Ken Dodd's tax case

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."

10 years since Jimmy Carr's tax scheming made the news

In 2012, after Jimmy Carr was exposed as a tax avoider and then apologised for his 'grave error', fellow comedian, Sean Lock, generated some great laughs at Jimmy's expense on the TV show '8 out of 10 Cats':

- We all like to put a bit of money away for a rainy day. But you're more prepared than Noah!

- There's a new tv show you could do: 'Through the Loophole'. "Who lives in a tax haven like this?" 

- You've got an illness. You're suffering from tax intolerance. You might even be HMRC positive.

Gary Barlow of 'Take That' also come for a little stick.

Sean said the band is now known as 'Keep That'.

And Jon Richardson concluded that Gary's OBE stands for 'Offshore Banking Expert'.

Jimmy Carr himself admitted that it was all very complicated but that as a result of his offshore agreements he feared that he is now a member of 'Take That'.

10 famous people who nearly became accountants

All of the following trained to be accountants - in some cases, not for very long but found fame through other talents and skills:

1. Arnold Brown - "Possibly the only Glaswegian Jewish ex-chartered accountant stand up comedian in the world".
2. Eddie Izzard - failed accountancy student who turned to surreal stand-up comedy and acting. His father was Harold Izzard, a former president of the institute of internal auditors and chief auditor of BP.
3. Robert Plant - gave up accountancy training to sing for the rock band Led Zeppelin.
4. David Graveney OBE - former chairman of the England Test selectors (1997 until 2008).
5. John Grisham - the novelist is well known for being a lawyer prior to his writing career. His first degree however was in Accounting from Mississippi State University.
6. Bob Newhart - American funny man who got his first job out of the army working as an accountant in downtown Chicago.
7. Alan ("Fluff") Freeman - DJ Alan Freeman worked as an assistant paymaster/accountant for one of Australia's largest timber companies after leaving school.
8. Pádraig Harrington - the Irish professional golfer passed his final exams in 1994 to gain admittance to ACCA.
9. Fred MacAulay - the Scottish Comedian graduated from the University of Dundee with an MA in accountancy and jurisprudence. He went on to work as an accountant in a number of companies before moving into Comedy.
10. Ron Moody - British actor probably best known for playing the part of Fagin in the stage and film versions of Oliver, he originally trained to be an accountant at the London School of Economics.

Tony Hancock - The Income Tax Demand

This classic half hour radio episode first originally aired on 4 November 1956.

Tony Hancock receives a tax demand for £14 12s 3d re ten years' back tax. He refuses to pay as that represents 50% of his income over the period! (Even fifty years ago this would have been a tiny amount!) so he goes to see the Inspector - played by Kenneth Williams.

The inspector tells Hancock that most people ignore his letters. Once they've been ignored twice he ignores the taxpayers! He also recommends that Hancock should go to see a Chartered Accountant "you'll probably get away with it then!". Hancock takes his advice but the accountant turns out to be a crooked Sid James and mayhem ensues.

Bob Newhart's quotes about accounting

American funny man Bob Newhart originally trained to be an accountant.

He explains that when attempting reconciliations he reckoned that:

"as long as you got within two or three bucks of it, you were all right. But that didn’t catch on … At the end of the day I had to balance the petty cash with the slips—every time you give out money you had to get a slip. It had to balance. Well, I’d be there for three or four hours tying to figure out where the last dollar or dime went to. So finally I’d just take it out of my pocket and I’d put it in. If there were two dollars leftover, I’d take it out … And they told me you can’t do that. You gotta find it. I said, “you’re paying me five dollars an hour to find two cents—it doesn’t make sense.” So I wasn’t a very good accountant."

His 1988 biography quotes Newhart as saying that if he hadn’t taken a gamble with comedy he would still be an accountant:

“Keep in mind, when I started in the late fifties, I didn’t say to myself, ‘Oh, here’s a great void to fill—I’ll be a balding ex-accountant who specializes in low-key humor.’ That’s simply what I was and that’s the direction my mind always went in, so it was natural for me to be that way.” 

Other accountancy related quotes attributable to Bob include:

I worked in accounting for two and a half years, realized that wasn't what I wanted to do with the rest of my life, and decided I was just going to give comedy a try. 

Probably the best advice I ever got in my life was from the head of the accounting department, Mr. Hutchinson, I believe at the Glidden Company in Chicago, and he told me, 'You really aren't cut out for accounting. 

I've been told to speed up my delivery when I perform. But if I lose the stammer, I'm just another slightly amusing accountant. 

The truth is, I look like an accountant, which was my trouble. I looked the part of an accountant, so I’d get hired as an accountant even though I got my degree in management.”

Rants against Tax Dodgers from The Last Leg

The clip below, from The Last Leg tv show includes some funny rants against those who avoid tax and accountants who promote tax avoidance schemes!

Bad language alert!

David Mitchell's funny explanation of tax avoidance

There are some great quotes in this clip which sees David Mitchell answering questions about tax avoidance during an interview on The Last Leg TV show in 2105.

"Vanilla flavoured. Less than vanilla, unflavoured tax avoidance"

At the other end of the spectrum, "Gary Bartlow's evil flavoured" tax avoidance

Tax avoidance involves "50 shades of grey. And that's not an ice cream flavour anyone wants!"

"Legal loopholes allowing tax avoidance mean the government is “taxing conscience” – the more of a conscience you have, the more you pay – and that isn’t right"

"We're taxing being nice"

Bad language alert in this clip:

John Challis on why he didn't become a tax inspector

John Challis tells the story that in the late 1970's he was summoned by one of her Majesty's Tax Inspectors to discuss his meagre contribution to the Inland Revenue.

John notes that he sat before a middle-aged grey suited man who had obviously not seen the light of day for some time and, after a few minutes silence, the Inspector looked up and said: "You seem to be remarkably unsuccessful in your chosen profession, why don't you give it up and do something more rewarding?"

John thought for a moment and replied: "What? You mean become a tax inspector or something?"

"There's no need to be offensive," replied the Inspector.

John says he's rather glad he didn't follow the Inspector's advice. [Since then he's gone onto star as Boysie in Only Fools and Horses and in the spin-off sit com The Green Green Grass]

The bar at the Taxation Awards

Stephen Mangan was the host at last week's Taxation Awards. This is an annual event for 600 of the UK's top tax advisers - and a few hangers on like me.

Mangan did a superb job. Worth a mention on this blog were his observations after he announced that following the awards ceremony there would be a cash bar.

"A cash bar? At the Taxation awards? Make sure you keep your receipts!"

Oh well. maybe you had to be there...

Outrageous pop stars do it to avoid tax

The Swedish pop group Abba are reported to have admitted in a book, that the outrageous outfits they wore on stage in their heydey were chosen to avoid tax.

It seems the Swedish tax code is similar to that of the UK when it comes to claiming tax relief for clothing. To ensure that their stage outfits were allowable deductions the costumes had to be so outrageous that they couldn't be worn on the street. Apparently many Swedish bands made as habit of dressing as flamboyantly as possible.

Reflecting on the group's sartorial record in a new book, Björn Ulvaeus said: "In my honest opinion we looked like nuts in those years. Nobody can have been as badly dressed on stage as we were."

Clearly Bjorn has forgotten about the British glam rockers of the 1970s - many of whom wore equally outrageous outfits.  I'm thinking of the Sweet, T-Rex, Slade - there are many such examples from my youth. Who'd have thought they chose their outfits to avoid tax?!

And, even though this is my 'lighter side' blog, I should stress two points:

1. I doubt that the facility to deduct the cost of stage costumes from their earnings was uppermost in many minds at the time - other than perhaps that of Abba. 
2. Why are the media reporting this as tax avoidance anyway? All the band did was to ensure that there could be no argument that their stage clothes qualified for tax relief. Any sensible person does the same thing as regards all genuine business expenses.

Rod Liddle's innovative ideas about tax planning

I came across this wonderful expose on the Sage Exchange, Accountancy community blog. Rod Liddle is a guest writer there and, in an intro piece about his own approach to accountancy and tax, he explains his attitude to tax planning as follows:

"In the short-term I've tried to interest my accountants in reconfiguring Friar Luca Paciolis' famous formula for double-entry bookkeeping to incorporate two new values when calculating my tax bill: n, which represents a sum of money to be deducted from my taxable income based upon how nice I have been to people during the year, as estimated by myself, and x which represents a sum of money I have received from somewhere and do not wish the tax people to know about.

So the re-written formula would read: Assets = L+C-D-N+R(-X)-E. 

I firmly believe that this innovation is the single greatest contribution to accountancy since the renaissance (and, with respect to Fra Pacioli, perhaps before), and I suspect that all of your clients will agree when they see those nice subtraction signs in the formula.  

I should not really claim sole credit for this innovation as I have drawn on important pioneering work by certain accounting experts (I refer you to studies by K. Dodd, L. Piggott and especially ground-breaking work in the US from W. Snipes). 

I've already mentioned it to my accountant but he got that horrible weary look on his face and at one point suggested I take my business elsewhere."

You can read the full piece here >>>

If Santa suffered an audit.....

ParenteBeard, a top 25 U.S. accounting firm, is helping to balance the books of what would be the largest non-profit in the world: Santa, Inc. The following notes are extracted from the related Press Release which goes into far more detail.  They have been described as 'Reckless Santanomics on CNN (see video below).

While Santa’s magical powers eliminate many of the typical business fundamentals such as production and employee costs, ParenteBeard analysed what it would take to actually operate Santa’s North Pole. They determined that it would cost 42.3 billion dollars to operate Santa, Inc. annually.

ParenteBeard's analysis includes detailed consideration of the following categories of expense and how the figures below have been computed:

• Gift Production: $39.5 billion (assuming the av value of Santa's gifts per child =  $75)
• Employee Costs: $2.77 billion (incl: Elve's Salaries: $2 billion and Health Benefits: $773 million) 
• Electricity Costs: $98 million 
• Reindeer Costs: $54,000

It's a long time since I was in practice but it strikes me that ParentBoard's Santanomics are flawed.

I'm prepared to accept that they can ignore any property related costs other than electricity on the assumption that Santa.Inc owns the workshop and that no impairment costs arise due to specific local weather conditions. But there is still the cost of a new red suit each year - with all the travelling he does it's unlikely his suit would last indefinitely. And, I'm no expert but I suspect the reindeer costs are too low. The CNN santanomics expert agrees....

Sean Lock on Jimmy Carr's tax scheming

In the week that Jimmy Carr was exposed as a tax avoider and then apologised for his 'grave error', fellow comedian, Sean Lock, generated some great laughs at Jimmy's expense on the TV show '8 out of 10 Cats':

We all like to put a bit of money away for a rainy day. But you're more prepared than Noah!

There's a new tv show you could do: 'Through the Loophole'. "Who lives in a tax haven like this?" 

You've got an illness. You're suffering from tax intolerance. You might even be HMRC positive.

Gary Barlow of 'Take That' also come for a little stick.
Sean said the band is now known as 'Keep That'.
And Jon Richardson concluded that Gary's OBE stands for 'Offshore Banking Expert'.

Jimmy Carr himself admitted that it was all very complicated but that as a result of his offshore agreements he feared that he is now a member of Take That.

Hell's Grannies are to blame for the riots....

The following is an extract from an old Mython Python sketch about "Hell's Grannies":

Voice Over: Favourite targets for the old ladies are telephone kiosks.
Film of grannies carrying off a telephone kiosk; then painting slogans on a wall.

Policeman (coming up to them): Well come on, come on, off with you. Clear out, come on get out of it. (they clear off, he turns to camera) We have a lot of trouble with these oldies. Pension day's the worst - they go mad. As soon as they get their hands on their money they blow it all on milk, bread, tea, tin of meat for the cat.

Cut to cinema.

Cinema Manager: Yes, well of course they come here for the two o'clock matinee, all the old bags out in there, especially if it's something like 'The Sound of Music'. We get seats ripped up, hearing aids broken, all that sort of thing.

A policeman hustles two grannies out of the cinema.
Cut to reporter walking along street.

Reporter: The whole problem of these senile delinquents lies in their complete rejection of the values of contemporary society. They've seen their children grow up and become accountants, stockbrokers and even sociologists, and they begin to wonder if it is all really...(disappears downwards rapidly) arggh!

Shot of two grannies replacing manhole cover.

The extract above is taken with credit from the full transcript of Episode Eight: 'Full Frontal Nudity' (The title is derived from a line spoken in the episode by someone described as a Chartered Accountant: "I would only perform in a scene in which there was full frontal nudity". After which the ubiquitous Colonel announces that he has noticed a tendency for this programme to get rather silly.....)

AA Gill perpetuates the myth about accountants

"The problem with maths on TV is the same as the problem with maths off TV. It's boring. Maths is the reason we have accountants, who in turn, are difficult and boring."

I hope this blog goes some small way to evidence that such stereotyping is unfair.

From AA Gill's television column in the Sunday Times Culture section yesterday (p17)

How to decide which receipts are important..

At an early point in her career Sandy Toksvig apparently had a temping job in the accounts department for Wandsworth sewer. She talked about this on Radio 4's The News Quiz on 11 February 2011 and explained:

"It was my job to work out which receipts were important and which were not."

And then she explained how she fulfilled her responsibility:

"All I did was put one in ten in the bin."

Loot - with Jason Donovan as a forensic accountant

Broadcast only in Australia in 2004, Loot was set in:

"the thrilling and exciting world of chartered accountancy".

Jason Donovan played the lead character, Jon Peregrine, who ran a Forensic Accountancy practice called Peregrine Forensics. He had a silent and slightly eccentric partner, Charles Highsmith who was a retired Partner from a large accounting firm.

In the pilot Jon's business was just starting off and they had very little work. Before setting up on his own, Jon used to work for one of the big accounting firms, GV White. His soon-to-be ex-wife, Cynthia Allen continued to work for them in insolvency. Loot appeared onscreen in Australia apparently but not on British screens - so far as I know.

Loot was created by Allen Blewitt, chief executive of ACCA, the international accountancy body. It was described as "a slick new TV drama that, for once, doesn't portray accountants as timid, spineless and deathly tedious".

One of the plot lines has been described as follows:

Peregrine takes it personally when a dodgy initial public offering catches out thousands of small investors and triggers the suicide of his brother-in-law. Together with his genius computer hacking assistant, he won't rest until he finds out who is responsible.

With no Swiss bank account safe, no tax haven secure, tracking down that kind of money can buy you some seriously powerful enemies. And it's not as if Peregrine had a lot of friends to start with. At the same time, he is distracted by another case: a high-profile underworld business figure is missing and Peregrine has been hired by his ex-wife Cynthia to find him ...

Did ANYONE see this?

That nice man on the radio.....

After the ubiquitous John Whiting had spoken at an event recently, I was talking to one of his ex-colleagues. Let's call her 'Mandy'.

Mandy told me that her mother had been very impressed to learn that she worked with

"that nice man on the radio"

John of course has long been the BBC's first choice to explain tax issues on radio and TV.

I asked Mandy, in jest, if she'd ever thought to ask John for his autograph - as a gift for her mum. Maybe a signed photo even. She laughed.

"I'm pretty sure my mum has this picture of John Whiting in her head and imagines he looks like the actor John Forsythe who played Blake Carrington, in the 80s TV show, Dynasty."

We mused for a moment about whether Mandy could ask John to autograph a photo of 'Blake' and decided, for various reasons that she wouldn't do it.

Still, the question is, should John Whiting carry a stack of photos to provide autographed copies to his legions of fans. Or is Mandy's mum a one off?

Making the case for accountants to help with sustainability

This video is so well scripted it warrants a place on this blog, despite its serious message.
It features the ubiquitous Stephen Fry as the voice of the earth and encourages accountants to do more to aid sustainability.

Ken Dodd and the Inland Revenue

The comedian Ken Dodd, was prosecuted for tax evasion in 1989 as has been mentioned on this blog before, here and here. I'd love to find a clip of him talking about it in his act. For now though here are a couple of references to comments he makes about the experience.

He is known to introduce himself as a “failed accountant”. That, he explains, is simply to establish a rapport with the audience. “People today are all stressed out about home economics, and accountants are the current bogeymen. [Since when?]

Dodd is the butt of a lot of his material and repeated references are made to his love of money, his dislike of what he insists on calling the Inland Revenue and his past run-in with them. “They sent me a self-assessment form the other day. To me! I invented self-assessment.”

During the trial it was revealed that Dodd had very little money in his bank account. He did however have £336,000 in cash stashed in suitcases in his attic. When asked by the judge, "What does a hundred thousand pounds in a suitcase feel like?", Dodd made his now famous reply, "The notes are very light, M'Lord."