glib, inappropriate conclusions.

Compare this to Ritchie's MO, where he treats facts as a very unwelcome inconvenience. Instead of engaging with critics of his arguments, he ignores them. Hence, he continues to parrot his nonsense estimates for tax avoidance in the UK, even while they have been comprehensively discredited.

He would do well to remember the words of his economics hero, John Maynard Keynes:

When the facts change, I change my mind. What do you do, sir?

Written on my Android mobile phone. Article may be edited later.

Filed under: Current issues, Other blogs with tags facts, guardian, idiots, john maynard keynes, richard murphy, simon jenkins, truth
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From the must-read Daily Mail

He claims his stalking skills are so honed that he can creep up quietly and touch a deer - although he admits he used to do the same with foxes until one bit him.

Filed under: Entertainment with tags daily mail, deer, fox, ninja, quote of the day
4578No Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2011%2F01%2Fquote-of-the-day-the-dangers-of-being-a-ninja-in-the-modern-era%2FQuote+of+the+day%3A+the+dangers+of+being+a+ninja+in+the+modern+era2011-01-19+18%3A58%3A39Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D4578

An interesting tweet from Accountancy Age, who spent yesterday afternoon at the House of Lords debate on audit:

Myners: Professional adviser should be appointed to guide the audit committee and chair on complex risk and technical matters #lordsaudit

Myners, according to his Wikipedia article at least, has been Chairman of Guardian Media Group, Marks and Spencer and Powergen. So, he really ought to be more up to speed with UK corporate governance. Section B of the UK Corporate Governance Code, issued by the Financial Reporting Council, says:

The board and its committees should have the appropriate balance of skills, experience, independence and knowledge of the company to enable them to discharge their respective duties and responsibilities effectively.

...

All directors should receive induction on joining the board and should regularly update and refresh their skills and knowledge.

...

The board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors.

So, all audit committees of UK listed companies should already be determining what skills they need. If they identify any skills gaps they must take steps to rectify the shortfall.

There's simply no need for any change in regulation to make this work, just a bit of enforcement of what's already there.

Filed under: Corporate governance, Other blogs, Politics with tags accountancy age, frc, house of lords, lord myners
45731 Comment »http%3A%2F%2Fwww.fcablog.org.uk%2F2011%2F01%2Flord-myners-at-the-house-of-lords-audit-enquiry%2FLord+Myners+at+the+House+of+Lords+audit+enquiry+2011-01-19+09%3A34%3A47Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D4573

The perceived wisdom of the day is that auditors simply weren't sceptical enough about the financial health of banks. And, as a result, that's why they failed.

I used to be an auditor. So, I will draw upon all my reserves of scepticism and opine that this "scepticism" argument is a complete load of bollocks. Firstly, policy makers, ministers, politicians, dunderheaded journalists, and overblown bloggers like Ritchie and Frannie don't have the faintest idea about what auditors are required to do by law and regulation. Nor do they know what auditors actually did do in practice. Nor do they really understand very much about banks and what they were doing in the run-up to the crisis. So they are in no position at all to make any statement about the level of scepticism exercised by or even required of auditors.

I am being sceptical. Which, according to the perceived wisdom must be the right thing to do. It's time that the profession hit back against the lie that auditor scepticism was the problem. They need to get sceptical about scepticism. The motley gang of commentators, looking for someone to blame, should welcome it, shouldn't they?

Written on my Android mobile phone. Article may be edited later.

Filed under: Auditing, Politics with tags francine mckenna, frc, fsa, idiots, richard murphy, scepticism
4572No Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2011%2F01%2Fyou-cannot-refute-this-argument%2FYou+cannot+refute+this+argument+2011-01-18+10%3A00%3A36Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F2011%2F01%2Fyou-cannot-refute-this-argument%2F

Lordy be.  Prem Sikka's back in the media, and his latest idea, co-authored with Austin Mitchell, is an absolute stinker:

According to the Sunday Times Rich List, the collective wealth of the 1,000 richest people in the United Kingdom rose to £335.5 billion in 2010. This is an increase of 29.9 per cent, or £77.265 billion, since 2009. Despite the deepening recession, this is the biggest-ever annual increase in the wealth of our elite. Fifty-three of the richest 1,000 are billionaires. In 1997, when Labour came to office, the collective wealth of the richest 1,000 stood at £98.99 billion. No other group has received such a massive boost in its wealth. But even if they have all the clothes, mansions, cars, yachts and jets they want, they still can’t spend it all. They came into this world empty-handed. They’ll exit in exactly the same way, but leave behind impoverished citizens and employees when they could easily give 25 per cent, or some £84 billion of their wealth away without hurting the quality of their life. This redistribution would reduce and probably eliminate the need for draconian cuts.

Here's another idea.  Contrary to what the lefties would have you believe, the problem with the deficit isn't caused by a drop in income, it's thanks to Labour's uncontrolled obsession with spending taxpayers' money.  So we should cut state expenditure dramatically.  In order to do this most efficiently, we should quietly murder the 1,000 most needy citizens in order to save a small fortune on their benefit claims.  It's only 1,000 people, so it really won't affect the vast majority of society.  This would reduce and probably eliminate the need for draconian cuts.  And, in any case, we could always keep on killing until the books balance.

OK, so this isn't a serious suggestion.  It's clearly an abhorrent one.  But equally, so is Sikka's.  It's outrageous to steal private property from people merely because the ruling government wasn't able to run its economy properly.  There's no moral basis for the 25% figure. It's just a handy plug that makes the numbers sort of balance. And he overlooks the fact that stealing 25% from the richest billionaires will plug the shortfall only for one year, after which we'll need dramatic tax increases again.  Or perhaps we can steal another 25%? Presuming that they don't flee Britain forever. And who could blame them?

Sikka's articles are dismal enough at the best of times. But this one is totally rancid. It's disingenuous to attempt to perpetuate the idea that there is any sort of pain-free solution to Labour's financial mismanagement. The only way out is to cut spending and raise taxes, while letting inflation take a bit of the pain.  Sikka's solution is an appalling lie. We should expect much better from a professor at a UK university.

Filed under: Economics, Other blogs, Politics with tags austin mitchell, deficit, idiots, labour, prem sikka, public sector
45683 Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2011%2F01%2Fthe-eternal-and-unrivalled-idiocy-of-prem-sikka%2FThe+eternal+and+unrivalled+idiocy+of+Prem+Sikka2011-01-17+09%3A14%3A04Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D4568

So, Eric Illsley will be standing down as an MP, after being caught cheating on his expenses.  But shouldn't he also be turning himself in over his tax affairs?  His argument was that the lax regime existed in order to supplement the income of poor MPs.

It's a principle that all untaxed sources of income should be reported to HMRC, especially if HMRC isn't aware of them. Typically HMRC then recovers the tax on this source of income through the tax code.

So, if he really believed that the expenses were really income, he should have reported the "income" to HMRC.  Because he didn't do so, he's a tax cheat.

It's all very well for Labour MPs to thunder on about corporate and personal tax avoidance.  Are their own houses in order?

Filed under: Politics, Taxation with tags eric illsley, hmrc, mps' expenses, tax evasion
45652 Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2011%2F01%2Feric-illsley-tax-cheat%2FEric+Illsley%2C+tax+cheat2011-01-17+08%3A26%3A04Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D4565

Kerry McCarthy is an MP who is not averse to a bit of controversy. She is, you'll recall, the MP that almost ended up in the clink after in a moment of bimbo madness, revealed the results of her seat's postal votes before the election had closed. Rather fortunately for her, she ended up with a caution despite this flagrant breach of electoral law.

So it's no surprise she's causing ripples again.  This time she's suggesting that in order to catch the murderer of Jo Yeates every single man in Bristol should be forced to give a DNA sample.  She claims that most men would understand why they're being asked to do this.

I'm frankly amazed that any elected representative of the people could be so profoundly out of touch and chronically stupid. Giving up your DNA into the state database is not trivial, not least because the state is so reluctant to dispose of it when it no longer needs it. Who knows what the state may decide to do with it later. It's no surprise that many people, contrary to what McCarthy says, are disgusted by her proposal.

We can liken her proposal to the establishment of the Independent Parliamentary Standards Authority.  Given the evidence provided by The Telegraph that so many MPs were prone to embellishing their expense claims in their own favour, what reasonable person could argue against a strong regime that seeks proper evidence that amounts are due before any payment is made?  Well, MPs seem to have found a few causes of complaint.  One, after his (presumably fraudulent) claim was rejected said that he objected to being "treated like a criminal".  IPSA bosses had to warn MPs not to bully their staff.

Yet, remembering McCarthy's wisdom, can't our politicians realise that "most MPs would understand why they're being asked to do this"? That it's entirely right in her view that the many should suffer just so that the few who break the law can be brought to justice?

McCarthy, who has a low expenses record to date, might feel aggrieved at the IPSA regime.  So is it too much to expect her to understand why law-abiding, self-respecting men might not want to have their DNA held for eternity just to prove to the state that they really do not need to be considered murder suspects?

Filed under: Current issues, Politics with tags criminal record, dna database, ipsa, jo yeates, kerry mccarthy, mps' expenses, twitter
4559No Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2011%2F01%2Fmass-dna-testing-and-mps-expenses%2FMass+DNA+testing+and+MPs%27+expenses2011-01-10+09%3A03%3A58Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F%3Fp%3D4559

Most people have been horrified at the news of a kindly gentleman, who warned other drivers of a speed trap, being fined in the courts for obstructing the police. Perhaps you have been warned of speed traps in this way before. Maybe you've even helped others.

So imagine some other (made up) scenarios:

A friend of yours works at HMRC. He lends you his USB stick. You find a folder containing a list of names and addresses of suspected tax avoiders that HMRC will be investigating.  Do you ring them up to warn them of the investigation?

Or, perhaps another friend of yours invites you round to his house. He works for the Professional Oversight Board. While he's getting you a drink, you spot a note among his papers outlining the audits of major firms that are due for inspection. Do you take a copy of the list with your mobile and send it to the Big Four?

Now, I may be wrong, but I suspect people would answer emphatically "no" to both. So what is different about speeding drivers that makes us sympathetic to their law breaking compared to tax cheats or bad auditors? 3,000 people die on Britain's roads every year in "accidents", virtually all of which wouldn't happen if drivers followed the Highway Code. Tax avoidance and dodgy auditing, as far as I'm aware, never killed anyone.

Seriously, what's the difference?

Written on my Android mobile phone. Article may be edited later.

Filed under: Ethics, Regulation with tags big four, conceit, driving, hmrc, pob, speeding, tax avoidance
45586 Comments »http%3A%2F%2Fwww.fcablog.org.uk%2F2011%2F01%2Four-conceit-about-speeding-drivers%2FOur+conceit+about+speeding+drivers2011-01-06+10%3A26%3A43Christie+Malryhttp%3A%2F%2Fwww.fcablog.org.uk%2F2011%2F01%2Four-conceit-about-speeding-drivers%2F