Friday, December 12, 2014

Tax issues for Santa to ponder

Santa's VAT adviser, who wishes to remain anonymous, says she has been pondering some key issues:

First things first, is Santa a taxable person? He is only active once a year (though it is a busy night and he visits a lot of countries!). Also his activity is carried out very regularly every year (he never misses). But is he carrying out an economic activity? Is he giving the presents away or are the mince pies and brandy left out for him (and the carrots for the reindeer) non monetary consideration (not to mention the requirement that the children have to have been good – which is surely priceless).

Is the letter to Santa a contract and what happens if one party (the child) fails to meet its part of the bargain (the aforementioned ‘being good’ bit). If the gifts left for each child in a household cost less than £50 and there is no consideration provided, can Santa claim the input tax on these without there being an output tax liability?

How should he value the work of the elves in the workshop that produce the gifts – and are they his employees or are they self-employed? There is no doubt a range of other issues to consider as regards Santa’s direct tax affairs and how he can afford to carry on year after year with no money coming in (unless you count the fees for all those shopping centre stints – but is that really him??).

Is Santa’s sleigh an airplane used by an airline operating for reward chiefly on international routes? Can the reindeer food be zero rated because the reindeer are working animals? He is supplying delivered wrapped goods, which all start their journey at the North Pole, (non EU) and don’t go through Customs, so what is the place of supply, and is he making a single supply or is the wrapping separate?

If it is separate how do you apportion the non monetary consideration (assuming there is any)?

 Lots to think about!

[A version of this letter has appeared elsewhere beforehand but I cannot trace the original]

Friday, October 31, 2014

Scary Tax Movies

Many thanks to @Freeagent for prompting twitter users to suggest #ScaryTaxMovies this Halloween.

I've picked some of the best suggestions:
Tax Return of the Living Dead - +PracticeWEB Ltd
Silence of the ledgers - +slackbladder35
Taxes Chainsaw Massacre - +Kelly Forbes
Friday 31st January and Rosemary's Bookkeeper - +cashprotect
An American Multinational in London - +Adrian Pearson
The Taxorcist - +FreeAgent
Auditor Dogs - +AccountingWEB
I Know What You Earnt Last Summer - +Milo McLaughlin
Star Wars VI: Tax Return of the Jedi - @mrderekrussell
A VAT Inspector Calls - +Roan Lavery
28 days overdue - @mattbrailsford
Account Dracular and VATMAN Returns @twithomas
Tax InSpectre Gadget - +OwenOhReally 

And my own offerings:
VATman begins
Psycho tax inspector
Young VATenstein
Phantom of the Tax Office
Little shop of HMRC
The Fair Tax Project








Friday, September 26, 2014

'Born to the m-i-i-i-i-i-ld' (To the tune of Steppenwolf's 'Born to be Wild')

Calculator running
Totalling invoices
Looking at debentures
And all other finance choices

Yeah darling, gonna make it add up
Put the world in a big spreadsheet
Do all of my sums at once and
Leave it really neat

Some find accounts frightnin’
Leaves them full of wonder
All of these expenses
Just what heading are they under?

Yeah darling, gonna make it add up
Put the world in a big spreadsheet
Do all of my sums at once and
Leave it really neat

All prop-er-ly filed
I was born, born to be mild
Tax returns so sly
I make the taxman cry

Born to be mi-i-i-ild

Born to be mi-i-i-ild

Calculator running
Totalling invoices
Looking at debentures
And all other finance choices

Yeah darling, gonna make it add up
Put the world in a big spreadsheet
Do all of my sums at once and
Leave it really neat

All properly filed
I was born, born to be mild
Tax returns so sly
I make the taxman cry

Born to be mi-i-i-ild


Born to be mi-i-i-ild

Words by accountant and poet: Stephen Brown Audio version can be heard here.

Friday, September 19, 2014

It's official: HMRC writes "ridiculous" "nonsense"

Given this is a fun blog it's not usual for me to reference the decision in a tax tribunal. But it was impossible to resist when I heard about what the tribunal said.

Mr South was appealing against a late filing penalty in respect of his tax return for 2012/13.  HMRC claimed to have sent him a notice requiring him to file the return in question. The computer then sent an automatic penalty which was what alerted Mr South to the need to file the return.

He was reluctant to pay the late filing penalty as he had not received a 'notice to file' and had not been required to file returns every year in the recent past. 

Mr South then received a rejection of his appeal sent by an official from HMRC who said: 
“On reviewing I can see that no evidence to date has been received confirming that you did not receive a tax return or notice to file.”
In reaching their decision that Mr South did NOT need to pay the penalty the Tribunal said:
The result of [Mr South's] appeal is a piece of nonsense and shows that the appeal was not properly considered by HMRC. It is ridiculous to expect the appellant to produce evidence to show he did not receive the tax return or notice to file. 
Steven Maurice South vs HMRC -12 August 2014

Friday, September 12, 2014

An accountant with a STANDOUT way of describing himself

The way Mark Asquith, Managing Director of Asquith & Co, describes himself, on the meet the team page of his website, certainly makes him stand out. I'm referring especially to the table beneath the more conventional opening paras:
I have been working in accountancy since 1982 having started work as a spotty trainee on leaving school. Asquith & Co became a reality in 2001 although I had previously hankered after being self-employed. 
I love helping clients to keep just on the right side of the taxman while, hopefully, having a few laughs on the way - this is not easy but I do try.
                   Specialist subject:     Saving you money
                   Likes:                        Saving you money
                   Dislikes:                    Not saving you money 
                   Favourite colour:       Black... keeping you in it
                   Favourite food:         Roast taxman 
                   Favourite place:       Judo mat
                   Currently drives:       The taxman crazy
 

Friday, August 29, 2014

Tax flags

A British guy was chatting with his American friend and was jokingly explaining about the red, white and blue in our National flag.

"Our flag symbolises our taxes," he said. "We get red when we talk about them, white when we get our tax bill, and blue after we pay them."

"That's the same with us," the American said, "only we see stars, too."