Richard Murphy , a self-confessed tax expert, condemns the UK tax system as
outdated, inequitable and not fit for purpose while our barely accountable HMIT
Customs & Excise is understaffed, and led by big business bosses and large
accountancy firms who perpetuate inefficiency and inequality. Suspend disbelief and
imagine Richard Murphy is Chancellor delivering his maiden speech demolishing
current practices and introducing the revolutionary underpinnings of a fairer society.
The ‘New Chancellor’ declares:
It is government’s duty in taxing to create conditions of equality and prosperity for all
by managed spending. Most people would willingly submit to a fair tax system.
Insistence that social investment is unaffordable on the altar of balancing the books is
untrue nonsense. Designing a fairer system first requires reappraisal of currently
The essential truth, recognised by the Bank of England, is that banks create money by
Lending, in debiting a loan account and crediting a current account and not, as
popularly peddled, vice versa. Government can, therefore create money the economy
requires since we own the Bank of England. Banks make money by lending, and
government creates cash by spending. Banks control loans through repayment, and
governments reclaim money by taxing. Government spending precedes taxation, so
spending is Not dependent on tax.
It is government’s job to create and manage money, avoiding inflation or deflation – a
responsibility too big for other hands than government. Just as banks risk lending to
make profit, governments must risk spending to initiate reclaimable taxes with
responsibility to decide how to recoup its spending.
HMIT Customs & Excise is relatively unaccountable, headed by representatives of vested interests - big accounts firms, solicitors and financial advisors whose aim is to minimize tax and corporation tax on profits, income, gifts, gains, speculation and corporation tax which results in a system hitting lower and average earners disproportionately. Consultation will be spread much wider to include all taxpayers interests. Vested interest will no longer shape tax laws and practices.
Accountability for Tax will be insured by a new Secretary of State for Taxation and a
Department of Taxation with full structure and staffing to ensure tax owed is collected
offshore or otherwise. Tax laws will be introduced or amended to reverse onus for Tax
Collection to prove tax liability, but place onus on company directors, solicitors,
accountants and advisors to prove if and why claimed tax concessions are valid, the
default position will deemed liability for full payment of tax.
Unless proved otherwise, attempts to avoid or evade in any way, including shifting gains outside the UK of UK assets any individual, company or trust on behalf of anyone or any body attempting avoidance will themselves be liable to pay and risk assets in question being seized. Since land will be treated as taxable, owners, not occupying tenants, will also forfeit land ownership to the state for non-payment of tax. This should
ensure building land or other land is used productively.
All Land will be taxed based on land rental value on a progressive scale, above a modest threshold, and unused, vacant or undeclared ownership taken by the state. Unearned income which, astonishingly, bears a lower rate than earned income at present, simplifying the system. Wealth tax on properties and let property portfolios over £1M, other than a main residence, family farms or businesses. will counter house price inflation.
As tax will be due on all income and wealth, stamp duty will be obsolete, so abolished. Tax relief on buy to let landlord mortgages which helped fuel increases in house prices,
will also be abolished.
Disputes will be judged according to the Intention of tax laws. An office for Tax
Responsibility will audit gaps, effectiveness, reviews and proposals for change with
powers to recommend laws, amendments and repeals. The Chancellor will have
overall responsibility including funding and staffing to ensure collection of taxes.
Full disclosure and accounts will oblige banks, businesses, companies and trusts to
name all owners and directors on public record.
New domicile and residence laws, with country by country reporting, will ensure that
income generated in the UK is paid in the UK with tax deducted at source from