Ritchie, referring to a recent case where HMRC has closed a fairly blatant example of abusive tax avoidance, says:

So we have large businesses putting hundreds of millions of tax at risk, we’re told.

And there’s an insignificant tax gap?

Sorry: it does not stack. The willing is present; the advisers are present and the companies are willing to commit cash to abuse. The tax gap is very real indeed. But until today this was all part of the ‘legitimate’ allowances and reliefs I’m meant to ignore when preparing my calculations.

Sorry. I don’t buy that. And no one should.

This is silly. No-one, not even the most strident tax advocate or the maddest libertarian, would argue that the best estimate of the tax gap is zero. So finding an egregious case doesn't prove Ritchie's estimate of tax avoidance in any way.

This is one of the great logical fallacies - using information that is unrelated to the hypothesis in an attempt to prove it. Of course tax avoidance is greater than zero. So we should be celebrating the closing of this loophole instead of drawing daft conclusions from it.

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Filed under: Taxation with tags hmrc, idiots, logic, richard murphy, tax avoidance