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Is Nye Bevan right?

Published by Anonymous (not verified) on Sat, 17/10/2020 - 6:46am in

So the Australia type deal that Britain will flourish under, according to Johnson, is a trade deal that, in fact, Australia is trying to actually improve in the already existing trade talks with the EU, where both sides have agreed that: The discussions confirmed a shared commitment to rules-based trade as well as to helping... Read more

The Public Accounts Committee do not believe HMRC’s tax gap data, as I’ve been saying for years

Published by Anonymous (not verified) on Fri, 16/10/2020 - 4:53pm in

The Public Accounts Committee has published a report this morning on HM Revenue & Customs’ approach to estimating the U.K. tax gap. It is pretty damning. The kindest possible interpretation of the PAC’s opinion is that they are not convinced that HMRC has got the tax gap estimate anywhere near right.

The biggest criticism made is that HMRC has not, after all the time it has been preparing tax gaps, made enough progress with its statistical basis for doing so. As a result much of the methodology is still described as ‘experimental’, with at least 20% of the tax gap being subject to such methods. As the FT once out it, HMRC might as well say that they made these parts up.

Another 40% (approximately, because everything about this estimate is approximate) is so uncertain as to its basis of calculation that HMRC can provide no estimate of the confidence limits on its calculation.

And, on those parts of the tax gap where confidence limits can be given (inevitably, the easier bits)  those limits are as big as some of the reported gaps. In other words, the confidence that should be placed in the data is low.

All this is before the fundamental error in methodology in HMRC’s tax gap approach that I have already noted this morning that emerged from the hearings on these issues, but which I have been highlighting for years, which the PAC chose not to emphasise is taken into account. This is the result of HMRC using a US methodology that assumes all taxpayers are required to submit tax returns when in the U.K. only about one third of taxpayers do so. This, I believe dramatically underestimates the tax gap.

The errors made by HMRC also include, as the PAC note, HMRC’s failure to include tax avoidance that is abusive but about which they feel there is little they can do. This includes most of the abuse of international tax by large companies and much of the tax planning of the wealthy. One could, of course, accuse HMRC of replicating much of the class bias already apparent in their treatment of tax abusers in their tax gap estimates as a result, because it is undoubtedly true in the U.K. that only the ‘little people’ get prosecuted for their tax abuse. It could also simply be said that this systemically understates the tax gap and had always done so, again as I have long emphasised.

The committee also notes another issue to which I have given attention in recent years, which is the ‘tax policy’ gap, which is the amount of tax is not collected because changes to tax law are not made to ensure tax policy is delivered, leaving loopholes to be exploited by those inclined to do so.  They are right to make this point, and we are entitled to ask why such bias (which always favours the wealthy) is allowed to persist.

But perhaps the greatest criticism of HMRC made by the committee is that HMRC should not have continually referred to their tax gap estimates as if they were right when there is no evidence to support that claim. That is particularly damning.

The message is abundantly clear. The PAC do not believe HMRC, and they are pretty sure that the tax gap is a lot bigger than HMRC say it is. Join the club, I say: I’ve been saying this ever since HMRC published their absurd data.

The tax gap: why HMRC has always seriously underestimated it

Published by Anonymous (not verified) on Fri, 16/10/2020 - 4:14pm in

The Public Accounts Committee has published a new report on HM Revenue and Custom’s tax gap estimates this morning. As I will note  in a separate post, they are deeply critical, but not wholly for the same reasons that I am.

One issue that the PAC did not pick up on was that HMRC has admitted that their whole model for estimating the tax gap is flawed. I call that a big deal. I address the issue in this video, made before I saw the PAC report:

In summary, the case is a simple one, and one I have long made. HMRC has used a US model for estimating the tax gap. So, they sample some tax returns and find errors and then extrapolate that error rate across all the tax returns that they get.

The model works in the USA because everyone has to submit a tax return.

Only about a third of tax payers in the U.K. have to submit tax returns. And HMRC make the absurd assumption that those who do not submit tax returns - whether they are individuals, or the very large number (almost the majority) of companies that do not do so - make no mistakes in their returns as the have no income to declare.

That assumption makes no sense at all. In fact, not requiring returns is    a mechanism perfectly designed to help the evader and is bound to increase the tax gap.

The assumption HMRC has used by adopting a US model does not work then.

And that is why I have always suggested that there is very strong evidence that HMRC has substantially under-estimated the tax gap. I think it may be three times their own estimate, which is implausibly small and so persistently stated that its credibility is very low.

Why do we put up with limited liability, and how should we manage its consequences?

Published by Anonymous (not verified) on Thu, 15/10/2020 - 5:08pm in

One of the issues I discussed in the question and answer session after the debate I took part in last night at the Tax Coop meeting was the abuse of limited liability companies, most especially in the U.K., but which we permit to be exported to other countries using companies incorporated here. It’s a big problem, which makes this morning’s video especially relevant. Why do we put up with limited liability, and how should we manage its consequences?

Trump Built His Swamp In A Marsh Of Legalized Corruption

Published by Anonymous (not verified) on Thu, 15/10/2020 - 12:01am in

Trump’s corruption illustrates the kleptocratic system created by a judiciary that would become even worse with Amy Barrett on the Supreme Court. Continue reading

The post Trump Built His Swamp In A Marsh Of Legalized Corruption appeared first on

Fatima – dancing in cyber

Published by Anonymous (not verified) on Wed, 14/10/2020 - 6:42am in

This was some of the government advice on retraining: And this (apologies for the language) a spoof: and this, a wonderful poem, which I’m sure we can all appreciate: Steve Pottinger tweets here.... Read more

Lawyers understand that this country is corrupt. So do medics. It’s time other professions did as well.

Published by Anonymous (not verified) on Mon, 12/10/2020 - 6:23pm in

I have mentioned corruption this morning. If you are interested in the video linked in this piece from the International Bar Association is well worth watching.

The video cannot be embedded, so you have to go here to get it.

Medics, I know, share this view that this country has now been corrupted.

I am not at all sure that the political left, or Labour, does.

And nor have I seen it said by accountants or economists. I wish I knew why not.

I can accuse the government of being corrupt without fear now, because the evidence supports my case. And that’s profoundly worrying.

Published by Anonymous (not verified) on Mon, 12/10/2020 - 6:16pm in

I did some tweets on the theme of corruption over the weekend:

I was not alone. This is a powerful thread. I do not know of every fact is true. I have not checked them. But there is a theme to the questions that they raise that does demand answers:

And then we just have to look to the chummery around Johnson:

There is a whiff around all this that is deeply, and even profoundly, unpleasant.

Never before have I felt that matters are so out of control, so corrupt, and so far down a slippery slope.

But that's where they are.


Is rebellion imminent?

Published by Anonymous (not verified) on Sat, 10/10/2020 - 7:55am in

This moving piece from Channel 4 news and from a real small employer (rather than a grasping rentier capitalist) correctly explains why so many are completely adrift in the government’s occasional, random and unscientific lockdowns. For sure the science is uncertain – but the money creation to ensure both the lady in the interview and... Read more

The psychopathy of Brexit

Published by Anonymous (not verified) on Thu, 08/10/2020 - 6:14pm in

Allegedly, according to Bloomberg, unless there is a trade deal within a week, Brexit trade talks are likely to flounder to no deal. A very bleak prospect. This outcome would, I suggest, be the most monumental act of self harm, perhaps ever, in British history. I fear that Rees Mogg’s father – remarkably, a former... Read more