The poetic audit report

 We have audited the balance sheet

and say in our report
that cash is overstated,
the cashier being short.
The customer receivables
are very much past due,
and if there are some good ones
they are very, very few.

Inventories are outdated
and principally junk,
and the method of their pricing
is very largely bunk.
So, according to our figures
the undertaking's wrecked,
but, subject to these comments,
the balance sheet's correct.

Origin unknown. Reported on TaxLetter website

Tell me you're an accountant without telling me you're an accountant…

• I can’t relax in a café if I can see the till is open too long.

• My friends think “a quick tax question” is an acceptable start to any conversation.

• I once said “that’s disallowable” out loud during a family dinner.

• I judge people for how they organise their receipts. Or don’t.

• My partner gets nervous whenever I say “Can I just ask… what was this for?”

• I've explained what dividends are at least 47 times this year.

• I’ve laughed out loud at accounting memes. Then corrected them.

• I automatically say yes please for a receipt regardless of the transaction 

• Whenever a friend buys me a drink or lunch they sit in my head as creditors as I owe them one back! 

• I can’t cope if my laptop doesn’t have a separate number pad 

•  When I'm out with self employed friends they always ask me if they can claim it as an expense.

• I keep receipts for things I didn’t even pay for, just out of habit.

 

A dozen ways to maximise the tax you pay (a parody)

 

1. Find the cheapest accountant you can. Bonus points if they're your cousin’s mate.

2. Give them your books at the last minute – ideally in a carrier bag.

3. Don’t involve your accountant in major decisions – just let them “sort it out later.”

4. Draw as much as you like from your limited company bank account – it’s your money, right?

5. Pay your taxes late and file your returns late – HMRC love a bit of extra interest.

6. Always listen to your mate Dave down the pub. His situation sounds exactly like yours.

7. Ignore all reminders from HMRC – they’ll get back to you if it’s urgent.

8. Treat your accountant like a form-filler, not a business adviser – why waste their brainpower?

9. Leave your VAT registration until you've already blown through the threshold.

10. Keep poor records – better still, don’t keep any at all.

11. Assume that if you paid tax last year, you’ll owe the same this year – why check?

12. And finally, always argue about your accountant’s fees. Because saving a few hundred pounds there is far more important than the thousands you might save in tax.

Inspired by a post by Anthony Scrase on Facebook 

Were the Owl and the Pussycat involved in tax avoidance?

A simple analysis suggests that this Edward Lear poem is all about tax avoidance.

The Owl and the Pussy-cat went to sea [going offshore obviously] In a beautiful pea green boat, They took some honey, and plenty of money, [evidently cash] Wrapped up in a five pound note. [money laundering perhaps?]

Pussy said to the Owl, 'You elegant fowl! How charmingly sweet you sing! O let us be married! too long we have tarried: But what shall we do for a ring?' They sailed away, for a year and a day, To the land where the Bong-tree grows [obviously a tax haven]

The big clue is in that penultimate line. Leaving the UK for a year and a day is the minimum period of absence required to ensure that they secured non-resident status under the rules then in place.

The above analysis was offered in 2009 by Andrew Hubbard, now Editor in Chief of Taxation magazine, when he was newly installed as President of CIOT, after the Chartered Tax Advisers' address on the anniversary of Edward Lear's birthday.

10 ways to run your accounting firm like the Starship Enterprise

 I have always been a fan of Star Trek. Here are some crossover ideas for accountants:

1.  Encourage staff to think like Spock when making deductions—logical, precise, and with the odd raised eyebrow.
2. Take inspiration from the Borg and assimilate new software updates: "Resistance is futile." 
3. Declare "red alert" status whenever a client’s tax return deadline is looming. 
4. Offer “Q Continuum” consulting services for clients who want the impossible done instantly. 
5. Schedule regular "away missions" to clients' offices—just remember to wear red shirts cautiously.
6.  Say, “That’s highly illogical,” whenever an inspector challenges one of your client’s deductions.
7. Raise the deflector shields, especially if HMRC contacts your clients about an investigation.
8. Tell the managing partner, “I canna do it, Captain, I can’t defy the laws of physics,” if he or she asks you to prepare more than five tax returns a day.
9. Install a "universal translator" to decode the jargon from clients in niche industries.
10. Designate a "star date" system for deadlines, so no one can ever say they didn't know when the reports were due.

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.

Matt Hancock to appear in new show: Accounting with the Stars

Politicians, actors and other 'selebs' have been queuing up in the hope of getting a steady job in accountancy via the latest talent show that producers hope will top the TV ratings. 

"I always had this secret dream that I might one day work in some area of financial management" said an excited MP, "but this TV show means that at last there is the chance that my dreams might come true…" she said as she practised her audition piece with her calculator and spreadsheet.

"Ever since I was a kid I used to practise accountancy in my bedroom…’ confessed a popular TV actor, whose identity we are protecting until his participation is confirmed. "I sent a few tables of some projected expenses into all the big firms, but even though they kept rejecting me, I always believed I had the financial acumen and auditing skills to make my dreams come true."

"This means the whole world to me" wept another 'seleb', after being told that she had been shortlisted for the show.  Decisions have yet to be made as to who will be the judges. 

Expectations are high that one judge will end up being accused of being too brutal with some of the accountancy hopefuls. 

Imagine if Matt Hancock MP was to take part and causing one of the judges to shout: "You call that deductible!" and forcing him to tear up his illegible receipts from some Australian gift shop. "Forget it Matt. You’ll never make it as an accountant; you’ll just be a laughing stock ex-MP for the rest of your life".

Popular accounting terms - redefined

 Profit – A chief executive who gives the accountant the bottom-line.

Debtor – A high society fillies’ coming out trip.

Corporation Tax – A levy on people with large stomachs.

Turnover – The number of times customers are fooled into buying your product.

Budget – A caged bird that can fly through the sound barrier.

Expended – Exhausted from all that shopping.

Drawings – The creative art of taking money from your business.

Stock-take – Counting the number of items taken home from work without payment.

Book-keeping – Those books not given to the accountant.

Fixed Cost – Size of required bribe.

Cost Accounting – Size of accountants' bill.

Liability – A gift for telling the opposite of the truth without detection.

And finally –

Asset – A complete collection of posteriors.

With many thanks to Rod Wilson of RWA Ltd Accountants (Rod tells me that RWA = Really Wicked Accountants)

Ten annoying myths about accountancy

1. Accounting is just about maths
2. Accounting services are expensive
3. Accountants are boring
4. Accounting is all about helping clients pay less tax
5. It's important to have an accounting degree before you start
6. Tax is payable by reference to turnover (rather than profit)
7. Profit and cash are the same
8. If there's money in the bank we must be doing alright
9. You don't need an accountant if you use Xero or QBO
10. Accountants all make loads of money and are loaded

Credit to AAT for their recent social media activity that generated the above suggestions.

Popular films remade for accountants (part one)

There are dozens of films about lawyers. Here are some that could be made about accountants:

• The Accountant of Monte Cristo 
• Honey I Shrunk The Balance sheet 
• Double Entry Indemnity 
• Abacus Now
• Dead profits Society
• Kinky Books
• Trading (Profit and Loss Account) Places 
• The Unbearable Lightness of Being Audited 
• Harry Potter and the Audit of the Phoenix 
• Tax Returns Of The Jedi 
• Debbie Does Double Entry Bookkeeping 
• Abbacus - The Movie 
• The Offshore Shank Redemption

The purchase ledger accountant's lament

Piles of purchase invoices, in all colours and sizes

Apparently so varied but with very few surprises
The Boss will read them carefully before he authorises
Then it’s my job to process them as my blood pressure rises

I say each number quietly to get it in my brain
And as I type it to the screen I say it once again
The others in the office think my mumbling’s a pain
They say it shows I’m mad, but can I promise you – I’m sane!

Once input to the system I’m so careful where I pile ‘em
Too close to the window, they’ll be gone before I file ‘em
And that would be the end of me, straight off to the asylum…
My loving caring colleagues would be very quick to dial ‘em

So here I am, an invoice clerk until the bitter end
Most of the time I work real hard but sometimes I pretend
I’m living in a different world, with mates and cash to spend
Oh please won’t someone rescue me? I’M GOING ROUND THE BEND!

Written by Sean Kelly.

TV shows remade for accountants

The are dozens of TV shows about lawyers. Here are some that could be remade about accountants:

• Calculators  - Like Suits but without Meghan Markle
• (In the) Black Books - a remake of the sit com about a bookseller
• QI - Quite Insolvent
• MS Excel 5 - a remake of Fireball XL5
• Companies House Party - a remake of Noel's House Party. I'm not explaining any more! ;-)
• The Fall And Rise Of Reginald's Accountants Fees
• I’m An Accountant, Get Me Out Of this audit
• The Expenditure Files
• The Bill
• Audit in Paradise
• Howard's Month End
• Tax-y
• Count Down
• Men accounting badly
• Mr Bean Counter

We are accountants, my friend (superb song parody)

We Are Accountants
(An accounting anthem to be sung to the melody of the Queen smash hit)

I've paid my subs
Time after time
I've done my CPD
Filed accounts on time

And material errors
I've made a few
I've had my share of journals kicked in my face
But I've come through

We are accountants, my friends
And we'll keep on counting - 'til month end
We are accountants -
We are accountants
No time for lunch breaks
'Cause we are accountants - of the world -

I've taken work home
Had late conference calls -
You brought me useful provisions - and the documentation that goes with them -
I thank you all -

But it's been no box of Roses
No mid-month snooze
I consider it a challenge before that large audit case -
And I ain't gonna lose -

We are accountants, my friends
And we'll keep on counting - 'til month end
We are accountants -
We are accountants
No time for lunch break
'Cause we are accountants - of the world -

© accountingcelebrity.com 2010

Is this the way to do an audit?

Spoof of the Peter Kay version of the Tony Christie Classic. Includes a number of novel rhymes and a bunch of methodologists from PwC. Methinks it may not be an officially sponsored film. Watch out for the robotic antics of the last guy through the swipe gates just before the end.

Are lap dances tax deductible? (parody: A Few Good Expenses)

Typical problem client

Almost every accountant who completes self-assessment tax returns will recognise the following three archetypal clients:

Kara Earabahg – She saves everything up for you and lets you have it in a big plastic bag. You or your staff have to work through a load of irrelevant papers to identify the data that is relevant to the tax return. And sometimes you wonder if you’ve found it all.

Ian Complete – He never sends over everything you need. Typically he forgets to provide details of his pension contributions, gift aid donations and sundry allowable business deductions.

Lars Minit – He ignores all your requests and prompts. He gets you everything you need only just before the filing deadline and has faith in your ability to ensure he avoids late filing penalties.

Married at First Sight: Accountants stuck in a bad marriage

What follows is an entertaining analysis of the merger of two accounting bodies as if they had met and married in 2014 in a lavish ceremony agreed by their respective members.

Together, the lovers formed CAANZ, an alluring acronym which stands for Chartered Accountants Australia and New Zealand. 

The great promise of this matrimony of professional bodies, as laid down in the nuptial documents, otherwise known as the Explanatory Memorandum to the merger, has not lived up to its vows. 

Perhaps it is a case of haste to the alter. NZICA appeared only borderline solvent before the marriage. It was the ugly duckling which somehow married a swan, albeit a worn out old swan, with sweet talk and forget-me-nots in an Explanatory Memorandum. As the private equity turnaround merchants say: “You only have to look good for the wedding day.” 

Since the nuptials,  the New Zealand bride seems to have been on a frolic with the marital credit card, spending up in the Shaky Isles and apparently taking liberties with joint possessions like the nominations and governance committee, fellowships awards and professional independence.

The above is an extract from a longer and more devastating analysis written by Michael West, an Australian journalist and Associate Professor with Sydney Democracy Network, Sydney University.