Skip to main content

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]
Post a Comment

Popular posts from this blog

How many accountants does it take to change a light bulb?

How many accountants does it take to change a light bulb?




How many would you like it to be?

How many accountants does it take to change a light bulb?




What kind of answer did you have in mind?

How many accountants does it take to change a light bulb?



Hmmm....let me run a few numbers and get back to you....

How many accountants does it take to change a light bulb?



Two. One to change it and one to make sure it was done within budget

And lastly, my favourite:

How many accountants does it take to change a light bulb?



One, but he'll have 1500 of them to do on 31st January.

(This response was suggested by Adrian Higgs)

Are you a prostitute or are you an auditor?

1. You work very odd hours.

2. You are paid a lot of money to keep your client happy.

3. You are paid well but your pimp gets most of the money.

4. You spend a majority of your time in a hotel room.

5. You charge by the hour but your time can be extended.

6. You are not proud of what you do.

7. Creating fantasies for your clients is rewarded.

8. It's difficult to have a family.

9. You have no job satisfaction.

10. If a client beats you up, the pimp just sends you to another client.

11. You are embarrassed to tell people what you do for a living.

12. People ask you, "What do you do?" and you can't explain it.

13. Your client pays for your hotel room plus your hourly rate.

14. Your client always wants to know how much you charge and what they get for the money.

15. Your pimp drives nice cars like Mercedes or Jaguars.

16. Your pimp encourages drinking and you become addicted to drugs to ease the pain of it all.

17. You know the pimp is charging more than you are worth but if the client…

When downsizing doesn't go quite as planned

The partners in a 20 strong accounting firm decided to downsize.
Half of the staff were duly handed their redundancy notices. The letters left them in no doubt the firm would be better off without them.

Selecting the half to make redundant had been a no-brainer for the partners: the firm was staffed by a mixture of very competent young people at various stages of training, and a motley crew of duffers who were mostly a waste of space. Some even had quirks that made them automatic choices: there was one guy who always arrived at the crack of dawn each morning - only to spend an hour on expensive sex chat-lines! And a twenty-something female who looked as though butter wouldn't melt, but was transformed into a door-slamming Banshee whenever told to go work on-site.

One of the staff who had been selected to stay, was recently qualified, and had just been head-hunted by his former mentor, a Big 4 Partner branching out with his own practice. Promoted to manager and charged with staffin…