It's really quite amazing what the Fair Tax Mark will sign off on - Credit Betty Longbottom / Timpson Shoe & Watch Repairs - Main Street / CC BY-SA 2.0

We mentioned a couple of days ago that Timpson’s has been awarded – bought might be a better description really – the Fair Tax Mark. We also expressed a certain puzzlement at quite how this was done, given what is evident from the accounts.

One which subject a letter, or an observation if you prefer, from Andrew Carter, a tax practitioner with 31 years’ experience including 10 as a tax inspector:

The Fair Tax Mark implodes.

More remarkable evidence of the ‘fluidity’ of Fair Tax Mark director Richard Murphy’s views on tax avoidance is provided by his recent submission to parliament on tax evasion and avoidance.

In his submission he says that;

“Sometimes tax avoidance exploits differences between types of law e.g. exploiting company law to incorporate to reduce or defer a tax bill”

and that;

“tax justice campaigners now choose to ignore the distinction between [tax avoidance and tax evasion], suggesting it is not useful. They instead suggest that both should be called tax abuse”

So quite specifically, Murphy is saying that exploiting the differences between tax laws is tax abuse. For Murphy, the fact that something follows the letter of the law doesn’t stop it being tax abuse.

Contrast that, however, with Murphy’s response to the suggestion that John Timpson has avoided a possible Benefit In Kind charge by routing donations to his MP son’s administration costs through his company, Timpsons (who were recently awarded a Fair Tax Mark).

“Was it legal? Unambiguously so

If there was a BIK issue would we ever know? No: that’s not in the public domain and not a CT issue”

In other words, when it comes to awarding Fair Tax Marks, the possible exploitation of different taxes, of different tax laws, can be brushed to one side and ignored. As long as it follows the letter of the law, it’s OK.

Remember that Fair Tax Mark is a totally unofficial organisation that charges companies to get a FTM.

It could, perhaps, be possible to form the impression – this is purely an opinion of ours – that paying FTM a fee makes Murphy forget what he considers is and isn’t tax abuse.

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  1. One reason he is such a pant-load is that he refers to himself in the third person, describing to Parliament the opinions of “tax justice campaigners” as though there were more than one of him.

    It is better, come tax-filing day, to invest in Treasury bonds than rental properties. Are we “abusing” the system to arrange our affairs toward simplicity and low taxes?

    Parliament does not want to hear about “abuse,” as every law they write will be broken some day. They may want to know whether there is an argument to change the different tax classifications they have set up. Unfortunately for the Professor, each shelter he feels is being “abused” was established for a reason (ostensibly relating to the well-being of the nation) and he does not dispute those reasons, if he even knows what they are. He is simply disturbed that someone is getting away with something. Though, as Tim writes, that sour stomach will clear right up, if you pay him.

  2. Wasn’t there a profit share tax scheme that Brown introduced that ended up being used widely and costing him more than the thought in tax so it was withdrawn after a couple of years.
    How would that be classified, certainly legal, certainly something govt expected to be used as they passed a law, fact they cocked up the law/consequences isn’t anyone’s fault, but under Murphys definition it’s tax abuse

    • In the US, all of these are called “tax preferences.” They are a form of “government spending,” because the government spends money it should have held onto by allowing you to keep more of it, on the flimsy grounds that you are the one who earned it. The underlying belief of the people who use these terms is that, by default, everything and everyone belongs to the State.

  3. What is it going to take before someone in either that accounting/tax/finance or governmental sectors in Britain has the cajones to publicly tell Richard Murphy to Fuck Off?

    Then again, if Britain had someone in power with a working set it wouldn’t be Britain, would it?

  4. Question for someone. I’ve just noticed I’ve a share portfolio contains SSE. Holders of the exalted Fair Tax Mark. Not an inconsiderable number, either. 1400 . Going on 20 grand’s worth. I was wondering about how a shareholder would table a question at the AGM about the company being associated with it? The portfolio’s currently with an internet share trading service, so the holding’s are likely in a nominee name. S’pose I could could transfer into my own, for the occasion. Or can I get a proxy to vote them?
    Had a little bit of experience of making oneself obnoxious at company AGMs. (My mentor, in those days, thought sending a relative kid along, with a voting proxy on about 8% of a company’s stock to grill them was a good way of delivering an insult). But that was years ago. Much must have changed. But my obnoxiousness certainly hasn’t. How do I deploy it?

    • I hold stocks in the US, so your answer might not be the same. The voting card mailed every year includes a box to tick that you want the broker to send you a certificate of how many shares you owned as of the relevant date. (It may be labeled “Want to attend and vote own shares.”) That is all you need to attend the meeting and be obnoxious. But your labor-union counterparts will also file a Shareholder Resolution to be voted on at the meeting. Instructions on how to do that are generally in the Proxy Statement from the previous year.