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Richard Murphy

Richard Murphy

Richard Murphy is a chartered accountant, and was Senior Partner at Murphy Deeks Nolan until he and his partners sold the firm in 2000. In parallel with his practice career, he has been chairman, CEO or finance director of more than ten SMEs. Since 2000 Richard has been increasingly involved in taxation policy issues. He is a founder of the Tax Justice Network and director of Tax Research LLP, which undertakes work on taxation policy for a clients including governments, commercial organisations, aid agencies and pressure groups in the UK and abroad (including the TUC, which he advises on tax issues). Richard is a visiting fellow at the Centre for Global Political Economy at the University of Sussex, External Research Fellow at the Tax Research Institute, University of Nottingham, and a prolific and influential blogger at Tax Research UK.

Web: http://www.taxresearch.org.uk/Blog/
  • Economics

    Corporation tax: The (lack of) evidence for cuts

    28th May 2011 — Filed under: Economics

    Richard Murphy Richard Murphy

    At the heart of George Osborne’s economic policy is a deeply perverse belief that if he cuts public spending and services people’s confidence will increase because they will think that they will have more money to spend themselves as a result and so there will be economic expansion as they spend more in anticipation of this windfall.  This is called expansionary fiscal contraction. There is no evidence to support it: it’s very obviously not working. It has rightly attracted opprobrium, including from Paul Krugman.

    This perverse, and failing, policy is matched by another perverse policy which will also fail, but which has not as yet had time to evidence that fact.  This is the policy of cutting corporation tax in the belief that this will increase both growth and employment, which is central to Osborne’s policy of cutting the mainstream corporation tax rate from 28%,  which it inherited from Labour, to 23% over a period of four years.

    It is argued by many, including academics  and the OECD that there is, indeed, a relationship between growth, employment, and low corporation tax rates. However, new research that I’ve undertaken for the TUC, published today, leads me to seriously doubt this.

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  • Economics

    Corporation tax and the budget: What will they really pay?

    22nd June 2010 — Filed under: Economics

    Richard Murphy Richard Murphy

    The unfairness of the budget is shown in microcosm in the proposed changes to corporation tax. Over the next four years the top rate of corporation tax in the country will be reduced from 28% to 24%, only paid for in part by a small reduction in the investment allowances large businesses (in particular) enjoy. Small companies will, at the same time, see a fall in their corporation tax rate from 21% to 20%.

    However, all is not as it seems. In the TUC publication The Missing Billions published in 2008 we showed that the effective rate of corporation tax paid by large businesses in the UK was no more than 22%. Subsequent data from HM Revenue & Customs published on their own web site has confirmed this estimate as generous – they show an average rate of 21% and that some large companies pay much less.

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  • Economics

    Budget: It could be a bad day for tax avoiders

    22nd June 2010 — Filed under: Economics

    Richard Murphy Richard Murphy

    Hidden in the small print of the Budget press notices is the following announcement:

    As part of an approach to develop sustainable responses to avoidance risk, the Government intends to examine whether the option of a General Anti-Avoidance Rule should form one element of strengthened defences. This will be part of wider work on improvements to the tax policy-making process.

    There had to be some good news in amongst the gloom today. This is just a small sliver of it. Undoubtedly in the notice to appease the Lib Dem coalition partners such a measure is something the TUC has long argued for – and which is is credited with having promoted in recent years – even inside HM Treasury.

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  • Economics

    Budget: Any gains on Capital Gains Tax?

    22nd June 2010 — Filed under: Economics

    Richard Murphy Richard Murphy

    So, the Lib Dems got their sop capital gains tax increase. And George Osborne got the last word. The capital gains tax rate for those on higher rates of tax has been increased to 28% – but not to be in line with income tax rates. That, Nick Clegg will hope, may be enough to keep his backbenchers in line.

    But at the same time there was no reduction in the annual allowance for the tax – which at over £10,000 per annum is far more generous than that for income tax, especially as it is, in effect, completely transferable between married couples and civil partners. And entrepreneurs – the funders of the Conservative party – get a massively increased exemption so they can make £5 million during their lifetimes and pay this tax at only 10% on it.

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  • Economics

    From economic crisis to a Green New Deal

    5th November 2009 — Filed under: Economics, Environment

    Richard Murphy Richard Murphy

    Richard Murphy will be speaking on the Green New Deal at Beyond Crisis, a TUC / Guardian one-day conference on progressive responses to the financial crisis on 16 Nov in Central London. Register for free tickets at www.tuc.org.uk/beyondcrisis

    The UK economy remains in crisis. It is still in recession. Any recovery, when it comes, will be fragile. The capacity for a foreseeable disaster to become a nightmare depression still exists.

    Two things could precipitate the crisis that creates depression. The first would be any serious attempt to cut government spending at this moment. If this were to happen the fall in demand would leave unemployment spiraling, government debt escalating and deflation a significant probability. When that combination occurs the chance of getting out of depression is limited.

    The second crisis that could cause depression would be international failure to cooperate on tackling this issue. Attempts to restrict trade at this moment, to impose tariffs or to simply rely on the action of others to stimulate the economy could all create the inertia that tips the balance downwards.

    Both possibilities exist: because of the threat of a Conservative government dedicated to slashing public services irrespective of the social and economic consequences for the people of the UK, and elsewhere, the risk of the former outweighs the latter by some way right now.

    The Green New Deal seeks to tackle these issues, but does something that few other strategies offer: that is an integrated short and long term view of the way in which the economy should develop.

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