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Showing posts from 2008

Doing your VAT return is like being a stripper in an empty room

Full marks to Times columnist Libby Purves for what I think is probably the best commentary on the pointless VAT rate change announced in the PBR.

Here are just a few of her choice remarks:
The VAT reduction is the final provocation. It is a stupid tax anyway, visibly inferior to the simple old purchase tax. I am an unpaid and irritable tax collector, yet of very little help to the Exchequer. It is like being a stripper in an empty room: a terrible waste of sequins and effort. But the absurd and temporary 2.5 per cent reduction puts the tin lid on it. It is the silliest gesture since Harold Wilson banged double VAT on yacht equipment to annoy Ted Heath.

Taxation Board game for Christmas

Taxation magazine has produced a Taxation Board game to help bored accountants and tax advisers involve their families in their technical world over the festive season. Or maybe it's something to play in the office before you leave for Christmas.

As Richard Curtis who devised the game says, rather optimistically:

Who knows, this could be the first of a great Christmas tradition - the annual Taxation board game. Watch out for 'Taxopoly', 'Trivial Pursuit - the Tax Edition' and 'Taxudo' (the Inspector, in the office with Tolley's Orange Tax Handbook 2008-09). To play the game just follow the guidance provided on the Taxation website:
First, snaffle the dice from that old Monopoly set under the stairs.
Next you need some playing pieces: we have provided some cut outs of famous tax faces at the foot of the game for you to use. They're downloadable along with the playing board. Download them by clicking the PDF link at the foot of this article.
You can c…

Sir David Tweedie and the French

Speaking to the US online journal WebCPA about the International Accounting Standards Board, Sir David is reported to have said:
We have an understanding with the French. They don't trust me and I don't understand them. In France I'm treated like a king and you know how they treated their kings!Vive l'entente cordiale!

My thanks to Accountancy magazine for this snippet.

Edinburgh research into acountants

As reported in The Times, Body and Soul section 25 October 2008:

Need to know?

Wild claim: Accountants are colourful people with lots of friends.

What you should know:
Edinburgh researchers have studied the desperate ways finance companies try to persuade gregarious graduates that accountancy is fun. The firms use staff profiles "to confirm the existence of a social life" and stress that accountants take part in "fun activities" such as pub crawls, barbecues and discos.

Verdict: Doesn't add up.

Choosing a new accountant

Spotted this anonymous story on UK Business Forums recently in a discussion about how people choose a new accountant.
I spent ages asking around my local area and getting positive testimonials. I eventually chose a very reputable firm based on several recommendations.

Unfortunately, the day I went for my appointment I was running late and inadvertantly walked into the accountants next door to the one I was supposed to be visiting. They said they had no recollection of my appointment (not surprising really), but sent me to an office really quickly and in no time I was talking to my new accountant.

I have since been really happy with the service they provide and wouldn't change them. I'm glad I did all that research!

Me, Myself and I

Years ago Nichola, an accountant had a bizarre conversation with HMRC concerning her own tax affairs.

She was told that as she was a sole practitioner HMRC could not discuss her own personal tax affairs without there being a form 64-8 authorisation in place. Nichola tried to explain that she was the taxpayer and if she wasn't in practice then of course HMRC would talk to her about her own tax affairs. She got nowhere so duly obliged and made herself her own agent. Years later and she still represents herself!

Thanks to Nichola Ross Martin at PLC law for this one.

A timely retelling of an old joke - now featuring the Chancellor

Alastair Darling and the Michael Izza (CEO of the ICAEW) were arguing over who had the more noble profession and agreed it was whichever had been around the longest.

Michael, an accountant, convinced he'd won, quoted the bible. Even before God created Adam he created an orderly universe from chaos. An orderly universe implied the involvement of accountants to monitor and keep track of developments. By definition some of the angels must have been accountants. There were no taxes so no tax inspectors around that early in human history.

Alastair, a politician (the Chancellor no less) wasn't beaten. He listened patiently and then simply said: "Who do you think created the chaos?"

The HMRC tax office genie is brighter than you think

A modern day cowboy has spent many days crossing the western plains without water.

His horse has already died of thirst.

He's crawling through the sand, certain that he has breathed his last breath, when all of a sudden he sees an object sticking out of the sand several yards ahead of him.

He crawls to the object, pulls it out of the sand, and discovers what looks to be an old brief case.

He opens it and out pops a genie. But this is no ordinary genie.

She is wearing an HMRC Tax Office ID badge and a dull grey dress.

There's a calculator sticking out of her breast pocket, a bulging file in her hand and a pencil tucked behind one ear.

'Well, cowboy,' says the genie... 'You know how I work. You have three wishes.'

'I'm not falling for this.' said the cowboy. 'I'm not going to trust a Tax Office genie.'

'What do you have to lose? You've got no transportation, and it looks like you're a goner anyway!'

The cowboy thinks about …

Tax advice anyone?

Accountant and profit consultant Keith Lawrence was telling me about a recent experience he had with a prospective new client.

Could this happen to you?
There was an initial phone call from someone wanting help with their tax. After a brief conversation Keith invited them in to meet with him to see if he could help (and to see if he wanted to take them on as a client). On their arrival the 'client' looked around and expressed a little surprise that the office was smaller than he'd expected. He was also surprised to learn that Keith was an accountant as well as a tax adviser. He just wanted tax advice.

They sat down together and the 'client' started to explain his tax problem. When Keith raised the question of fees the 'client' was shocked. He'd assumed that tax advice was free.

After a few moments it then became apparent to Keith why the 'client' was so confused. He thought he had called The tax office. HMRC.

VISTA has become a permanent and welcome part of my life

For as long as I have owned my laptop running Windows Vista I have hated the programme. That flying blue bagel of death just winds me up. Still, earlier this week I became a changed man.
Expect to hear me praising VISTA in future.

What changed?

I realised that VISTA is the perfect acronym for the Tax Advice Network. It’s what you get when you come to our website: Vetted Independent Specialist Tax Advisers. VISTA.

Fred McCauley on the News Quiz

During last weeks' show Fred suggested that the audience seemed less interested in interest rates than at a recent conference of chartered accountants where he was roundly applauded for telling a joke where the punchline was: “.....and that was 2% over LIBOR!”

Ten laws of Accounting

1.Trial balances don’t
2.Working Capital does not
3.Liquidity tends to run out
4.Return on investments never will
5. Bottom line is only the tip of the iceberg.
6. If you need accounting to prove it, it was probably not true in the first place
7. There is nothing more permanent than a temporary account
8. An accountant is a man hired to explain that you did not make the money you did
9. Accounting is economics without assumptions
10. Obviously accounting pays, otherwise there would be no accountants.

Any more?

Seven tips for managing your tax adviser


Your tax adviser leads a stressful life dealing with HMRC (the Taxman) and cannot cope with you being depressed as well. 2. DO NOT EXPECT YOUR TAX ADVISER TO BE SYMPATHETIC WITH YOUR PROBLEM Your tax adviser's ethical code requires him to be objective and independent. 3. DO NOT COMPLAIN IF YOUR TAX ADVISER'S ADVICE LOSES YOU MONEY You must appreciate that tax IS DIFFICULT and an occasional experience of negative income is only to be expected. 4. DO NOT ASK YOUR TAX ADVISER TO EXPLAIN WHAT HE'S DOING OR WHY Unfortunately the jargon inherent in tax matters is not compatible with explaining it to someone like you in a way you would understand. 5. BE PREPARED TO TRY FIENDISHLY COMPLEX TAX SCHEMES WITH ENTHUSIASM Though the planning may be ineffective and cost you a lot, the resulting thesis on the deficiencies of such schemes may result in the tax adviser acquiring further letters after his name. 6. PAY ALL YOUR TAX ADVISER'S BILLS PROMPTLY …

The same professional surname

One of the senior tax partners at Horwath Clark Whitehill told me this delightful story many years ago. He was an FCA and also a Fellow of the Institute of Taxation. In those days the relevant initials were FTII as this was before the Institute became a Chartered body.

Ian had received a letter that had clearly been processed as part of a mail-merge facility (which must have been in its infancy in those days). He told me the salutation read:
Dear Mr Fcaftii - Which he pronounced: Dear Mr FeckerFootyIan noticed that the signatory had the same designatory letters so he responded by writing back:
Dear Mr Fcaftii. I see our computers think we share the same surname

Men and Women and Taxes

People who complain about their taxes can be divided into two groups - Men and Women

Indeed, tax is one of the few things men and women can agree on.

The big apology that Paul Hogan wants

Paul Hogan, who played Crocodile Dundee, has been speaking about the ongoing investigation into his tax affairs by the Australian tax authorities:

"I'm just waiting for the big apology. 'Sorry, Mr Hogan, that we branded you a fraud, international tax wizard - I like that part - and money launderer and gun runner. We sort of jumped in and we were wrong and I apologise.' That's not going to happen but it should."

- As reported in the Sydney Morning Herald

Auditors' report on Lehman Brothers' Balance sheet

There are two sides of a Balance Sheet, Left & Right Assets and Liabilities respectively On the Right side there is nothing right and on the Left side there is nothing left.Thanks to Nigel Hinton of AOH Accountants for that one. He's also pointed that:Some of you may recall the first time you heard this early in your business career and the many companies that it has applied to since and for historians you may like to know that the first time this joke was heard was in Italy shortly after Pacioli invented double entry bookkeeping at the end of the the 15th century.

Your own limited company or umbrella company?

Loved this approach to help contractors decide whether to operate their own limited company or to use an umbrella company service:

"A simple overview of your two main options. No jargon, no selling just the plain simple facts. Find out which option will best suit you. Read this before deciding."

After the overview is this brilliant (if biased) summary:

Set up your own limited company if you:
* Have had training
* Are an accountant
* Enjoy administration & paperwork
* Understand complex forms
* Have nothing better to do of an evening or weekend than complete forms
* Believe biros will never replace fountain pens

Chose the Umbrella option if you:
* Want someone else to do all your work for you

With thanks to

You know there' a credit crunch when...

... HMRC start offering a discount for cash.

(The list of examples is much longer but the others aren't rel;ated to tax or accountants so don't really fit here.)

Oh, all right then:

You know there' a credit crunch when...

....The cashpoint asks if you can spare any change.
....There's a 'buy one, get one free' offer - on banks.
....Gordon Brown has stopped chewing his nails and started sucking his thumb.
....Your builder asks to be paid in Zimbabwean dollars rather than sterling.
....Highgrove has been repossessed.
....Victoria Beckham is pictured shopping in Primark.
....Alistair Darling's eyebrows have turned white.

Please add any others you're aware of.

The graffitti wall

A wall built at a cost of £3,000 by a council so that teenagers would have somewhere to spray graffiti was daubed with its first slogan:
'I paid my tax and all I got was this lousy wall.'The 6ft high by 30ft long barrier was installed in the hope that youths would stop vandalising local property.

Jim and Debbie Ziegler

Jim Ziegler credits his wife with his success. She's an accountant. She's helped him to become a millionaire. He says he'll never leave her. Why?
"She's the only one who knows where my money is"

A tax conscience

"A tax conscience is that small inner voice you have that tells you that the Special Compliance Office will be writing to you."

- Anon

How to avoid Stamp Duty Land Tax

The Sunday Times today has a news piece about how the super rich do this. But I prefer the Nick Newman cartoon on the back of the 'News Review' section.

It shows a man standing outside his house by a 'For Sale' sign. Two potential purchasers have approached him and he says: "If you make me a good offer for the carpets and furniture, I'll throw in the house."

The wages of sin

The wages of sin are death, but by the time taxes are taken out, it's just sort of a tired feeling.

- Paula Poundstone

Is the same true for HMRC?

Two years ago it was impossible to get through on the phone to the IRS. Now it's just hard to get through. That's progress.

- Charles Rossotti, former IRS Commissioner

Tax collectors

A man walks into a restaurant with his pet alligator under his arm.
“Do you serve tax collectors?”, he asks the barman.
“Of course”, says the barman.
“Well,” replies the man, “I’ll have a beer, and my alligator will have a tax collector.

When all is not quite what it seems

The company personnel department had carefully interviewed thirty-eight people for the job of assistant to the financial director.

The chief executive thought that one candidate - Charles - seemed ideal. Charles had been to a major public school. Not only was he a qualified accountant, but Charles also had a masters degree in business administration. He seemed fully aware of the latest creative accountancy techniques.

'Charles,' said the chief executive, we've decided to offer you the job. And as you're so well qualified we've decided to start you off on a slightly higher salary than the one advertised. We'll pay you 36,000 pounds a year.

'Thank you,' replied Charles. 'But how much is that per month?

Found on the KEEPERS ACCOUNTANCY website.

When a taxpayer accuses the taxman of begging

This has evidently been doing the rounds for some time. Worth including on this blog too though. It's allegedly a letter sent by the taxman in reply to a taxpayer's refusal to pay outstanding taxes:

I am writing to you to express our thanks for your more than prompt reply to our latest communication, and also to answer some of the points you raise. I will address them, as ever, in order.

Firstly, I must take issue with your description of our last as a “begging letter”. It might perhaps more properly be referred to as a “tax demand”. This is how we at the Inland Revenue have always, for reasons of accuracy, traditionally referred to such documents.

Secondly, your frustration at our adding to the “endless stream of crapulent whining and panhandling vomited daily through the letterbox on to the doormat” has been noted. However, whilst I have naturally not seen the other letters to which you refer I would cautiously suggest that there being from “pauper councils, Lom…

Haggis tax?

Haggis and tax laws are both the result of bloody processes; the end result is a mystery and you wouldn't want to watch either being made.

If you wanted photos of accountants in action....

On my blog for ambitious accountants I have just posted an item about how an architect blew me away by showing me a few photos on his iphone during a networking event. They reinforced what he was saying about the style of houses he had designed for clients.

I've been struggling to think of ways that accountants could do something similar. Showing a few photos of a well bound and balanced set of accounts for example wouldn't have the same impact.

In the spirit of this blog of course I can let my imagination run away a little. How about showing pictures of:
the car parking spaces reserved for clients behind your office in the centre of town?your reception area with free tea and coffee, papers and the like for visitors?the toys and colouring books in the area close to reception for when clients bring their children with them?a tax official looking bloodied and brusied after a long meeting during which you successfully defended a client's tax position?your burly looking partner -…

NHS support for tax reform campaigner

Richard Murphy shared a lovely story just before giving the AIA Founder's lecture last night:

Apparently Richard was challeneged by a senior official at HMRC who was curious as to how Richard could afford to spend so much time on his tax campaigning, research and writing. Richard explained that he was supported by the NHS.

The official nearly exploded with indignation. "Why on earth is the NHS supporting tax research?" he demanded to know.

Richard then explained that it was only doing so only indirectly. It seems his wife is a high earning GP!

During his lecture Richard later referred to the European Savings Tax Directive and stressed that his wife got very concerned the first time she heard him refer to it by its initials 'STD'. She wanted to know how and why and.....

When I grow up...

....I'm going to be an internal auditor

....I want to marry an internal auditor
Just two of the quotes from a two and an half minute video which features kids from all over the world professing their interest in becoming internal auditors!

This fun video was presented at The IIA's 2008 International Conference. All of the boys and girls featured are children of staff members at IIA Global Headquarters

The power of prayer

A couple of weeks after hearing a sermon on Psalms 51:2-4 (knowing my own hidden secrets) and Psalm 52:3-4 (lies and deceit), a man wrote the following letter to the taxman:

"I have been unable to sleep, knowing that I have cheated on my income tax. I understated my taxable income, and have enclosed a check for £150. If I still can't sleep, I will send the rest."

Cross Tax

The current edition of HMRC's Agent Update introduces something new to the tax vocabulary. ‘Cross Tax”.

Does it mean:
a) What you get when HMRC staff are overstressed and unhappy?
b) A big balancing payment that a client wasn't expecting to have to pay; or
c) 'Across the taxes’ as opposed to applying to just one area, such as corporation tax?

The answer is (c).
Under this heading come updates on the Anti-Avoidance Simplification Review and further information on New Powers as well as news that HMRC will stop issuing 'Reply Paid' Business Response Envelopes from 1 October 2008, with the exception for those issued for benefits and credits. Taxpayers must now do it all online. And they may not all be happy about that. Maybe 'Cross Tax' is the right expression after all.

More quotes

“I never ask my accountants to help me to make a decision. I rely on my gut feeling and then call in the accountants to make it work.”

Richard Branson

"When I asked my accountant if anything could get me out of the mess I am in now, he thought for a long time.... "yes" he said. "Death would help."

Robert Morley

Previous quotes on this blog can be found here, here and here

Black Books - Cooking the Books

I've only recently heard of the Black Books 'sit com' that was first broadcast almost 8 years ago in September 2000.

In the first episode we are introduced to Bernard, the alcoholic Irish book shop owner. But, Bernard has a problem. His taxes need doing, he's mathematically illiterate, and there's no avoiding it.

Here's a short (100 second) extract where Bernard attempts to complete his self assessment tax return without any help:

If you want the full 5 minute clip, it's worth it for the other things he does to avoid doing his tax return and especially for the final 10 seconds.

The Chancellor's dance

I think we've all seen this one too many times now.

In this new dance craze, the Chancellor's Excuse Me - you follow Gordon and Alastair and take one step forward, two steps back, then sidestep the issue.

Drawing up the hearse and letting them smell the flowers

When I was a partner in a large firm one of my colleagues had an enviable reputation. He was a really nice guy and yet was also renowned for his ability to persuade prospective clients that their problems were much worse than they had assumed when they arrived for meetings with him.

He described his approach as:

"drawing up the hearse and letting them smell the flowers".
I was reminded of this recently when I was told about one of the Big 4 firms. Apparently they studiously avoid giving any advice during initial meetings with prospective clients. I was told:

"If you go in knowing nothing, you know nothing more coming out, but you're very, very scared!"


What matters most?

Not sure if this counts as funny or sad.

Last year Kevin Slevin shared with me his experience of the approach that many small firms of accountants adopt when seeking good tax advice: STEP ONE Ask a number of providers what the advice will cost STEP TWO Pick the cheapest provider STEP THREE Hope the advice received is correct. Sometimes it works!!

What not to do after a job interview as an accountant

Yesterday's Sunday Times included a piece about the 'explosion in text messaging'.

Amongst the stories referred to in the article was this salutary lesson:

Take the example of Ed, a university graduate from Manchester who applied for a job with a top accountancy firm in London. After a virtuoso performance at the interview, the vice-president in charge of recruitment gave him his mobile number in case he had any questions. Young Ed thought nothing of texting him the next day with the following message: “m8, wot a gr8 intvw!! u shld def give me the job lol.”

Needless to say, the vice-president did not oblige.
Of course one could question the accuracy of the story. I suspect it is based on an original story about an American graduate applying for a job in the US office of an accountancy firm. After all, whoever heard of a UK firm with a "vice-president in charge of recruitment"?!

The balloonist and the accountant

Michael Heaney tells the story of a friend of his who was out in a hot air balloon when he crash landed in a field.

Dusting himself down he saw a man walking a dog and called out to him. The man came over and my friend asked him where he was.

The man thought for a moment and said "You are about 2 feet off the ground in a wicker basket in the middle of a green field".

My friend said "You're a Chartered Accountant aren't you" The man said "Yes, how did you know?" My friend replied "It was simple really, the information you gave me was precise, accurate and totally bl**dy useless!"

(Had the joke finished here as it normally does, I might not have included it here as I'm not keen on reinforcing old stereotypes. But it continues with the Accoutant's reply to the balloonist:)

"And you must be a Manager -
you don't know where you are or where you are going,you have failed to control the situation you find yourself in. and now you ex…

Letter to the taxman

Below is text from an actual letter received by the Revenue Commissioners at Co. Longford, Ireland, from a farmer in reply to a final income tax demand.

Dear Sirs,
Your letter arrived this morning in an open envelope and it would have given my son and myself pleasure had it not revived in us a melancholy reflection of thought the account could have been settled long ago, and you could not understand why it hadn't. Well, here is the reason.

In 1987 I purchased a hay shed on credit. In 1988 I bought a combine harvester, a manure spreader, two horses, a double barrel shifter, two cows and ten razor back pigs, also on credit.

In 1989 the bloody hay shed burnt to the ground leaving not a damn thing. I got no insurance either as the bloody premium lapsed. One of the horses went lame and I loaned the other one to my brother who starved the poor bugger to death.

In 1990 my father died and my brother was put away when he tried to marry one of his sheep named Hilda. A knacker got my daughter pre…

Do strippers make ideal clients for accountants?

I recently heard about an accountant who specialises in strippers. Whereas other accountants might focus on solicitors(!), hospital consultants, charities or any other business sector, his reasons seem quite logical:
They are generally honestThey are high earners with good cashflowThey are quite up front (literally, apparently)They often have big assets (Can't believe I'm typing this!)They pay in cash in advance (as they have so much of it)Are readers aware of any other less common and vaguely amusing target sectors for accountants looking to specialise?

Why are the accountants listed in film credits always female?

I heard today about an accountant who tells everyone he meets that this is a fact of life. When you look at the credits that roll after a film is over, there is always an accountant listed and it's always a woman.

Now, ok, maybe it's only accountants who read the credits that far down, but is this true?

Has anyone else noticed this? Or even looked?

Have you ever been so insulted?

I'm addressing that question to the accountants who read this blog.

In today's Sunday Times Rod Liddle reports on a discussion about how to rebrand Gordon Brown. He talks to Saffron, a branding company run by Wally Olins CBE who is reported in the paper as thinking that the public could end up feeling sorry for Gordon Brown who should remember:
"..what made him attractive to the party in the first place..."And what was that exactly? Mr Olins expands:

"This is what happens when you put an accountant in charge of the company. Disaster. The voters liked the double act of Blair and Brown; they understood that one was about presentation and ideas and the other was about accounting. That worked"
I'm not sure what's worse. The suggestion that Mr Brown is an accountant, that it's an insult to him to describe him that way or the suggestion that accountants are not qualified to run a company effectively.

I've explained elsewhere why I disagree with the c…

Tax Tunes

A recent US TV Channel broadcast an expose of a Team building training session for US Revenue officials (known as tax auditors) in which they revise the words of popular songs to create their own "Tax Tunes". Videos shot during the training sessions are featured in both part one and part two of the News Channel 5 programmes.

To save you the pain though here are some 'highlights':

To the tune of "Hey Jude," one group sings, "Hey, dude, the check is in the mail."

Another group dances to the music of "Eye of the Tiger," instead celebrating the "eye of the auditor."

One auditor dressed in an aluminum-foil cone bra, sings Madonna's "Like a Virgin" as "Like an Auditor."

To the music of "Turn! Turn! Turn!" another group sings about fuel taxes. "Burn, burn, burn."

Still another group sings, "We're working for the tax money on the chain gang." "Oh, oh, we're toiling on the …

Guess what he's talking about

It was only when I was gifted a subscription to 'Private Eye' for my 50th birthday that I became an avid reader and fan. What have I been missing all these years?!

I've already commented on one item from this week's issue on my Tax Advice Network blog. This one is in a similar vein but more light hearted as befits this blog.

It concerns Tory backbencher Sir Nicholas Winterton and quotes an extract of his contribution to a debate in the House of Commons, as recorded in Hansard on on 7 July:

I am concerned about the elderly who need to use [xxxx]. Is [the Minister] concerned about the fact that elderly people, in particular, may not be getting value for money or a fair deal, because the system is so complicated that they do not understand how to go through it...?.
Of course you might imagine the xxxx refers to some element of the tax or tax credits system. It could so easily do so, couldn't it?! In fact Sir Nicholas was bemoaning the difficulties that the elderly have wi…

Do prostitutes charge VAT?

Back in 2002 a High Court judge ruled that the VATman is perfectly entitled to pursue prostitutes. Mr Justice Jacob decided that members of the world's oldest profession should not be allowed to exploit a loophole because of their illegal activities and avoid paying VAT. The case followed an earlier VAT tribunal ruling that an escort agency was unlawful and therefore could not be taxed. The tribunal said the business "consists wholly, or at least very substantially, of the procurement of women for the purposes of their becoming common prostitutes". When the tribunal found that the agency was "straightforwardly criminal", it meant that Customs and Excise could not claim VAT. The owners had always claimed their business was lawful but said their turnover was below the threshold for VAT. But the judge overturned the ruling. He said: "I conclude that this case is not within the very narrow rules which allow moral scruple by a paradox to reward criminality by…

Faulty accounting

The EU has set up a special commission to monitor all funds going to Bulgaria and Romania. My tutor told me a joke about this.

“When we were occupied by the Roman Empire, we destroyed them with our faulty accounting.

When we were occupied by the Byzantine Empire, we destroyed them with our faulty accounting.

When were were occupied by the Ottoman Empire, we destroyed them with our faulty accounting.

When we were occupied by the Soviet Empire, we destroyed them with our faulty accounting.

Now the European Union has set up these commissions to monitor our accounting and we will surely destroy the EU!”

As reported by a Peace Corps Volunteer currently serving in the Republic of Bulgaria.

Top 10 Reasons I Like Being An Accountant

A couple of months back the David Letterman show, which regularly features funny Top ten lists, asked ten US accountants (CPAs) to explain the top ten reasons that they like being an accountant.
Sadly there are a number of stereotypes in the list.

The long arm of the Australian Tax Authorities

Crocodile Dundee actor Paul Hogan is reported to have told Australian tax authorities to “come and get me”. This was after he learned in California that the Australian Taxation Office is asking the U.S. Internal Revenue Service to help round up nine years’ worth of records from three U.S. banks.
The actor told The Australian newspaper that the tax authorities are on a “long-distance fishing expedition” to get his financial records. Four companies related to him are allegedly part of the probe. But Hogan is defiant. “They should build a statue of me up there at the tax office,” he said to reporters outside his Santa Barbara mansion, according to wire reports.
Despite the tax probe, Hogan plans to return to his native country in September to shoot a movie. “I’ll be arrested the minute I land on the shore, of course, but I have a gun, so be warned,” he said to Australia’s Ten Network television channel.
With thanks to WEB CPA for spotting this one.

Taxation 3.0

I was chatting with John Stokdyk of AccountingWeb on Tuesday and mentioned a magazine that often publishes my quotes and advice on careers related issues for younger tax professionals.
It's called Taxation2 (to distinguish it from Taxation itself)

I liked John's suggestion that a more modern title would be Taxation 2.0 (two point zero).

We both then had the same idea. My Tax Advice Network is Taxation 3.0 (Not that we in any way compete with Taxation magazine!)

For anyone not quite following this - we were inspired by the references to the internet that have progressed from web 2.0 to web 3.0 in a very short period of time.

What would you search for?

I recently celebrated the first 'half-birthday' of the launch of the Tax Advice Network. I noted that over the first 6 months since launch thousands of searches have been performed on the site;

Perhaps the strangest search term was 'VAT on colonic irrigation'!

At what point do you enter or leave the UK?

I hesitate to share another Absurd Tax 'funny' so soon after the last one but it's worth it.

The tax rules for counting days of residence in the UK have changed recently making this question more relevant than ever before. Previously days of arrival and departure were not counted.

The new legislation includes a clear exemption for any day on which someone's presence in the United Kingdom is solely as a passenger in a part of an airport or port not accessible to members of the public unless they are arriving in or departing from the United Kingdom.

HMRC have therefore confirmed that changing planes in the UK (eg: on a flight from the USA to a European destination) would not be counted as a day of residence here - as if anyone could seriously have suggested otherwise.

So in the case of flight delays and trips in and around 5 April, how far do you have to get through the airport to have entered or left the UK? Assume you're leaving, is it enough to have gone through pa…

Anti Tax Man

An amusing idea was raised recently on The Magic Circle discussion forum (Yes - I'm a member although I don't perform as often as I used to; it's my age you know!)

We all make things vanish, transpose, appear, transform etc on a daily basis. What if you woke up one day & found you really could do this stuff? Maybe after being bitten by a radioactive magic rabbit?

No props, no gimmicks, just real magical powers

Would you simply become the worlds greatest magician? Or don a colourful costume & save the world from injustice?

If you chose the latter & became a super hero - what would you call yourself?

I thought I'd become 'Anti Tax Man'. Well, I couldn't call myself, SuperTaxMan could I?

Any better suggestions? Please add them by way of comments on this thread or by email.

Tax fees condom

This was almost the description ascribed to CCH new Premier Protection policy at its public launch last week.

I say 'almost' as nobody did quite describe the policy in this way. But Marketing Manager, Tori Moreton was hobbling around with her leg in a plaster cast. She explained that when it rained she had to wear what she described as a 'legdom' - which apparently is a tight rubber sleeve of some sort that keeps the water out and the plaster dry.

I can't recall who suggested that the new tax fee protection policy was a bit like a condom too!

Did the 2007/08 tax year end on Friday 4th or Monday 7th April?

The last day of fiscal year 2007/08 was Saturday 5 April and the first day of 2008/09 was Sunday 6 April.

Does it matter?

Well I recently heard an accountant talking about how it could be very relevant to one his clients who is affected by the new remittance basis rules. The client was planning to avoid making any remittances to the UK in 2008/09. He arranged his last remittance on Friday 4 April 2008.

However, although he instructed his bank to make the remittance on the Friday, and the money left his US bank account that afternoon, it did not arrive in his UK bank account until Monday 7 April.

Was it remitted on the 4th (in 2007/08) or on the 7th (in 2008/09) when it was received?

The sum involved was substantial. Would you credit it?!

Death is a serious business

Just before the start of a recent session of Matthew Huttons' excellent Monthly Tax Reviews (MTR), a discussion ensued as to the different names that some firms had for their Estate Planning teams.

One lady said that her group were called 'The Wills Girls' (or was that 'Willing'?).

My favourite though was the lady who said that her partners referred to her team as 'The Deads'. She also made a follow up comment that I didn't quite catch about her husband's view of this description. I'd best not speculate as to what he might have said!

I'd be grateful for further suggestions of unusual names for such teams, by way of comments on this thread or by email.

"From tax to taxidermy"

I saw this used to description the range of expertise that would be addressed in a new top quality business/lifestyle magazine:
4 Community.

I'm afraid I could see the connection immediately - just what most people want to do with the taxman. Stuff him!

Why is HMRC so keen on electronic filing?

This may be apocryphal of course but an ex member of HMRC staff told one of his friends that the reason should be obvious to us all.

If all returns were filed online it wouldn't be possible for HMRC to lose them - as still apparently happens with paper based returns (and CDs!)

Accountants and sex

The cover of the June issue of Accountancy magazine was adorend by what some have described as a 'racy' picture of a young lady in fishnets, high heels and a skimpy little black negligee. She was lounging on a red velvet backdrop holding a fan of playing cards with others scattered around her and one tucked into her garter.

Beneath the picture the first line was: New ICAEW President.
For the record, the new president is David Furst with whom I worked closely for many years during my time at Horwath Clark Whitehill. Indeed, David proposed me for partnership there.

A closer study of the cover reveals the real headline for the photo is further up the page:
Gambling tips -seducing the finance world.

I've just heard that readers in the Middle East are wondering why the authorities have removed the cover such that Accountancy is being distributed 'coverless' (or is that, 'topless'?).

Is this the first time that Accountancy magazine has been censored?

Not another boring accountant (part two)

I explained how and why I came to appear on Newsnight in a previous posting.
My actual TV slot comprised a very short magic trick (the self assessment pom pom stick) followed by me entering into the spirit of things, by being shown 'magically' changing from one outfit to another.. The idea was to provide examples to match the voice over - If not a magician then what next for the chartered accountant in films? So, through the wonders of television, as they say, they showed me magically transforming into a mad scientist then a James Bond style secret agent and finally a gumshoe detective.At the end I recall Peter Snow, who hadn't seen what we filmed, started his subsequent interview by saying.Of course, not all accountants are as entertaining as Mark Lee.How kind!

Traffic Wardens and Tax Inspectors

Imagine you are driving and see two people ahead of you who won't get out of the way. You recognise them as a local traffic warden and a tax inspector. If you had to hit one of them which would you choose?

Accountants would generally go for the Inspector of Taxes. After all, it has to be Business before Pleasure.

Thanks again to Keith Gordon for sharing that one with me.

The legend of Gutter Lane

Many years ago Coopers & Lybrand (now PwC) was simply called Cooper Brothers. They were originally based in Gutter Lane, London. Indeed they may have been the only building with an address identified as being in Gutter Lane.Legend has it that at one stage the partners wrote to the Corporation of London suggesting that in view of their long tenancy it might be appropriate to rename the place Coopers Lane. The Corporation, so the story goes, wrote back saying "as we've been here longer why don't you change your name to Gutter Brothers."Post script: When, much more recently, the Corporation was selling off at auction the old City street signs, Coopers bought the Gutter Lane set.

Had to happen

At the CIOT London Branch Dinner last night Keith Gordon feigned disappointment at finding himself again responsible for introducing the after dinner speaker. It seems he only knows one clean tax joke and he'd told it last year.

Keith said that had asked a contact at HMRC for ideas. Apparently the contact claimed to have such a big collection of tax jokes that he promised to send them to Keith on a CD.

Sadly it never arrived.

[In case anyone is still reading this blog long after 2008, you should be aware that there was a big news story in the UK earlier this year when HMRC lost 2 CDs' containing the personal data of 12 Million taxpayers. Thus Keith's joke was well received!]

Not another boring accountant

In 1997 I had my first call from the BBC. I was on the phone to someone else when my secretary rushed in to tell me that Newsnight wanted to speak to me.
I decided to take the call. My mind was racing. Could they have become aware of my expertise in advising on the changing basis of taxation and the introduction of self-assessment? Did they need a new media pundit to explain the Chancellor’s tax decisions in the budget. Did they want me to expand on a recent article I’d written in the accountancy press? In a split second I saw myself as a regular TV pundit explaining complex tax issues so that a TV audience could understand them. It never happened!
Apparently that morning there had been a full page feature in one of the broadsheets, as a result of a press release issued by one of the largest firms of accountants. It seems that they were sponsoring a new film in which they had insisted that the lead character would be a chartered accountant, rather than a solicitor. Then, as now, …

'Toff Tax' explained

From 17 May 2008 letters page of the FT:Sir, Peter Hahn suggests titles such as lordships should be offered openly for sale (Letters, May 10/11). This is a sadly regressive step that would ensure titles are allocated only to those who can afford them. These will be the same people who already receive substantial financial recognition for their labours. It would exclude equally deserving but less affluent members of society such as the proverbial postmistress.
A progressive system should be based on taxation. Acceptance of a title such as a peerage might command a 10 per cent surcharge on the higher rate of tax. Lesser honours might command a lower rate of tax. Honours would remain accessible to all in society but only funded by those who passed a certain financial threshold.
This annual “toff tax” would be a lucrative way for the state (not the party) to collect revenue to fund the political infrastructure we demand but will not fund ourselves. It will also allow those honoured to procl…

Life without timesheets

Hugh Williams FCA is the author of a book 'Life without timesheets' - which sets out how his practice embraced the idea and stopped charging by the hour many years ago.

I've just seen a copy of one of his other books (101 ways to grow your business) in which he shares a little ditty:
When accountants and solicitors charge by the hour
Clients moan about fees and relationships sour
So throw away timesheets
Fix the price of all you do
Bill 'em upfront and clients'll love you! Whilst I'm not as passionate about this as is Hugh I do know of an increasing number of firms who are 'trashing the timesheet' - at least in so far as they no longer use timesheets to determine the fees they charge.

I  have included several related items on my other blog for ambitious accountants.

Tax helpline in Australia

At an Ecademy event last night I heard about this helpline where callers are told:

1 - If you speak English - press one

2 - If you don't speak English - press two

Seems a bit of a catch-22 to me!

My thanks to Phillip Khan-Panni for the story.

Typos in the tax office

A tax partner had a tendency to incorporate Latin words and phrases in his advice letters to clients. Forgetting that his temporary secretary was less familiar with Latin than his usual PA he didn't check her typing before signing and sending a letter to a client. He had used the expression: "Ipso facto". Unfortunately this had been mistyped as "If, so Fatso". The client was not impressed!

Any more such examples?

More US quotes about taxes

"The income tax has made liars out of more Americans than golf." WILL ROGERS "Who is the figure behind every great man, the individual who knows his ultimate secrets? A father confessor? Hell no, the tax expert." LOUIS ARCHINCLOSS

"A tax loophole is something that benefits the other guy. If it benefits you it is tax reform." SENATOR RUSSELL B LONG "Taxation with representation ain't so hot either." GERALD BARZAN "I'm proud to be paying taxes in the United States. The only thing is - I could be just as proud for half the money." ARTHUR GODFREY

Tax Simplification

In 1965 the Chancellor (Jim Callaghan) introduced his Budget Speech with the prophecy that he would so simplify the system that accountants would be put out of business. The 1965 Budget is particularly memorable as it introduced two new concepts - Corporation tax and Capital gains tax.

Adam Broke recalls that the Chancellor's ambitions were thwarted by the inclusion in his proposals of "small minded concepts such as close companies". As a result, Adam, a newly married breadwinner, spent only milliseconds worrying whether he had chosen the wrong career.

It seems that little has changed as recent Budgets that have purported to introduce simplicity into the tax system are also bedevilled by undue complexity, oversights and 'small minded concepts'.

Adam's recollections appear in the May 2008 issue of the ICAEW Tax Faculty's Taxline publication.

GBH to English

Thanks to Trevor Johnson of CCH for reminding me of the following:

The press release following the 2007 Budget which referred to ‘Tackling worklessness in London’. Whatever happened to ‘unemployment?’ Perhaps it is too redolent of the 1970s? On the current self-assessment I am asked ‘Did you receive, or do we consider you to have received, income from a trust, settlement or a deceased person’s estate?’

My response would be ‘If you don’t know whether you consider me to have received trust income, how on earth should I know?’

Tax U-Turns

On 25 April 2008 edition of Have I Got News for You guest Ed Byrne highlighted an interesting phenomenon in the context of the Government U-turn re the 'abolition' of the 10p tax rate.

He said he couldn't understand what all the fuss was about. 'Why are we so critical about such U-Turns?' he asked. "The media highlighted how ill-thought out was the proposed policy change and demanded that it be withdrawn. The Chancellor appeared to listen and announced plans to mitigate the impact and compensate the 'losers'. "(Paul Merton interrupted to suggest that it's not nice to refer to the lowest paid people as 'losers'). "And then what happened? The media criticised the U-turn and slammed the Chancellor for his actions."

"I don't get it" said Byrne. "What do they want? It's as if they're saying - You idiot. What did you want to do a U-turn for? You shouldn't be listening to what people want. Much b…

Tax doesn't have to be taxing

Even without Adam Hart Davies the radio adverts still attempt to perpetuate this myth.

Tax doesn't have to be taxing but it will remain so as long as:

Politicians can talk about abolishing the 10% rate but keep it in place for savings income;The tax credits system uses different measures of income from tax return forms;New rules introduced to simplify the tax system increase the quantity of tax legislation;HMRC focus on collecting the maximum amount of tax due under the law whereas taxpayers continue to pay the minimum amount of tax due under the law;There is a difference between those two figures
It's no joke but it's quite fun thinking up more examples of why tax is taxing and will remain so. Please add further examples to this posting.

New non chargeable codes for your timesheet

5316 Useless Meeting
5318 Trying to Sound Knowledgeable While in Meeting
5393 Covering for Incompetence of Colleague
5400 Trying to Explain things to new colleague who just doesn't get it
5482 Eating Snack
5490 Updating status on Facebook
5500 Filling Out Timesheet
5501 Inventing Timesheet Entries
5640 Miscellaneous Unproductive Complaining
6200 Using Company Resources for Personal Profit
6206 Gossiping
6207 Planning a Social Event (eg: holiday, wedding, etc.)
6211 Updating CV
6221 Pretending to Work While Boss Is Watching
6238 Miscellaneous Unproductive Fantasising
6350 Playing jokes on the New Guy/Girl
7281 Extended Visit to the Loo (at least 10 minutes)
8100 Reading online blogs
8102 Laughing while reading blogs

Officers of Revenue and Customs

Following the merger of the Inland Revenue and Customs & Excise we should be used to references to Officers of Revenue and Customs. I'm grateful to Mike Truman, Editor of Taxation magazine for pointing out that this means they are ORCs.

And I've realised that, as the combined HMRC need combined powers for the ORCs to exercise, when we talk about their powers, we could use the acronym: PORCS

This could lead to ORCs using their PORCs to identify when taxpayers have told Porkies.

George Carman

When the comedian Ken Dodd was charged with tax fraud in 1989 he vetted a string of barristers before eventually telling his solicitor that he wanted to see George Carman. This proved to be a wise move.

The case bore many of the hallmarks of a typical Carman performance: a famous defendant, seemingly incontrovertible evidence and a sensational acquittal. The result owed much to Carman's deftness at arguing that comic genius and careful accounting were strangers.

He encapsulated the hypothesis in a phrase that he rightly judged would strike a chord with the jury: "Some accountants are comedians," he said. Then, after a pause: "But comedians are never accountants."

With thanks to Keith Gordon of Atlas Chambers for reminding me of this story and quote.

HMRC forms

I am reminded of a quote that I saw at the 200 years of Income Tax exhibition from the 1850's as to how the revenue authorities even then were minded to produce forms that were so unintelligible that it was beyond comprehension how it was expected that ordinary members of the public should be able to complete them accurately.

Thanks to Stephen Dowers for this recollection

Freedom of information - exemptions for HMRC

I had to post this somewhere. Say you have a suspicion about what may be a fake National Insurance number. You go to HMRCs manual to read the section about what to do if you suspect fraud. This is what you'll find.

The page is headed:
NIM39140 - National Insurance Numbers (NINOs): Format and Security: What to do if you suspect or discover fraud

Tax Revolt

Hats off to the game boys at Accountancy Age. Their new online game involves zapping the Chancellor as he pops up and down all over the Chamber in the House of Commons. Every time you miss the CT rate goes up by 1%. It drops again each time you hit him.

This is not an endorsement! It'll zapp your time but it qualifies for inclusion here as it's a bit of fun.

Accrual world

Just came across an online Sci Fi novel, Accrual World, written by Andy Blackford.

The novel explores a world where accountants have been banned and forced to go underground to help impoverished businesses survive in the resulting chaos. This wry look at an Orwellian world is apparently a year-long project written for accountants whose thoughts and inputs are warmly welcomed on the accrual world blog.

You can access pdf chapters and a summary of the book on theaccrual world website.

The top 10 signs you need a new accounting system

The top 10 signs you need a new accounting system are:

10. The service technician keeps threatening to retire
9. “Reconciliation” is your middle name
8. You ask for “proficiency in DOS” when hiring staff
7. When calling Support you hear laughter in the background
6. Salesmen no longer call you about upgrades
5. You have to go for coffee whenever you click on “Post”
4. Your system came on diskettes
3. The last person to know the setup password retired to Florida
2. Nobody understands the reports

and the top sign you need a new accounting system is . . .

1. Your sub-ledgers need counselling for “irreconcilable differences”

With thanks and credit to Bill Kennedy

April fool tax rise announced for caravan owners

1 Apr
The caravan tax is justified on the basis of the economic loss to the country caused because of the build-up of slow-moving queues of traffic, especially in country areas, due to caravans. The Government's press release claims that not only is excessive fuel used and time lost, but many accidents are caused when frustrated drivers try to overtake slow-moving caravans. The Chancellor claims that the revenues raised by the tax (£250 pa per caravan) will be used to improve roads in areas which suffer most from caravan congestion.A spokesman for the Caravan Club predicted that its normally-placid members might feel they are being backed into a corner by the Chancellor, and predicted a summer of disruption as furious caravanners drive even more slowly in protest over this discriminatory measure. It is said that politically active elements of the caravan fraternity are considering organising a blockade of the M5 on bank holiday weekend in protest (not that anyone would be likely t…

April fool tax rise announced on gum chewers

1-Apr In a late addition to the Finance Bill, Chancellor Alistair Darling has proposed two new taxes, both said to be based on a desire to have a 'greener and healthier' Britain.The chewing gum tax will increase the cost of a packet of chewing gum to £4.50 from April 2009. This tax (as well as similar massive increases in the tax on chewing tobacco and Betel nuts) has been justified on the basis of the huge cost of gum removal and the public health issues raised by products that encourage public expectoration - said to be one of the main factors behind the rising number of cases of tuberculosis.These measures are contained in the Treasury Order for Safeguarding Health (TOSH) of 1 April 2008.Conceived by Joe Reevey of Conscious Solutions

Sir Nicholas Montagu on University Challenge

Just came across this old story featuring the then Chairman of Inland Revenue - before the merger with Customs & Excise that created HMRC. My two year term as Chairman of the ICAEW Tax Faculty overlapped his tenure so I had the pleasure of meeting him on several occasions.
In 2002 the then chairman of the Inland Revenue was left red-faced on TV's University Challenge by a rather taxing question about VAT. Sir Nicholas Montagu failed to work out a simple sum which asked him to calculate 17.5% of a given figure.He was appearing on University Challenge Reunited, which brings back champions from previous years, with team-mates from New College, Oxford.The 1964 title holders were competing against 1994 winners Trinity College, Cambridge in the BBC2 quiz show.When the tax question came up, Montagu struggled to work it out while Cambridge instantly buzzed in with the correct answer, much to the amusement of host Jeremy Paxman. 'I would have thought you would get that, being head…

Me, myself and I

Another story courtesy of Nichola Ross Martin, who is a tax adviser.

Apparently she was told many years ago by the Inland Revenue, as they were in those days, that as a sole practitioner she could not discuss her own personal tax affairs without a 64-8.
As Nichola explains:“I started to explain that I was me, but got nowhere and I duly obliged and made myself my own agent. I still represent myself as it goes!Something that amuses me in a small way is that my reference with me is MYSELF. I did it like that so it would stand out and I wouldn't put the post in the wrong hands, but always do a double take when I see it and have a giggle.”

All in a name...

Nichola Ross Martin tells the story that:

I have been calling myself a tax consultant for years rather than an accountant. I did call myself a tax advisor once when an old school friend asked - she misheard though and thought I said "Taxi driver" so I don't use that one any more!

[Repeated with permission]

Do you know an Accountant PUPPY?

In a poll for phoneline 118118, over 80% of young professionals said their mother's advice had more impact than getting a bonus, better hours or job security.

It calls each of them a PUPPY.
(Professional yet Unprepared Person Post-Youth)

Is this the way to do an audit?

Spoof of the Peter Kay version of the Tony Christie Classic. Includes a number of novel rhymes and a bunch of methodologists from PwC. Methinks it may not be an officially sponsored film. Watch out for the robotic antics of the last guy through the swipe gates just before the end.

The magic golden fish

A tax inspector arrived at the front door of a magnificent 8 bedroom mansion in the depths of the countryside.

"How have you managed to buy this luxurious mansion whilst your income is so low?" he asked the market trader who lived there.

"Well" replied the trader, "When I was fishing last year, I caught a golden fish. When I took it off the hook the fish looked at me and spoke. It said: 'I am a magic golden fish. Throw me back in the water and I'll give you the most luxurious mansion you have ever seen.' I threw the fish back into the water and got the mansion."

The tax inspector looked at the trader suspiciously. "And what proof do you have, to convince me that this preposterous story is true?"

"Well, you can see the mansion can't you?"

Ever been 'very satisfied'?

Herbert had worked for a well-known accountancy firm for some years, but had now obtained a position with another firm. He asked the firm he was leaving for a reference with the phrase 'very satisfied' in it. The firm supplied a reference that stated that Herbert had worked for the firm for X years, and that they were very satisfied that he was now leaving and had found another position.

(Thanks to John Newth for passing this one to me)

Adam Hart Davies sacked by HMRC

Following his recent public criticism of HMRC it has been announced that his reign as the front man for HMRC media adverts has come to end.He has lasted five years, and succeeded Mrs Doyle, the tea lady from the Father Ted comedy show. The first such character was a cartoon.
I still remember speaking at the ICAEW annual conference in 1997 and explaining to the audience that the cartoon taxman was to have been called ‘Hector the Inspector’. However just before the campaign launched someone at the Revenue had checked the dictionary definition and noted that “to hector” meant ‘to bully or torment’. As these were not qualities with which the Revenue would want to be associated, the name was officially dropped. Sharing the platform at the conference was a senior Revenue official, Sam Mitha. He spoke after me and immediately disputed my version of events. I was astonished until he ‘explained’: “… evidently Mr Lee is mistaken as I can assure you that Inspectors of Taxes do not have access to …