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Tax Treasure Island

04 January 2011 / Richard Curtis
Issue: 4286 / Categories: Comment & Analysis
RUFUS THE DOG and RICHARD CURTIS find themselves magically transported into a piratical pantomime


  • Time to visit a seasonal pantomime?
  • The Office of Tax Simplification suggests reliefs that could be abolished.
  • Why are not all reliefs for non-residents and non-domiciles included?
  • What might be the effect of protests by UK Uncut?

I went to the pantomime the other night. Well, I hear they are becoming trendy again, and coming from a nautical background (I can tell the sharp end of a boat from the other) the idea of a pantomime with pirates and treasure seemed too good to miss.

Strangely, it wasn’t quite what I’d expected …

Scene 1: The harbourside

Sally (enters from stage right, wearing bomber jacket, mini-skirt and fishnet tights): ‘Allo, my lover. Would you like me to show you a good time?

Richard (having just entered from stage left with Rufus, he is weighed down by seven volumes of Tolley’s Yellow and Orange handbooks 2010-11): The time? Yes, thank you, madam. Is it past six of the clock yet? I was thinking that, as the sun was over the yard-arm, I might partake of a pint (or two) in yon hostelry?

Sally (now a little confused): I think you may have missed the cut of my jib if you get the nautical pun. I was thinking that you might enjoy a quick run ashore so to speak. I don’t take cheques or credit cards mind. It’ll be strictly a cash transaction.

Richard: Hello, hello, Rufus, my boy. It looks like this young lady must be a seafaring type, but is approaching the end of her time in the UK to retain her entitlement to the 100% seafarers’ deduction under ITEPA 2003, s 378 to s 385 and won’t have time for a cheque to clear.

Rufus (it’s panto so a dog can talk): Remember: cash transactions.You might need to make a money laundering report.

Richard: I think, madam, if you don’t mind, I must excuse myself. As the nominated money laundering reporting officer of Adden Subtract Accountants, cash transactions with unknown individuals always make me somewhat nervous. Come on, Rufus. Let’s find a nice pub. All I can see here are fish (he looks around): plaice, haddock, cod, is that a Whiting?

Rufus (who is partial to fish): You’re right. I think he is perhaps also carrying out some research into the seafarers’ earnings deduction. I happened to notice that it was on the list of reliefs that the Office of Tax Simplification plan to include in the next stage of their review: Annex A of their Review of Tax Reliefs, in case you are interested. And if anyone asked me why I was wandering around a dark dockside at this time of night, that’s certainly what I’d tell them I was doing.

Richard (spots a pub. Low windows emit reflected flickers of firelight and the smell of beer and warmth – or possibly the smell of warm beer – emanates from the doorway): C’mon, Rufie Boy. This’ll do us. (Exit, pursued by a dog.)

End of scene 1.

Scene 2: Inside The Jolly Taxpayer

Stage notes. Richard, with a pint of the foaming nut brown in one hand a packet of smoky bacon in the other, leads Rufus to a recently vacated table next to the log fire. Rufus sneaks under the table and proceeds to chase the packet of crisps around with his snout. An animated conversation is taking place at the next table. Hidden in the half light of a corner artfully ‘decorated’ with some old fishing nets, lobster pots and floats, a grizzled old man with a seafaring demeanour is talking to a young businessman who is checking his BlackBerry …

Bill Bones: Ahh, Jim Lad. Now where was I? Yes, you was a telling me of the problems you’d ’ad finding parking for your, what was it, your ‘beemer’, nearby. Well let me tell ‘ee; I knows a bit about cars. The recent changes in the capital allowances might have adversely affected you I suspect and I sees that Mr John Whiting and his OTS crew have included the 100% first year allowances for cars with low CO2 emissions (CAA 2001, s 45D, since you ask) in Annex B, ‘Further reliefs we will include in the next stage of our review if time permits’ of his Review of Tax Reliefs. An’ talking of cars, as we were, reminds me that not too many years ago the car industry used to call the UK ‘Treasure Island’. Robert Louis Stevenson would be turning in his grave if he knew, but it were true lad. Car prices here were much higher than in Europe and the car companies, manufacturers and ’stributors were cleaning up as we all paid over the odds for our horseless carriages.

Scene 3: An allowance

Jim Hawkins: Talking of prices Bill, can I remind you that the rent on your room here at the pub is long outstanding. Your name is now a regular fixture on my list of debtors that are aging.

Bill: A gin, lad? I don’t mind if I do. Ye know what? I was damn sorry to see the end of the horse as a mode of transport lad. Other than the problems of getting into the saddle with me wooden leg, they was reliable and tax deductible. Fuel – we used to call it ‘grass’ in those days – was literally lying around on the ground for nuffink. I don’t reckon I could afford a, what did you call it, a ‘beemer’; on my pitiful pension, but a horse – lots of us had horses. What’s more, to get a horse all you had to do was put two other horses in a field an’ wait a bit. ‘Voila’, as the Frenchies say; and some months later you had yerself a brand spankin’ new horse. Your horse even got a special mention in the Taxes Act: ‘keeping and maintaining a horse’, TA 1988, s 198(1). Twas a sad day when that was sent to the proverbial knacker’s yard by FA 1998, s 61 (he sniffs tearfully).

Jim: What was that you were saying about capital allowances Bill? The end of January will be with us soon and I need to finalise my accounts and tax return. If I’m late submitting them I may end up with a black mark against my name at HMRC.

Bill (looking round nervously): A black spot, lad? Watch out for them. We, sorry, I mean pirates, uses them as a warning. And pirates, that’s what they were them car companies, fleecin’ us of our hard-won gold. ’Course, those days are gone, but there’s still pirates out there, laddie, and just like that ol’ Long John Silver, if you let them get in charge of the good ship Blighty, afore ye know it the rest of us crew’ll be stranded on this island, things’ll be getting tight, yer taxes will go up, house prices’ll be going down and you’ll be marooned lad, marooned I tell ’ee, with no chance of moving to your dream home abroad because you’re in negative equity and with no house price boom on the horizon.

Scene 4: Taxi tax

Jim: I know what you mean about being marooned, Bill. I’d just closed the pub the other night and do you think me and my staff could find any transport home? Good job there’s an exemption from tax on the benefit of late night taxis.

Bill: A late night pastis, lad? Don’t mind if I do. We used to fight those Frenchies, but I am a bit partial to some of their liqueurs. By the way Jim, you might want to do some figurin’ about your late night transport arrangements, being as ’ow that nice Mr Whiting has that taxi tax exemption in his sights for an abolishin’. Page 31 of his review says ‘it does not promote fairness and creates distortions in the tax system’.

Jim: How many years have I heard them talking about a fair tax system?

Bill: That’s just pirates’ talk, lad. Pirates is always for equal shares ‘til they find the treasure, then it’s every man for himself. You’ll be like my old mate Ben Gunn – I think he used to write a bit about tax himself if I’ve got the name right – you’ll be stranded on this island with hardly a piece of cheese while them damn fine piraticals will ’ave sailed off to those far-flung places with exo’ic soundin’ names. Let me see now, I’ve heard tell of them down in the old Smuggler’s Inn the other night, where was it now? Morocco? No, I recalls, Monaco, that was one of ’em; Lickystein and Swizzerland (aptly named now I think about it) was a couple of others. They’ll be a moored up in their fancy galleons – gin palaces I think is what they call ’em now – ’course that mooring up bit’ll be a mite diff’cult in Licky and Swizz, but you get my drift. I understand that some of those pirates have had their money stashed away in secret bank accounts, but the Revenue men gives them a special amnesty. Beats me how those pirates remembers all the details of them there accounts.

Jim: It’s not so difficult nowadays, Bill. For example (he waves a memory stick in the air), I can keep all of my business accounts and financial records on this key.

Jim: Whiskey, lad? I don’t mind if I do; but make mine a large one and none of that blended stuff. You tell Pete the barman I’ll ’ave a tot of his special – keeps it ’neath the bar ’e does. Personal import, if you know what I mean (he taps the side of his nose).

Scene 5: A bitter taste

Jim (reluctantly getting up and moving towards the bar): I’m sure that Pete would never contemplate anything like the evasion of duty on the undeclared importation of spirits …

Pete the barman (overheard speaking to another customer as Jim approaches the bar): Anyway, those Excise men only crushed me Transit didn’t they? Those 500,000 fags and 200 cases of whiskey is for my personal consumption I told ’em, but they didn’t believe me. I quoted Hoverspeed and said that they was infringing my human rights, but it was still a bloody long walk back from Dover. Yes lad, how can I help you …?

Bill (on being given his drink): Cheers, me hearty. Where was I? Oh that’s right, pirates and their gin palaces. Quite fitting really, cos what does your pirate drink on his gin palace? A pink gin that’s what. What’s a pink gin lad? Gin and Angostura bitters. And what gets itself a tax break – bloody Angostura bitters is what, although that Mr Whiting’s got a weather eye on that as well, I’ll wager. He’s got ’imself a little list ’as Mr Whiting and Angostura bitters is on it although I’ll wager them pirates will put up a mean and nasty fight to keep what they thinks theirs by right. After all, what’s a gin palace if it ain’t got a plentiful supply of tax subsidised pink gins helping it on its way across the briney?

Jim: It sounds like they had that duty relief on Angostura bitters gifted to them. That reminds me, was I also reading something the other day about millennium gift aid?

Bill: Bacardi and lemonade, lad? I don’t mind if I do. And yes, you was. It’s also on Mr Whiting’s little list. For some strange reason no-one in the Revenue seems to have noticed that it’s 990 years ’til the next millennium and it’s ten years since the millennium gift aid relief expired. I expect they was all too busy checking the tax liabilities of hardworking families or something.

Scene 6: Keeping account

Jim: Yes it’s a problem in these straightened economic times for hardworking families to save some money, I believe. Excuse me for a moment (he picks up his BlackBerry) while I check the impact of the new furnished letting rules on my property portfolio.

Bill: That’s true. Time was – 1861 I believe, the year by the way, not half past six – when that nice Lord Palmerston created what became the National Savings bank to encourage ordinary wage earners ‘to provide for themselves against adversity and ill-health’. Pity the banks didn’t take some advice from him about providing for the ’conomy against adversity and ill ’elf if you ask me. But a bit like the millennium gift aid, no-one seems to have noticed that the National Savings Bank no longer opens ordinary accounts, so the tax relief for the first £70 of interest (don’t laugh, but at their rate I’d need about £70,000 to get the benefit of that nowadays) is also on the way to Davy Jones’s locker. I expect those well-paid civil servants was too busy to notice that as well.
I ’spect they was too busy chasing them pirates what squirrels away their treasure abroad.

Jim: I think that’s a bit strong Bill, my man, I’m sure that these entrepreneurs are simply taking advantage of legal tax planning and avoidance opportunities. Anyway, it’s not their fault that you’re not getting as much as you want as interest.

Bill: Want a pint of best? Don’t mind if I do, matey. But I still thinks it’s one rule for them and one for the rest of us? If I could persuade Mrs Bones to live abroad maybe I could incorporate my little business ferrying people across the harbour and pay the dividends to her. Course, talking about Davy Jones just now, his namesake tried something similar and look where it got ’im.
A £40,000 tax bill, an intimate knowledge of the tax and legal system and his name in Simon’s Tax Cases. He had a lucky escape.

Scene 7: Re a search

Jim: Well, I suppose that nowadays we have the National Health Service to protect us from ‘adversity and illness’. And I expect that all the vaccine research relief of CTA 2009, s Part 13 Ch 7 has helped to develop various medicines and serums.

Bill: Rum, lad? Don’t mind if I do. But if you’re thinking of claiming any of that relief you’d better be quick; yes, you’re right, it’s on that little list as well. Turns out there’s only about ten companies what can actually claim the relief. Ten lost votes isn’t likely to sway an election now, is it lad?

Jim: It looks like there’s quite a few of these tax reliefs that might be abolished then?

Bill: Looks possible lad; either abolished, but at the very least reviewed, simplified or simply retained. There is one funny thing about Mr Whiting’s list though and it was pointed out in The Times on 7 December by that nice gentleman, Maurice Parry-Wingfield. ‘Maurice’ – sounds like a Frenchie’s name to me, but I reckon he had a point. Those pirates and their big houses in London Town, a-pushin’ up the prices and like as not not payin’ any capital gains tax on them cos they’s not resident or it’s owned by an offshore company or yer pirate’s non-resident wifey. Well Maurice, ’e don’t reckon it’s right and he wants to know why these tax reliefs for non-residents and the like ain’t on Mr Whiting’s little list.

Jim: It sounds like this list is already listing. Listing over to starboard or to port maybe?

Bill: Port laddie? Don’t mind if I do, make mine a large schooner. Anyway, what’s sauce for the goose is sauce for the gander. If we residents what’s a-crewing the good ship Blighty and is a-travellin’ steerage in her is gonna lose our tax reliefs why shouldn’t those up in first class not loose summa theirs as well? I reckons these UK Uncut people and their high street protests could be the first sign of a mutiny against these pirates.

Scene 8: A treasure map

Bill: I found a pirate map once, you know. I followed it down to the Mediterranean and there was an area on the map that said ‘here be dragons’ and it was right, there was dragons. One of them was off that telly programme. Apparently he’s a non-dom what also gets some jolly good tax breaks. He was bringing his gin palace into the ’arbour. They moors their boats stern on to the dockside there and he was reversing in and I could see that he was going to hit the dock so I called out a warning (he shouts): ‘Avast behind!’

Sally who happens to be passing the table at this point hits him with her handbag.

Bill: Ouch! D’you know Jim lad, the same thing happened to me on that damn harbour down in the Med.

Jim: Did anyone come to your aid?

Bill: Bacardi and lemonade, lad? I don’t mind if I do …

I woke up at that point.

Issue: 4286 / Categories: Comment & Analysis
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