Who knows what ACA stands for?

Assume you didn't know that an ACA is an Associate of the Institute of Chartered Accountants in England and Wales (ICAEW). What would you find out if you looked online?

Here is just a selection:

• The Affordable Care Act ACA), formally known as the Patient Protection and Affordable Care Act (PPACA) and colloquially known as Obamacare,
• Ambulance Care Assistant - this role involves the transportation of non-emergency patients to and from hospital and clinic appointments.
• ACA is the representative body for UK consulting actuaries 
• ACA Sports Limited, a UK based online sports shop stocking Football Boots, Football Shirts, Team Kit, Footballs, Shin Guards, Goalkeeper Gloves and Clothing 
• Association for Continence Advice (ACA) - organisation for health and social care professionals concerned with the progression of care for continence. Methinks someone is taking the proverbial! 
• Adult Children of Alcoholics 
• Australian Croquet Association and, confusingly, the Australian Cricketers' Association
• Asynchronous Criticality Avoidance 
• All Calls Answered is a common meaning for ACA on online dating sites, such as Craigslist, Tinder, Zoosk and Match.
• Alcohol, Condoms & Attitude are apparently the three factors necessary for any episode of The Jersey Shore.

Who knew?

Is Santa a tax avoider?

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]

'Last Christmas' as sung by a tax inspector

Last Christmas, I sent a demand

But the very next day, you appealed it away 

This year, to get us some tax 

I'll investigate and ensure you pay 

 (Chorus) 

Once bitten and twice shy 

I want your records, but you just seem to lie 

Tell me, taxpayer, do you recognize 

The mess you've made with your financial lies?  

Last Christmas, I filed a report 

But the very next day, you sent it away 

This year, to save me from tears 

I'll start a COP9 and make you obey  

Crowded offices, filled with paperwork 

Hidden incomes, we'll make it work 

I'll trace the money, follow the trail 

Your tax games won't let you prevail 

Last Christmas, you thought you were slick 

But the very next day, I uncovered the trick 

This year, to save me from strife 

I'll ensure you pay your fair share in life  

Some credit is due to ChatGPT for this. 

The 12 taxing days of Christmas

A few years ago  Emily Coltman of FreeAgent analysed the tax consequences of every one of the gifts mentioned in the classic song “The Twelve Days of Christmas”.

Emily imagined that the minstrel, whose "true love" gave all these gifts, needs help completing a tax return. 

What, imagined Emily, would be the income tax and VAT rules applicable to the gifts that make up the famous festive menagerie?

What follows is just a sample from some of the explanations. In each case Emily provides rather more detail than is appropriate for this fun blog ;-) 

A partridge in a pear tree This is what HMRC call a “mixed supply” for VAT, because it’s goods with different VAT rates supplied together. The pear tree is zero-rated for VAT, while the partridge, as an ornamental bird, would be standard-rated.  

Three French hens When goods of any kind are brought in from the EU and bought by a business that’s registered for UK VAT, the business has to work out and account for the VAT they would have paid if the item had been bought in the UK. 

Five gold rings If you’re buying an antique gold ring or other piece of second-hand jewellery, how would the seller work out VAT?

Six geese a-laying HMRC goes into a serious level of detail on this. The basic rule of thumb is that poultry kept for their meat or their eggs would be zero-rated for VAT, whereas ornamental birds would be standard-rated.

Eight maids a-milking Milkmaids need to live on the farm in order to be able to do their work properly; in order to do the morning milking they have to get up very early, and so it wouldn’t be practical or possible for them to commute. That means that the farmer can provide the milkmaids with living accommodation free of tax and National Insurance. 

Nine drummers drumming A drummer would have to buy his or her costume to perform in.  That might be a kilt, jacket and plaid for a drummer in a pipe band, or a suit for a jazz band drummer, and so on. He or she can then claim tax relief on the cost of that costume, because a costume for a performer is tax-deductible. 

Twelve lords a-leaping What would be the tax implications if these lords a-leapt out of the country? It depends why they’re a-leaping out and for how long.

When a young accountant bought a donkey

Many years ago a young accountant, Warren, moved to the country and bought a donkey from an old farmer for £200. 

The farmer agreed to deliver the donkey the next day. 

When he drove up the farmer said: "Sorry son, but I have some bad news. The donkey died." 

Warren replied, "Well then, just give me my money back." The farmer said, "Can't do that. I've gone and spent it already." 

Warren said, "OK, then just unload the donkey." The farmer asked, "What ya gonna do with him?" Warren replied: "I'm going to raffle him off." Farmer: "You can't raffle off a dead donkey!" Warren was insistent: "Sure I can. Watch me. I just won't tell anybody he is dead." 

 A month later the farmer met up with Warren and asked, "What happened with that dead donkey?" Warren replied: "I raffled him off. I sold 500 tickets at £2 a piece and made a profit of £800." 

 The farmer was astonished: "Didn't anyone complain?" Warren replied: "Just the guy who won. So I gave him his £2 back." 

 Rumour has it that some years later Warren returned to the City and joined one of the largest firms of accountants, where he eventually became senior partner.