A dozen laws of accountancy that weren't covered in your studies

1. Trial balances don’t. (Not always, anyway)
2. Working capital does not. (Work, that is)
3. Liquidity tends to run out. (Faster than you think)
4. The bottom line is only the tip of the iceberg. (What lies beneath matters more)
5. Depreciation is inevitable. (For assets and accountants)
6. Forecasts are mostly fiction. (But we make them anyway)
7. Profit is an opinion, cash is a fact. (Ask any struggling business)
8.        The auditor is always right. (Especially when they say you're wrong)
9.        A budget is a wild guess wrapped in spreadsheets
10.        There is nothing more permanent than a temporary account
11.        An accountant is a person who will explain that you did not make the money you thought you had
12.        If in doubt, reconcile. (Then reconcile again)

What is Cross tax?

You'd be forgiven if you've never heard of 'cross tax' although it's been referenced in HMRC's compliance handbook for many years.

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? 

c) How clients will describe the additional fees accountants charge for quarterly MTD returns? or 

d) 'Across the taxes’ as opposed to applying to just one area, such as corporation tax? 

The correct answer is (d)

Image ideas for an accountants' website

Years ago an architect blew me away by showing me a few photos on his smartphone during a networking event. They reinforced what he was saying about the style of houses he had designed for clients.

How might accountants do something similar? 

The following list does not contain the most serious of suggestions!

The car parking spaces reserved for clients behind your office in the centre of town? 

Proof that you make life easier for clients 

An officer from HMRC looking bloodied and bruised after a long meeting during which you successfully defended a client's tax position? 

A (hopefully metaphorical!) demonstration of how fiercely you fight your clients' corner. 

 Your burly-looking partner - the one who gets sent to negotiate with the taxman? 

Visual proof that your firm doesn’t back down easily when it comes to protecting clients. 

A calculator with a worn-out keypad

Evidence that behind every great accountant is a calculator hanging on for dear life. 

 

A picture of your team burning the midnight oil before a big deadline. 

Because clients don’t always see the long hours you put in to make their lives easier. 

 

Your “red pen of doom” used to mark up dodgy client expense claims! 

Evidence that, no, your client cannot claim their holiday to Ibiza as “research.” 

A “Not Today, HMRC” coffee mug

A subtle reminder that you know exactly how to keep tax officials in check. 

 

A motivational poster on your office wall: "Some People Dream of Success. Accountants Reconcile It." Because even accountants deserve an inspirational quote (especially one that’s actually true).

When all is not as it seems

The company HR director and CEO had carefully interviewed a dozen 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 £120,000 a year. 

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

When the taxman chases the recently departed

A few weeks after Bernie died, his sister, Susie, intercepted a letter sent to him by HMRC. It was a request for a tax return.

Susie took the letter to her accountant who, after asking a few questions, suggested she reply as follows and pp the letter 'from Bernie (deceased)':

One of the advantages of having died is that there is no tax in heaven. It's a beautiful place. When I was alive I paid tax through the PAYE system and had not had any direct dealings with the taxman for many years. I can't say I'm that fussed about the outstanding return as I had no unearned income and left very little in the way of an inheritance for my sole living relative, my sister. Also, such matters seem so mundane since my recent demise. I might add that I have not yet met anyone from HMRC up here!

How to persuade the taxman your dog is a tax deductible business expense

Many years ago a publican had a meeting with a tax inspector in his pub. The publican had been claiming tax relief in respect the upkeep of his 'guard dog' but the taxman was unwilling to concede that this was acceptable.

The publican pointed out that upstairs in the pub were both the dog and the lunchtime takings. He invited the taxman to go upstairs, on his own, and if the taxman returned with the takings the publican would agree to add back the disputed expenses.

The taxman refused to go upstairs and allowed the expense in full.

My thanks to Barry Jefford of George Hay, Chartered Accountants, for the story which was told to him by his client, being the publican in question.

Valentine messages for the accountant in your life

Debits are left
Credits are right
When I looked at you
Love at first sight.

----

I’d adjust any entry
To keep us aligned,
Because in the ledger of love,
You’re one of a kind.

----

Without you, my life would be like a one-sided journal entry - unbalanced and incomplete.

----

Let’s capitalise on our love and carry it forward forever.

----

Roses are red
Violets are blue
My heart’s net profit
Will always be you.

Popular Google searches about tax

Listed below are some of the suggestions from Google based on popular searches 

Why is tax.... 

                 ... so high in the uk? 

                 ... year April to April?

                 ... important? 

                 ... law so complicated?

                 ... reform needed?

                 ... deducted at source?

                 ... theft?

                 ... avoidance legal?

                 ... avoidance unethical?

                 ... going digital?

What is tax...

                 ... deductible?   

                 ... planning?

                 ... residency?

                 ... relief?

                 ... on savings?

                 ... on capital gains?

                 ... on gifts?

                 ... for self employed?

                 ... avoidance?   

                 ... evasion?   

Famous classic films remade especially for accountants

Star Wars: Tax Return of the Jedi

Double Entry Indemnity, shown with: Double Insolvency

Journal to the Centre of the Earth

Abridged Too Far

Audit About Eve, and the follow up: Auditors of the Lost Ark

Trial balance of the century

VAT on a Hot Tin Roof

Evasion of the income snatchers

Far From the Adding Crowd

The Returns Of The Pink Panther

The Jungle Bookkeeper

Close enough encounters

Indiana Jones And The Ledgers Of Doom

Fatal subtraction, and the sequel: Fatal deduction

Why do people leave filing their tax returns to the last minute?

As we approach the 31 January filing deadline for filing personal self assessment tax returns, I asked a few taxpayers why they leave things to the last minute. A selection of their replies follows: 

Flights to Panama are cheaper in January. 

I've made HMRC my best and only deal available. It's their choice to either accept it, walk away, or it's no deal.

Fear of figures 

My girlfriend said she'd do it for me 

HMRC = Hold Money Past Christmas, I Have Many Reliefs to Claim or Hope My Rebate Comes 

I know exactly when the last minute is. The first minute though...? 

If it wasn't for the last minute I'd never get anything done. 

I've got plenty of time as the last minute isn't due for another 4 or 5 billion years.

Are accountants the best patients for surgeons to operate on?

Five surgeons are discussing who makes the best patients to operate on. 

 The first surgeon says, "I like to see accountants on my operating table, because when you open them up, everything inside is numbered." 

The second responds, "Yeah, but you should try electricians! Everything inside them is colour coded." 

The third surgeon says, "No, I really think librarians are the best; everything inside them is in alphabetical order." 

The fourth surgeon chimes in: "You know, I like builders...those guys always understand when you have a few parts left over at the end, and when the job takes longer than you said it would." 

But the fifth surgeon shut them all up when he observed: "You're all wrong. Politicians are the easiest to operate on. There's no guts, no heart, and no spine, and the head and backside are interchangeable."