What is it with the PAC?

What is it with the PAC?

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Hi all

What is it with Margaret Hodge and the rest of that load of nutters, they do not seem to have the first inkling of a clue about the issues they discuss, tell me why are we paying for these morons to talk bo$$ocks about a subject they have zero knowledge of, apologies for this rant but these are a few items from the latest chapter that got my goat;

  1. They compare experts from Big 4 practices advising HMRC on engineering the workings of tax rules, to criminals being consulted on crime prevention techniques.  In the House of Commons they would be forced to apologise for that sort of thing to each other, and everyone knows politicians are the most greasy, corrupt ba@$ards in the world.  I would want experts here I do not want to see the man on the Clapham omnibus or folk from NGOs advising in this area as they have nothing useful or insightful to say.
  2. They talk about hospitals avoiding VAT on locums by employing them, and drugs by using external pharmacy services.  Why do these idiots want hospitals to pay VAT, a bit more VAT for HM Treasury a few more folk leave in bags instead of taxis.  Maybe that would not be so bad but they are only getting it off themselves anyways.
  3. The tax gap, they ask what the tax gap would be if all the imaginary taxes which relate in no way to reality or the law, no one knows or cares except you Mrs Hodge, please go away and live in your champagne socialist fantasy world.

All right that’s it, gonna take a valium.

Mack

Hi all

What is it with Margaret Hodge and the rest of that load of nutters, they do not seem to have the first inkling of a clue about the issues they discuss, tell me why are we paying for these morons to talk bo$$ocks about a subject they have zero knowledge of, apologies for this rant but these are a few items from the latest chapter that got my goat;

  1. They compare experts from Big 4 practices advising HMRC on engineering the workings of tax rules, to criminals being consulted on crime prevention techniques.  In the House of Commons they would be forced to apologise for that sort of thing to each other, and everyone knows politicians are the most greasy, corrupt ba@$ards in the world.  I would want experts here I do not want to see the man on the Clapham omnibus or folk from NGOs advising in this area as they have nothing useful or insightful to say.
  2. They talk about hospitals avoiding VAT on locums by employing them, and drugs by using external pharmacy services.  Why do these idiots want hospitals to pay VAT, a bit more VAT for HM Treasury a few more folk leave in bags instead of taxis.  Maybe that would not be so bad but they are only getting it off themselves anyways.
  3. The tax gap, they ask what the tax gap would be if all the imaginary taxes which relate in no way to reality or the law, no one knows or cares except you Mrs Hodge, please go away and live in your champagne socialist fantasy world.

All right that’s it, gonna take a valium.

Mack

 

Replies (26)

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By frustratedwithhmrc
31st Oct 2013 08:44

Apparently...

Those who attend the PAC have been told that if they raise the issue of Stemcor then PAC Chair Margaret Hodge will sue.

So she seems to be somewhat touchy about her own particular brand of tax avoidance.

One rule for the elite and another rule for the plebs it would seem.

Hypocracy!

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By ShirleyM
31st Oct 2013 08:58

It's only showcasing ....

... but I do think it is worthwhile. They (mostly) ask the sort of questions that the ordinary tax payer may ask, and I have followed a lot of it with interest, especially when HRMC are 'on the stand'.

As to Margaret Hodge & Stemcor ... what are the odds on finding a politician who isn't a share holder, or part owner of a company involved in aggressive avoidance, etc? If that barred them from asking questions .... then who would be able to ask questions?

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Replying to MurielGNunnally:
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By frustratedwithhmrc
31st Oct 2013 09:08

But she isn't just a shareholder is she Shirley?

ShirleyM wrote:
As to Margaret Hodge & Stemcor ... what are the odds on finding a politician who isn't a share holder, or part owner of a company involved in aggressive avoidance, etc? If that barred them from asking questions .... then who would be able to ask questions?

But that's not really the issue is it? If Margaret Hodge was a shareholder, then she would be no different to the rest of us, but it is that the earnings from Stemcor are specifically protected by a trust that was set-up to avoid tax of which she is a recipient and a substantial sum it is too.

You don't find it hypocritical that someone who benefits from such a structure should be castigating those who attempt to do the same and specifically uses her power as PAC chair to stop the fact of her own tax avoidance being mentioned?

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By ShirleyM
31st Oct 2013 09:13

I plead ignorance @frsutratedwithhmrc

I don't know the full details of her interest/benefits.

I still think that we would struggle to find a politician who wasn't involved in aggressive avoidance, expense fiddling, backhanders, or some other dodgy dealing. Isn't it better that someone asks the questions, rather than no questions being asked at all?

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Replying to airgeadagam:
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By frustratedwithhmrc
31st Oct 2013 09:26

It comes down to grandstanding

ShirleyM wrote:
Isn't it better that someone asks the questions, rather than no questions being asked at all?

Perhaps, but the answer to many of these issues actually lie with parliament itself and I don't hear her criticising the existing legislation that allows such tax avoidance.

Much of what she complains about relates to the EU Single Market, especially with regard to the likes of Amazon using lower taxed jurisdictions such as Ireland to reduce corporation tax, none of which is remitted to HM Treasury.

Its not even as if the companies are 'slipping through the cracks' of existing laws as traditional avoidance is defined, but rather using EU Treaties exactly as they are specified (albeit probably not as intended).

Rather than whining at efficient retailers such as Amazon, she should be lobbying her own government to get the EU Single Market treaty changed so that taxes can't be avoided through such schemes, but that wouldn't look as good on the telly as her grandstanding would it? 

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the sea otter
By memyself-eye
31st Oct 2013 09:32

At the hearing

into the supposed rip off by the big 6 energy companies, one of the idiots on the PAC asked why their profits were so large in absolute terms- not what the return on equity was: nor did he question the assertion that their profits are lower (allegedly) as a percentage of income than those of Tesco. It was fun however watching them tear into the three dozy coppers on the 'plebgate' show! 

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By Duhamel
31st Oct 2013 10:37

Stemcore

My understanding is that it was a trust set up by her father and she has never thought to question it. Whether it actually avoids much tax now is debatable, but the fact that she's never questioned it before is hypocrisy but unsurprising. How her claims are given any weight amazes me, her knowledge of tax can be written on the back of a postage stamp.

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Replying to sammerchant:
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By frustratedwithhmrc
31st Oct 2013 12:17

Her tax avoidance is different to Amazon, Apple and Starbucks

Charlie_T wrote:
My understanding is that it was a trust set up by her father and she has never thought to question it.

As with a lot of the ethical moralising that goes on about tax, the very fact that she can't see the moral equivalence between the tax avoidance that she is a beneficiary of (admittedly it was her father that set it up) and those she accuses in the PAC is irritating.

I expect that you are right, that she doesn't understand how tax works or the difference between tax avoidance and evasion to actually get anywhere meaningful.

Equally, the fact that most of the companies she accuses appear to be tax compliant, whilst obviously paying less than the headline rates, is galling to say the least.

I am not saying I support the use of the Dutch/Irish double sandwich Cornetto as a strategy, but the law does appear to allow it and if so it is the law which needs to be changed.

Now remind me. Whose job is it to make the law again?

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Replying to carnmores:
Red Leader
By Red Leader
31st Oct 2013 12:13

Hypocracy is ...

... rule by hypocrites.

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By AndyC555
31st Oct 2013 12:42

Margaret Hodge...

It's not just that she doesn't know the difference between tax evasion and avoidance, she doesn't know the difference between turnover and profit! She seems to think that any sale IN the UK should be taxed here and at the same time any sale anywhere in the world by a UK company should also be taxed here.  She hasn't quite got around to demanding UK tax for non-UK businesses doing trade outside the UK but I'm sure she will.  Her idea of the 'tax gap' seems to be 'how much tax would be collected if no one claimed any reliefs or deductions for anything.'

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Replying to atleastisoundknowledgable...:
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By frustratedwithhmrc
31st Oct 2013 13:33

Illustrated by Starbucks really

AndyC555 wrote:
It's not just that she doesn't know the difference between tax evasion and avoidance, she doesn't know the difference between turnover and profit!

This is illustrated by both Amazon and Starbucks particularly, because despite the massive turnover of both businesses in the UK, when you strip out costs (particularly with the Starbucks shops paying too much rent for the value of the space) and value some of the intercompany transactions on a market price basis, Amazon barely makes a profit and Starbucks currently makes a loss.

So why should either company be paying corporation taxes to HM Treasury given the tax residence of Amazon (Luxembourg as I recall) or the current loss-making of Starbucks?

The suggestion that Starbucks losses are artificial doesn't stand up to scrutiny and it has always been Amazon's business model to pass back as much of their profit to the end customer as possible through a high volume / low margin approach to obtain maximum growth and therefore any profits are miniscule, the resulting capital value of the business being the main concern.

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By Duhamel
31st Oct 2013 13:22

google Richard Murphy tax idiot..

Hodge has probably read too much of Richard Murphy's articles and believed his BS. His definition of the tax gap is strikingly similar to  'how much tax would be collected if no one claimed any reliefs or deductions for anything.' The problem for me is that tax avoidance is now equated to evasion in the public consciousness.

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Replying to carnmores:
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By mackthefork
31st Oct 2013 19:00

Thats what they always intended

Charlie_T wrote:

Hodge has probably read too much of Richard Murphy's articles and believed his BS. His definition of the tax gap is strikingly similar to  'how much tax would be collected if no one claimed any reliefs or deductions for anything.' The problem for me is that tax avoidance is now equated to evasion in the public consciousness.

                                                                                                                                                                                                                                                         I work hard and I'm sure a lot of people here do, to do the best for their clients, and a lot operate within the spirit of the law as well as the letter, I do not think its for people like that to question the integrity of the whole profession based on the mistaken opinion that using reliefs in the way they were intended is somehow abusive, reliefs are generally to encourage certain desirable behaviours, and for the most part in widely used reliefs that is precisely what they do.                                                                                                                                                                                                                                                                Regards Mack
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Replying to catlady:
Red Leader
By Red Leader
31st Oct 2013 19:55

Richard Murphy

He's a CA and was partner in a firm of accountants.

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By ireallyshouldknowthisbut
31st Oct 2013 13:49

.

The PAC moaning about tax avoidance is like a bad workman blaming their tools

The gov's job is to set the rules

HMRC job is to enforce the rules

Accountants job is to apply the rules (legally) to reduce their clients tax bill.

You cant blame accountants for doing their job to the best of their ability within the enviroment created by the first two forces. 

I bet if these people have a dog, they leave it in the house all day and it does a [***] on the carpet they come home and blame the dog. 

 

 

 

 

 

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Replying to DaniJDevine:
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By frustratedwithhmrc
31st Oct 2013 13:56

Don't be silly

ireallyshouldknowthisbut wrote:
I bet if these people have a dog, they leave it in the house all day and it does a [***] on the carpet they come home and blame the dog.

Don't be silly, that would be the taxpayer funded illegal immigrant maids fault.

:-)

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By AndyC555
31st Oct 2013 14:40

Charlie_T

I can't quite work out if Richard Murphy should be disregarded as a figure of fun or worried about as a danger.  A generalist accountant who did half a degree in economics decades ago, he is now treated as a 'tax expert and economist' by those who are predisposed to want to believe whatever nonsense he comes out with. I do wonder what Damascene occurrence it was that changed Mr Murphy from someone quite happy to use a company structure to pay himself dividends to save NIC to now condemning anyone who doesn't pay the absolute maximum tax they possibly could by woefully mismanaging their tax affairs. 

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By ireallyshouldknowthisbut
31st Oct 2013 15:09

.

i thought Richard Murphy was a journalist? 

I recall his limited tax knowledge when he posted about the mismanagement (by his own hands) of a tax investigation into his own affairs having gotten fed up with his accountant's fees. 

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Replying to Ajtms:
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By AndyC555
31st Oct 2013 15:32

Mistaken identity....?

Perhaps we are talking about two different people?  It's quite possible that there are two Richard Murphy's who have limited tax knowledge.

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Replying to Ajtms:
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By frustratedwithhmrc
31st Oct 2013 16:04

Two Richard Murphy's ?

ireallyshouldknowthisbut wrote:
i thought Richard Murphy was a journalist?

He is a self-appointed tax expert who is paid by the Joseph Rowntree Charitable Trust to promote "Tax Justice", which in his lefty interpretation seems to be mean that everyone should pay over their wages to the government and get pocket money in return. The Tax Justice Network with which he was associated recently dumped him, although the reasons for his departure are unclear.

ireallyshouldknowthisbut wrote:
I recall his limited tax knowledge when he posted about the mismanagement (by his own hands) of a tax investigation into his own affairs having gotten fed up with his accountant's fees.

Certainly sounds like the Richard Murphy I know, he can be a bit bumptious to say the least.

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Replying to Ajtms:
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By ACDWebb
31st Oct 2013 16:37

Not Richard Murphy

ireallyshouldknowthisbut wrote:

i thought Richard Murphy was a journalist? 

I recall his limited tax knowledge when he posted about the mismanagement (by his own hands) of a tax investigation into his own affairs having gotten fed up with his accountant's fees. 

You're thinking of Nick Morgan
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By DMGbus
31st Oct 2013 20:25

A REAL scandal for PAC to examine

HMRC and it's evil treatment of companies that have overpaid CIS tax per their P35 forms.

HMRC's "do as we say not as we do attitude".

ie. HMRC gets away "Scot-Free" with it's many months delay in making repayments and no recompense to taxpayers, whilst on the other hand HMRC penalises late payers of tax in a heavy handed way.

HMRC's deceptive and misleading public statements on the issue of CIS (overpaid per P35).

The possibility (pure speculation) that HMRC's delays in making repayments might be as a result of Treasury or other secret instructions to delay making repayments to make public finances (Tax receipts) look good.

Questions really do need to be asked about the above matters.

The true extent of the problem needs to be exposed.

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By DMGbus
31st Oct 2013 20:31

Another REAL scandal for PAC examination.

It would be very useful if PAC were to examine HMRC's recent issue of incorrect penalty notices - for example for allegedly late P35 forms when there is no justification for such penalties (eg. P35 was filed on time or PAYE scheme had been closed down before 5 April and 'no P35 due' filing had been made and acknowledged by HMRC).

HMRC's attitude that it can repeat past mistakes - issue P35 penalties (£100 per month) after they've built upto £400.

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By ireallyshouldknowthisbut
01st Nov 2013 09:22

.

Ah my mistake. Thank goodness for that!

 

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By Duhamel
01st Nov 2013 09:50

Red Leader

Murphy is paid by trade unions to write what they tell him. He's now a campaigner for left wing causes, not a CA or journalist or tax expert.

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Replying to Matrix:
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By frustratedwithhmrc
01st Nov 2013 14:23

He's actually sponsored by the main union at HMRC

Charlie_T wrote:
Murphy is paid by trade unions to write what they tell him. He's now a campaigner for left wing causes, not a CA or journalist or tax expert.

As well as the funding for his blog by the Joseph Rowntree Charitable Trust (about 35k per year I think) for "Tax Justice" promotion, he has also been paid periodically for specific pieces of "Tax Justice Research" by the PCS who are the main union at HMRC, so when I hear him blathering on about how massive the tax gap is and that the solution is to massively expand HMRC staff to chase these mysterious billions, my inner voice keeps shouting "Paid Shill! Paid Shill!".

Remember that it was Richard Murphy's banging on about the billions that were hidden in Swiss bank accounts by UK tax evaders and when HMRC followed up on this with the recent treaty, the result was not nothing, but nowhere near the billions that Murphy and his cohort said was there.

Equally, his nonsensical figures about the corporate tax gap of 120 billion versus HMRC's 32 billion. The difference between the two vanish to almost nothing when capital allowances and other legitimate deductions are taken into account, so he's either being deliberately misleading or is talking out of his [CENSORED].

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