Stamp Duty and playing cards

A few years ago I was researching a new talk that involves a reference to playing cards and was astonished the learn the following. Why didn't anyone ever tell me this before?

When you look at the central image of a spade on the Ace of Spades it is often more ornate than that on the other aces and the reason is tax related!

Apparently this all began in the 17th century under the reign of King James. He passed a law requiring the Ace of Spades to bear an insignia of the printing house as proof of payment of a tax on the local manufacture of cards. 

This ornamental embossing was also intended to prevent forgery of the revenue stamp. To forge an ace of spades was punishable by hanging, hence it is sometimes still known as the ‘hanging card’. 

Stamp duty was extended to playing cards in 1711 by Queen Anne and lasted until 1960. All decks of playing cards printed and sold in the United Kingdom were liable to tax under the Stamp Act 1765, and the Ace of Spades carried an indication of the name of the printer and the fact that the tax had been paid.

I am astonished that I have only found this out now - all these years after I started to work in tax having already established my magical hobby!

Irregular verbs to describe variations on tax planning and tax avoidance

 At it's simplest perhaps we have:

I only pursue approved tax incentives

You look for tax avoidance opportunities

He breaks the law and evades tax

One variation is:

I pay all the tax due

You look for easy ways to avoid paying all the tax due

He engages in aggressive tax planning

Another is:

I manage my financial affairs sensibly 

 You engage in aggressive avoidance 

 He/She is a slimy tax cheat

And looked at from another perspective:

I receive public spending

You get tax incentives

He gets a subsidy

What further variations can you come up with?

What's the origin of the term 'beancounters'?

The most obvious answer as to why accountants are sometimes referenced, disparagingly, as 'beancounters' might involve counting the beads (or beans) on an abacus. But that's not the case.

There are a number of more likely suggested origins of the phrase - but no one seems to know for sure:

Phrases.org
It is likely that the expression wasn't coined in English but is a translation from German.
 The German word 'Erbsenzähler' (Erbsen = beans and zähler = counter) was used in print by Hans Jakob Christoffel von Grimmelshausen in Simplicissimus', 1668, with the same 'pedantic accountant' meaning that we now use.

It is possible that the English usage came from a later and separate coinage, but unlikely.

 The phrase appears in English in Australia soon after the first use in the USA and again this probably ultimately derived from Germany.

An example is found in The Parliamentary Debates of the Australian House of Representatives, 1928:  "It is not a bean counter's bill. There is no attempt to make any savings."

This insinuation that 'bean counters' were penny-pinching accountants who couldn't see the bigger picture chimes in well with the no-nonsense reputation of Australian politicians.

The phrase flourished down under during the 1930/40s before becoming commonplace throughout the English-speaking world later in the 20th century.

 Word detective

"Bean counter" has an interesting history. It seems to have first appeared in the mid-1970s in the U.S., and its original use was simply as a vivid synonym for "accountant," especially one who brooked no nonsense.

 Its first known occurrence in print was in a 1975 Forbes magazine article that referred to "a smart, tightfisted and austere 'bean counter' accountant from rural Kentucky," though we can assume the quotation marks meant the writer had heard the term in use before the date of the article.

In any case, the allusion is clearly to an accountant so dedicated to detail that he or she counts everything, down to the last small, but still important, bean.

By the 1980s, however, most appearances of "bean counter" in the media were taking on a derogatory tone, and "bean counter" is now frequently used to mean a nitpicker who, lost in the numbers, fails to see the "big picture."

WiseGEEK' site has a more graphic analysis that includes:

While an accountant might be asked to perform a thorough inventory of his or her company's assets, only a bean counter would literally count the number of beans contained in the company kitchen's pantry. A financial bean counter may also scrutinize each department's budget to find any form of potential waste, no matter how insignificant or nominal it appears to be.

It is possible that the description was inspired by overzealous kitchen inventory takers who insisted on counting every bean in a bag or every potato in a sack. The act of counting every bean to the exclusion of more important duties would be viewed by many as the ultimate act of micromanagement. Perhaps the term "bean counter" entered the popular vernacular through the commercial or military food industries, where strict inventory controls are common.

Simplistic approach to clearing debts. Does the accounting stack up?

It is the month of August, on the shores of the Mediterranean Sea it is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.

Suddenly, a rich tourist comes to town.

He enters the only hotel, lays a 100 Euro note on the reception counter as a deposit, and goes to inspect the rooms upstairs in order to choose one.

The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher.

The butcher takes the 100 Euro note, and runs to pay his debt to the pig grower.

The pig grower takes the 100 Euro note, and runs to pay his debt to the supplier of his feed and fuel.

The supplier of feed and fuel takes the 100 Euro note and runs to pay his debt to the town's prostitute who in these hard times, gave her "services" on credit.

The hooker runs to the hotel, and pays off her debt with the 100 Euro note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.

The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything.

At that moment, the tourist comes down after inspecting the rooms, and takes his 100 Euro note, after saying that he did not like any of the rooms, and leaves town.

No one earned anything. No one produced anything. However, the whole town is now without debt, and looks to the future with a lot of optimism.....

First seen in HM Williams newsletter 'Account' in 2009

Analogies for how HMRC operates

If HMRC ran a café it would drag passers-by in from the street, 

force them to cook their own lunch, 

then fine them for overcooking the eggs. 

Two weeks later, it would dispatch a leaflet explaining that cooking eggs is easy! 

But doubling the fine.

This analogy formed part of Richard Godwin's Comment piece in The London Evening Standard on 21 December 2011.

Can you do better?

Contraception and tax investigations

Now there's a combination of ideas you don't come across every day.

A hunky accountant and an attractive lady tax inspector have developed a strong attraction for each other such that they arrange to go off to a hotel to satisfy their lust.

When the subject of contraception is raised the accountant gets a first hand lesson in the difference between neglect, wilful default and fraud - as explained by the tax inspector:

It would be neglect if you said you'd forgotten to bring one;
It would be wilful default if you refused to wear one that I've brought with me; and
It would be fraud if you told me that you've had the op!

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:

Bookkeeping and Accounting in 1945

This vocational guidance video shows what it was all about 70 years ago in 1945. It makes clear the distinction between bookkeepers and accountants, and mentions almost in passing their reliance on 'machines'.

The video also distinguishes the work of private accountants, who work in-house and public accountants who have many different clients. In the US they are still called CPAs (Certified Public Accountants). 

Accountants are also responsible for devising new bookkeeping systems and new methods of cost accounting. Accountants who specialise in this area were known as 'efficiency engineers' as an engineering background was very useful.

There's also career advice relevant to anyone considering bookkeeping or accounting (in 1945!)

Loved these quotes: 

"Because his job takes him form place to place, where he meets all kinds of people he must have a pleasing personality to be successful" NB: There is a clear presumption that all accountants were male in those days.

"Perhaps the most colourful accounting work is that of making special investigations". They worked for the FBI.

What's your favourite element of this old video?

Debits left, Credits right - City High Accounting Rap

This seems to be another version of a video I posted here a couple of years back. This one is credited to City High accounting class from 2011-2012.

What it takes to become a professional accountant

Every now and then I come across a US video about accountants that I feel fits on this site. I've just become aware of the CPA 2014 Rule the Tube video competition and one of the finalist videos made me really smile. Hope you like it too.

Newton's law of accounting

1. For every accountant, there is equal and opposite accountant.
2. Both of them are wrong.

10 things an accountants would never say

The truth about being an accountant

With due credit to Accountants Armstrong & Co who posted a link to this on twitter

Caitlin Moran's views on tax avoidance

The following comments are taken directly from Caitlin's Times magazine column 30 June 2012.

"I don't know about anybody else, but I am genuinely thrilled to be living through an age where accountancy is at the top of the news agenda. It's brilliant."

"Taxation is a sore subject because it is, basically a souped up version of the argument at the   end of a restaurant lunch - where a group of work colleagues start going, "Well, I only had a main and one glass of wine." while someone else gets out their iPhone and starts sourly smashing away at SplitTheBillWithPedants app.  

 The only difference is that when we divvy up the tax bill, of course, we don't invoice people for what they've eaten - but we base it on how rich they are, instead."

"[The principle of tax]...is one that can be very easily countered with a ninja move. For the common and logical defence of tax avoidance schemes....is that they are...PERFECTLY LEGAL"

"In the interests of balance, however, I should point out that it's also PERFECTLY LEGAL to be a total s*** - but that no one will ever thank you for it. It's PERFECTLY LEGAL to crush everything colleagues say with depressing sarcasm, abandon your pregnant spouse, or generally be a massive ball-ache - but I don't think any of us would feel a huge amount of glory defending these behaviours."

I've posted the above on this blog as Caitlin's style is deliberately entertaining. Anyone interested in the subject of tax avoidance schemes might want to read the 3 recent blog posts I wrote for the 'Ambitious Accountants' blog.

Bookkeeping made really simple and fun

Except that it's never really much fun...
 

And many congratulations to Julia Haigh, the winner of the AAT bookkeeping video competition. This required entrants to explain the principles of double-entry bookkeeping in three minutes or less.

An HMRC related analogies that made me smile

If you're a wily corporation, you can play this malign incompetence to your advantage. If you are well-meaning but don't have a degree in fiscal management, never mind funds for an accountant, then you must make endless angst-ridden calls to Patricia in the HMRC office in Pyongyang. I don't know if you've ever tried phoning Patricia, but when she does pick up, she's rarely pleased to hear from you. Having read the new report from the Public Accounts Committee about HMRC's "systemic failures", however, I'm going to ask Patricia out to lunch, order the lobster, then whisper over the petits fours: how about we call it quits? Or perhaps she might view me more favourably if instead of owing a three-figure sum, I owed eight figures.

The above formed part of Richard Godwin's Comment piece in The London Evening Standard on 21 December 2011.

The tax consequences of stealing stuff

Not sure which country's tax return guidance publication this is in. [edited: Thanks to Andy Long - below - for providing the link to show this statement also appears on IRS.gov (published by the Internal Revenue Service, part of the United States Department of the Treasury]

The Taxation episode (The Smokescreen) from "Yes Prime Minister"

In January 1986 the political comedy " Yes Prime Minister" featured an episode "The Smokescreen" in which The Prime Minister, Jim Hacker, favours abolishing smoking through heavy taxation but he runs into strong opposition from the tobacco lobby and the Treasury department.

The following exchange between the PM and his permanent secretary seemed especially worthy of inclusion on this blog:

Sir Humphrey: Taxation isn't about what you need.
Jim Hacker: Oh, what is it about?
Sir Humphrey: Prime Minister, the Treasury doesn't work out what they need to spend and then think how to raise the money.
Jim Hacker: What does it do?
Sir Humphrey: They pitch for as much as they think they can get away with and then think what to spend it on.

I've attached also an extract from the start of the same episode where Sir Humphrey explains his view as to how all new Prime Ministers want to cut either taxes or public expenditure.....

Tax rises and the Hissing Index

Last night's Wyman debate arranged by the ICAEW Tax Faculty was conducted in very good humour. The motion was "Assuming taxes rise which goose should be plucked first?"

One of the speakers, Trevor Evans (Ex-Director Business tax HMRC), focused on what he called the Hissing Index ("HI") which he suggested was much used in the corridors of power - Treasury and HMRC. This sounded, as intended I suspect, more like something that could have been derived from the days of 'Yes Minister'.

According to Trevor: HI is derived from the formula:

V x X x AF

where:
V = Volume of hissing per goose (ie: how much of a fuss is made by those required to pay additional taxes)
X = Number of geese being plucked (ie: how big is the group of geese that will be subject to additional taxes)
AF = Amplification Factor (This being a factor of the number of connections that a goose or gaggle of geese have eg: in the press, media, on TV news - or simply through being on first name terms with a Treasury Minister!).

Trevor then proceeded to identify which propositions had a High HI and encouraged the audience to vote for his proposition which, he claimed, would have a low HI.

(Maybe you had to be there!)

* The title was derived from a famous Jean Baptise Colbert quote.

Daft names for accounting roles

• Bookkeeper = Ledger Completion Manager
• Payroll clerk = Government Deduction Compliance Assistant
• Financial manager = Future Spend Calculation Manager
• Filing Tax Returns = Statutory Revenue Completion and Filing Contractor
• Office clerk = Photocopy Facilitator
• Tax adviser = Revenue detraction monitor
• Receptionist = Client Hospitality Manager
• Audit manager = Figurative bullshit researcher
• Accountant (in a firm) = Client Service Manager
  

Thanks and credit to Andy Tomlin of AT Accounting who tweeted most of these recently

Any more?