The Public Accounts Committee happy slap HMRC for the lolz

The Public Accounts Committee, a nakedly unpolitical committee and also the highest court in the land, has reported that HMRC do not include tax avoidance in their estimate of the tax gap:

HMRC’s calculation of the tax gap does not include an assessment of the amount of tax lost through tax avoidance, therefore it represents only a fraction of the amount that the public might expect to be payable.

Sure, HMRC say they’ve included about £5bn of tax avoidance in their estimate. So neoliberal pedants might say that the PAC is completely wrong yet again. But that is just neoliberal pedantry. Maybe even sophistry.

The PAC’s point couldn’t be clearer. Or more correct.

HMRC’s tax gap does not include estimates of tax lost because tax legislation isn’t what I think it should be.

So HMRC doesn’t consider that claiming capital allowances is tax avoidance.

Margaret Hodges does (because civil society considers it to be tax avoidance (ie because I consider it to be tax avoidance).

HMRC doesn’t consider that claiming any reliefs as intended and foreseen by Parliament is tax avoidance.

Margaret Hodges does (because civil society considers it to be tax avoidance (ie because I consider it to be tax avoidance).

HMRC doesn’t consider that paying an arms length price for intra group goods and services are tax avoidance.

Margaret Hodges does (because civil society considers it to be tax avoidance (ie because I consider it to be tax avoidance).

In other words, the PAC considers what Margaret Hodge considers to be tax avoidance is tax avoidance and Margaret Hodge considers what civil society considers to be tax avoidance is tax avoidance and she only knows what civil society considers to be tax avoidance because I tell her. So the PAC is definitely correct in this instance to endorse my measure of tax avoidance instead.

My estimate of tax avoidance tells us how much extra tax the UK would receive if it were to completely change the tax rules to what I think they ought to be without businesses fleeing the country for fear of The State of Courage that is necessary to enforce those rules.

I am glad to see the PAC produce a report that is similar in quality to my work.

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5 thoughts on “The Public Accounts Committee happy slap HMRC for the lolz

  1. I think Murphy it needs to be made clear for the benefit of certain far right shit-stirrers that the type of practices engaged in by Margaret Hodge in relation to her interest in the company Stemcor, Michael Meacher in respect of his vast rented property portfolio, the Miliband family on their inheritances and your good self and your wife using an LLP and various other tax reliefs are emphatically not tax avoidance as each of you use only the reliefs specifically allowed by Parliament.

    All of this is wholly above board and does not contribute to the £500 BN tax gap you indentify which relates to things such as claims by neo-liberals and Tories for tax relief on their pension contributions – a wholly artificial paper chase that HMRC deliberately fail to pursue, due to corporate capture.

    • I have been quite clear on this matter

      None of those things are tax avoidance because they are clearly intended by Parliament

      On the other hand, use of arms length transfer pricing by multinationals is obviously not intended by Parliament

  2. Obviously, there is nothing more that anyone (mortal, at least) can add to this remarkable (and cogent) work by Murphy.

    On a side note, the suggestion that PAC is the “highest court in the land” is intriguing and must be patently true. This is, clearly, plain to see by all members of civil, and polite, society. Given this pronouncement by Murphy, it is already documented – arguing merely shows the person as an ill-informed fatuous neo-liberal pedantic sophist (apologies for the redundancy), should we now demand that all courts (tax, criminal, civil, family, etc) perform their duty and report (especially in the areas of guidance and direction) to the very Rt Hon Madame Hodges? To do otherwise would be a clear case of social justice avoidance.

    We can not sit idly by and let a social justice gap to develop!

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