After 2 years, it took just 2 minutes to resolve this HMRC query

 This is a true story about a tax dispute that went on for two years before the underlying issue was clarified. It made me smile.

An Inspector of Taxes was explaining to me that the owner of the small business had been refusing to co-operate. As a result a relatively straightforward tax dispute about a tax scheme was heading towards the first tier tax tribunal.

It was when the case was reviewed and a new Inspector contacted the taxpayer that the REAL issue became apparent. The taxpayer had misread a letter from HMRC which referred to his involvement in an abusive tax arrangement. 

The taxpayer thought that HE personally was being accused of ABUSE and he resented this. In the event a simple apology from HMRC for the misunderstanding enabled negotiations to commence properly and the dispute was later resolved without the need for a formal hearing.

I didn't find out whether it really was the taxpayer who had misunderstood or if the original letter from HMRC was poorly worded. Who knows?!

Rudolph and the Revenue

Rudolph the red-nosed reindeer 

Hated paying NIC 

Went to a sharp adviser 

Paid the man a hefty fee 

He told the other reindeer 

You should do the same as me 

Go and see my adviser 

Get yourself a PSC 

Then one foggy Christmas eve

the taxman came to say: 

"Your idea was not so bright 

You owe tax, you're banged to rights" 

So all the deer were bankrupt 

Didn't have a bean they said 

Now taxman's after Santa 

He'll be really in the red. 

 Written by Chris Williams and first published in Taxation magazine 20 December 2007

If Santa was an accountant.....

 If Santa was an accountant...

• ...he would report true and fair (naughty and nice)
• ...he would collect receipts for subsistence from the secret 'other' Santas who service other countries
• ...all of the kids clothes would be from "Baby GAAP"
• ...his helpers would work in a small room cranking out toys during 'present season' which gets longer every year.
• ...letters to Santa would be carried forward from prior year
• ...he'd probably moan about all the red tape he has to deal with
• ...his family still wouldn't have a clue what he does at work
• ...he would think about the mileage deduction for his reindeer drawn sleigh
• ...you'd only have to be 'materially' good to get 'substantially all' of your gifts
• ...most of the insignificant things on your wish list would be disregarded and "noted for next year"
• ...he would give you review comments on your christmas list
• ...he wouldn't get paid overtime but his elves would
• ...it wouldn't be called a gift list, it would be a request list and listed in order of importance.
• ...he'd have to follow those Hobby Loss Rules. Not much profit in the Santa business :-)
• ...he'd divide the world's children into assets and liabilities
• ... there would be 4 big Santas

This is a selection of the suggestions volunteered by users of twitter in response to an invitation to use the hashtag: #ifsantawasanaccountant

Santa's tax satus

 A few year's back. Taxation magazine published this enquiry from a reader:

On a visit to the UK last year I picked up a copy of your magazine and wonder if readers can advise me. I am non-domiciled and non-resident (I think) in the UK – no permanent home here – but each year I work temporarily in the UK for a short period.

The work is unpaid, but I do receive benefits in kind; glasses of port, mince pies and the like. I am rather concerned that I have not declared these to HMRC in the past. Should I have done so and is there an annual tax liability to be paid on these gifts or benefits? And if there is, how is the tax calculated under self assessment?

The chosen pseudonym is "S. Claus".   

I wonder what advice one would give him for 2023?

The 12 days of Christmas or Taxmas (a reworked xmas carol)

 First line: On the first day of Taxmas the taxman sent to me:

- A rejection of my time to pay plea

The second verse:

On the second day of Taxmas, the taxman sent to me
- Two demand notes and
- A rejection of my time to pay plea

...and so on.
The last verse is:

On the twelfth day of Taxmas, the taxman sent to me
Twelve months to pay my debt
Eleven penalty charges
Ten confusing statements of account
Nine booklets on 'How to complain'
Eight explanatory leaflets
Seven website links
Six excuses for the delay
Five more queries
Four VAT returns to file
Three blank tax returns
Two demand notes and

One reluctant acceptance of my time to pay plea.

When I had the idea for this I checked online and found there was an old US version of the 12 days of Taxmas. Mine was developed independently.