Tax Break

John Fisher, international tax consultant

Archive for the tag “British Humour”

His Kingdom For A Hearse

With England burying one of its monarchs today, 530 years late, I thought it appropriate to re-post this item from March 25,  2012.

Greatest Britain

What makes Britain great? There is, of course, no single answer (and the French would suggest there is no question), but the nation that gave the world its principal parliamentary system, its principal international language and (sorry, Yanks) its principal sport must have something in its national DNA that sets it apart from all the rest.

It seems to me that a major factor is Britain’s innate conservatism as described and promoted by the 18th century philosopher and politician, Edmund Burke. British society doesn’t change – it evolves. And evolution produces strength, step-by-step. There have, of course, been potholes in the road over the years – most notably the Civil War and Protectorate of Oliver Cromwell in the 17th century – but, let’s face it, after a few years of that miserable puritan they brought back Charles II whose head had fortunately not been cut off along with his father’s. When things went haywire again a quarter of a century later, the King (the last James we are likely to see) was booted across the water and none other than John Locke, the very man who challenged the divine right of kings in his “Two Treatises of Government”, was charged with schlepping the new king and queen from Holland.

There was a marvelous example of British evolution a few months back that, typically, went almost unnoticed. One Friday morning an announcement was made in Perth (the Aussie one) – which is just about as far as you can get from Buckingham Palace without jumping on a spaceship – that henceforth the first born of the monarch (etc) will be the heir to the throne irrespective of gender. In a stroke, countless centuries of common law and statute were set aside and Britain and its Commonwealth moved on (I am aware that political correctness dictates that I should be talking about the United Kingdom – but, frankly, I am a bit ambivalent towards Northern Ireland). And what about Decimalization 40 years ago? After watching sterling evolve over centuries into the quaint system of pounds, shillings (20 in a pound) and pence (12 pence in a shilling) – instead of changing the currency they just dropped the shillings and recast the pence. To maintain an element of originality in the change, instead of using a normal date (like January 1 used for introduction of the Euro) they went for the totally obscure February 15 1971 – which could, at least, have been identified as the middle of the month – in any month other than February.

Which brings me to the central point. I have a hunch (but not an ounce of evidence) that we may be heading for another of those evolutionary changes in the next few years.

Last week, in the month of March as from time immemorial, Chancellor of the Exchequer George Osborne presented the Government’s budget for the coming fiscal year. The Government’s fiscal year starts April 1 but, for the purpose of income tax the year starts on April 6. Why April 6? The story is simply wonderful.

New Years Day used to be recognised in Britain as March 25. That date represents Lady Day when, according to Christian tradition, the Archangel Gabriel informed the Virgin Mary she was going to conceive (count nine months and you get to Christmas Day). The Treasury understandably collected its taxes based on the year commencing March 25. When, in 1582, Pope Gregory XIII instituted his calendar replacing the old Julian version European countries gradually adopted it. The Protestant English, however, gave him the two finger salute and hung on until 1752 when, in addition to adopting the Gregorian calendar New Year’s Day was moved to January 1. The tax year was left untouched but for one small point. Adoption of the Gregorian calendar required an eleven day leap forward in the date (there were riots reported at the time of people claiming they had been robbed of part of their lives). Not prepared to give up on tax revenue, the Treasury moved the collection period forward by the said eleven days – meaning that the new tax year would start on April 5. As part of the calendar change leap years are generally skipped at the turn of the century – in 1800 another day was added bringing the start to April 6; in 1900, the Treasury was magnanimous and left the date alone; 2000 was a leap year, so we will never know what Gordon Brown might have done.

It is hard to see how this system can go on forever. I recently had to do some foreign tax credit calculations for a client invested in real estate in the UK – I felt like getting out an abacus (and hitting someone over the head with it). I would assume that one of these years when the economy is doing well and a government is in the middle of its term there will be a quiet announcement from somewhere like the Isle of Skye (if it is still part of Britain) that the next tax year will start on April 1 – but then everyone will probably assume it’s an April Fools joke. Happy New Year.

Celebrity Squares

1101500102_400Adolf Hitler is, for me, ancient history, while Churchill is almost pinchable. Why the distinction regarding two implacable foes, the height of whose infamy and fame coincided exactly? It is simply because, by the time I was born, Hitler had been dead for over a decade, while I remember Churchill’s funeral,  50 years ago next week, vividly. Hitler was in black-and-white. Churchill was in colour.

We tend to think back on our childhood as steady-state. I was 10 years old when Colour TV came to Britain and  have always thought of it as a major revolution in British life. In fact, although the BBC had started broadcasting in 1936, few homes had TVs until around 15 years before Colour hit the living room. The story of the last hundred and fifty years has been one of continuous change.

Change has been as true of Celebrity as of any other field. Although the early twentieth century brought images of mute silver-screen stars to the world’s movie theatres, it was Charles Lindbergh who, thanks to his groundbreaking transatlantic flight in 1927, was the first true international celebrity. World leaders were not seriously heard until the 1930s, so that, when the British people had the lion’s heart in the dark days of 1940, Churchill’s roar was quite a novelty. It wasn’t surprising that the Old Man was crowned Time Magazine’s Man of the Half-Century in 1950 (he was beaten for the full century by Einstein), or that he was later voted, almost by acclamation, as the Greatest Englishman, whatever that may mean.

High Flyer

High Flyer

Through the second half of the twentieth  century, celebrity had two significant branches – entertainment and glitzy wealth on the one hand, and politics on the other. If you were not an embarrassing extrovert or a politician, you could expect to live your life in blissful anonymity. Then came the Information Revolution. Everybody was out there with the potential to reach the world – even if the world wasn’t really that interested in being reached by most of them. But who cared? It was cheap and worth a go.

Which brings me to my point. I am a tax advisor. I am, despite what it says in the sub-headline to this blog, boring. Tax advice is something to be practiced behind closed doors by consenting adults. Should I ever become a celebrity, it will not (or at least, should not) be because I dispense advice about the laws and practices of taxation.

But, it appears, the times they are a’changing. After the OECD Centre for Tax Policy and Administration aired its maiden internet TV broadcast last year, its head – the drop-dead gorgeous Pascal Saint-Amans – has now been declared Person of the Year by none other than Tax Notes International (which you will be forgiven for never having heard of). In a wide-ranging interview on the progress of the world-famous BEPS project, he declares that he is ‘the luckiest person in the tax world’. Now, go steady there, Pascal. A tax attorney who pocketed a $10 million success fee might argue that you are in second place. We know you are an important bloke, and you and your team have to philosophise a lot about the future of taxation, but – as I have written in the past – philosophy is to international taxation what a bicycle is to a fish. You, and the world-famous Tax Notes International, may think that the BEPS project is up there with the Theory of Relativity and World War II, but frankly it isn’t.



When tax bureaucrats become celebrities – and I stress that I am sure Mr Saint-Amans is amazingly good at whatever he does from 9 to 5 – it is time to think about hanging up ones Oxford Shoes.  A good tax advisor is someone who has a broad view of the business and political environment around him. There is plenty more to read about than irrelevant bla-bla regarding  tax people similar to himself.

So I say to the editors and my fellow readers of Tax Notes International: ‘Get a life!’


Christmas Cheer

Charles-DickensThe spirit of Christmas Present materialized in the wake of the sensational success of  ‘A Christmas Carol’. Britain which, despite French whinging, was – in 1843 – the world’s superdooperpower, had been struggling with Christmas traditions and what-not for years. Dickens’s simple short story of a tyrannical, lonely employer mirrored against his put-upon employee (the latter having a loving, but tragic, family life) caught the nation’s mood. In a tale that, to borrow  from John Lennon, is more popular than the Nativity, the eponymous Scrooge eventually sees the light, and everyone – including the sick child that Dickens threw in for extra pathos – lives happily ever after. Amen.

The gifts didn't improve much over the years

The gifts didn’t improve much over the years

For me, a non-Christian, Christmas has long been defined by an event exactly 100 years ago today. The organized football match between the Allies and the Hun is probably apocryphal (nobody can agree on the score), but what is certain is that there was an informal truce on the Western Front for a number of hours on Christmas Day 1914. The Germans seem to have started it (as every good Englishman knows, they always start everything) by singing Stille Nacht (a passable translation of Silent Night). Before long, both sides were out of the trenches exchanging gifts of tobacco, black bread and buttons – and, just maybe, starting the Hundred Years War that has seen Jerry winning four World Cups to our one. (Fortunately, the World Wars went the other way.)

The truce over, the troops climbed back into their respective trenches and spent the next four years ensuring that at least 10 million of their number would never again sit around a Christmas tree exchanging gifts in the bosom of their families. Indeed, in December 1915, the order went out that any repeat of the events of a year earlier would result in a Court Martial and the Firing Squad, not necessarily in that order.

And THAT is Christmas. Once a year, mankind is enveloped in a vague haze that colours its eyesight and addles its brain. For a few short weeks, minds turn to gift-buying and peace and goodwill to all mankind. Come January 2nd, the miserable self-seeking world is back to normal  (from what I am told by Christian friends, it can start on Christmas afternoon when out-of-town guests – like three-day-old fish – start to stink). Someone who in mid- December would volunteer to save the world would, come  New Year, not give the drippings of his nose to a person dying of thirst.

Why do people insist on comparing me to these guys?

Why do people insist on comparing me to these guys?

This is the reason why, perhaps ironically, I believe in Taxation. While there are countless wonderful individuals and organizations out there who help the less fortunate, only the enlightened, collective self-interest of a people delegating the responsibility for its poor to its elected representatives, has the chance of ridding a country of the scourge of poverty. However enticing the Christmas message of peace and goodwill to all men sounds today (December 25th), Scrooge was right when he called it ‘Humbug!’

In any event, a heartfelt Merry Christmas to everyone celebrating today.

For Whom The Bell Tolls

Mr Turner wasn't always a Romantic

Mr Turner wasn’t always a Romantic

The scene – a church graveyard in Middle England. A respectable crowd, trussed-up in winter clothes, surrounds an open grave. As the coffin is lowered into the gaping hole, the priest declares: ‘The Mother of Parliaments gave, and the Mother of Parliaments hath taken away.’ A sharply dressed gentleman throws the first clod of earth onto the coffin-lid, almost obscuring the gold plaque: ‘Double Taxation Treaties 1872 – 2014. Taken In Their Prime. RIP’.

George, for that is the chief mourner’s name, turns towards the gate, followed by Dave, Nick and Ed. An intimidating, middle-aged woman tarries at the graveside, a sardonic smile engulfing her harsh face. ‘Margaret!’ calls Ed. ‘Move your arse. If we don’t hurry, the Tories will destroy the capitalist system before we  get the chance.’

Not fair. The lady is not gigantic

Not fair. The lady is not gigantic

Sounds gothic? Welcome to  Chancellor of the Exchequer George Osborne’s pre-election Autumn Statement (Budget Preview). After Labour MP Margaret Hodge successfully mauled executives of Starbucks, Google and Amazon back in 2012 over the immorality of shifting UK profits to low-tax jurisdictions, it was only a matter of time (election time, to be precise) before the Conservative Government sought to retake the moral high ground.

Many thought it enough that David Cameron had taken the lead in pushing the OECD BEPS initiative at the G8 Summit in Northern Ireland in 2013. Wrong. Last week his Finance Minister spewed out possibly the most radical piece of international taxation legislation since JFK nuked the world with the Controlled Foreign Corporation (CFC) on October 16, 1962 – the first day of the Cuban Missile Crisis (CMC).

google taxThe  Diverted Profits Tax – already affectionately  dubbed the Google Tax – will tax profits rightly belonging to the UK but currently denied it due to the inconvenient permanent establishment provisions of Britain’s double taxation treaties. It will also tax payments to low-tax jurisdictions unless there is a jolly good reason for them, irrespective of OECD transfer pricing provisions. In order to ignore the existence of a century-and-a-half’s worth of international agreements, the new tax is to be precisely that – a new tax, not a subdivision of the Corporation Tax. It will be levied at a higher (25%) rate and, Mr Osborne hopes, will be beyond the clutches of the EU, OECD and substantially every country participating in the United Nations General Assembly.

Happily, the legality of this aggressive move is to be examined by the Tory party’s nemesis – the European Commission. There are also strong arguments that the new tax does not succeed in side-stepping treaties, being ‘substantially similar’ to existing taxes.

What is hateful about the proposal – which has enormous support in the UK – is that it potentially undoes 140 years of international tax cooperation. Ironically, that cooperation was started by the British – the first ever double taxation treaty being concluded with the Swiss Canton of Vaud in 1872. Moreover, such international cooperation has never been more marked than in the last two years. The BEPS Action Plan, while unlikely to be implemented in all its detail, has, together with FATCA-inspired Automatic Exchange of Information, already started to shake-up the international scene in a big way.

Farage proves he can multi-task

Farage proves he can multi-task

So why has the British Government decided to risk bringing the whole international tax edifice crashing down, encouraging  other countries to retaliate with beggar-thy-neighbour treaty avoiding provisions? David Cameron has been a safe pair of hands as Prime Minister and is deserving of praise, but this latest gambit can only be explained in terms of cheap electioneering. It follows a developing trend that started with immigration bashing, and continued with threats to leave the EU. The paranoia of Britain’s ‘Knees up Mother Brown’, beer-swilling, fag-smoking UKIP party dodos has become contagious. Cameron did not see things done this way on the playing fields of Eton. The Prime Minister would do well to go back and read John Donne’s ‘No man is an island’.

Hungary for knowledge

What you get when people have no knowledge.

What you get when people have no knowledge.

1984 (the 326 page book, rather than the 366 day year of the same name) describes how a totalitarian regime could keep a lid  on knowledge through a Ministry of Truth, Newspeak’s Doublethink, and the dreaded Thought Police. Democratically elected governments have, traditionally, had more trouble in keeping a handle, let alone a lid, on their populations’ perceived excesses.

Of course, even democratic societies were not always as liberal as they are today. As I have written previously, until the middle of the 19th century, tolerant Britain applied punitive stamp duty to newspapers. The aim was to prevent the rabble from being able to afford to read the subversive political pamphlets that proliferated over the combined Hanoverian  reign of the various Kings George.

With the two World Wide Wars receding into distant memory, and the World Wide Web taking off in the 1990s, even hitherto totalitarian regimes had to adjust their bugging policies. The idea that it was possible to control the flow of knowledge started to look passé.

Hungary also had the best football team in the world

Hungary also had the best football team in the world

And then there was Hungary. Hungary, the country that had courageously revolted against the Soviets in 1956. Hungary, the country that led the way out of the Warsaw Pact and, in the 1990s, was a trailblazer for the new Europe. Hungary, the established member of the European Union.

Under its right-wing leader since 2010, Viktor Orban, Hungary has been looking increasingly smelly. Last month, the Government announced a draft law that would impose on internet providers a 150 forint (60 cent) tax on each gigabyte of data.  Coming as it did around the anniversary of the 1956 revolution, the people got quite shirty. Realizing that their internet bill was going up, all hell broke loose, and the other day Mr Orban had to backtrack.

Of course, the whole thing was probably a lot more sinister than that. A democracy cannot tell people what to think but, like the governments of all those German Georges back in the old days,  access to information can be squeezed by price.

The world fought long and hard for its freedom throughout the 20th century, including ridding itself of the Austro-Hungarian Empire. Freedom of expression, and access to opinions so expressed, is a critical part of that achievement.

Boy George who will be King

Boy George who will be King

A prominent Rabbi once told me that, when his grandfather fled a Russian pogrom early in the last century, he determined to make a new life in America. Stopping off for a few days in England, he went to Hyde Park’s Speakers’ Corner on Sunday morning. Standing on a soap-box, one of the many speakers was insulting Britain’s indolent King (not called George, but his son, grandson, and great-great-great-great grandson were/are). He decided that any nation  that allowed its people to freely criticize its monarch must be a great country and cancelled his plans to continue to the New World. Good choice.


Sir Tom Finney not looking very illiterate

Sir Tom Finney not looking very illiterate

“I fail to understand why any of you would be interested in twenty-two illiterate young men kicking an inflated pig’s bladder around an oblong of grass.” A bible-bashing preacher doing the rounds of Lancashire’s pubs in late-Victorian England? Not quite. Actually, the headmaster of my school (see previous post) in mid- 1973 berating a hodgepodge of gormless fifth-formers for bunking off  around the corner to the Hendon Hall Hotel to see the England team.

For those of you not acquainted with sophisticated evenings of lager and lime  at  the irrevocably stained bar of  that  starless Inn, whenever there was a game at Wembley (if you don’t know what Wembley is, this Post is not for you) one team stayed at the Hendon Hall and the other at the Brent Bridge. Knee-high to a grasshopper, I had accompanied my Dad there seven years earlier, and watched transfixed as Charlton, Hurst, Moore and pals passed within tackling distance of where I was standing.

D Day plus 22 years

D Day plus 22 years

A day later Moore was raising the Jules Rimet trophy, his team having shown the Hun good and proper  for the third time that century who really ruled Europe. (On the first two occasions, victory had not required a disputed goal from Geoff Hurst but did involve an American front line).  Of course, in 1973 the England players were gloriously on their way to not qualifying for the Finals, let alone the Final. But then, there only ever was one real World Cup Final.

As the 2014 Brazil World Cup approached, everyone seemed a little too preoccupied to pay much attention to it. The press was taking  far more interest in what was waiting  in store for football fans in 2022. I could not begin to understand why people were so shocked at the Sunday Times expose of the alleged corruption that bought Qatar the hosting of the competition. Now, I am a fairly ambivalent football fan. I was born with two left (very flat) feet, a left head and a left eye-for-the-ball. But even I know that, when you have an entire planet to choose from for staging the most important competition in the game’s calendar, you do not go for a country where (1)there is no beer (2) there is no grass and (3) there is no thermostat. Not unless, of course, there is money in it.

In the meantime, the almost octogenarian Septic Bladder, who has presided over the FIFA shenanigans since 1998 is well placed to be elected to a fifth term as President at the special Congress to be held next year. It turns out that the 209 member nations  have an equal vote so, similar to that other den of iniquity – the United Nations, the mice can rule the house.

Various ideas have been mooted for solving the problem including, curiously, asking Switzerland (the home of FIFA) to revoke its tax-free-not-for-profit status. While I recite 15 times every morning: “tax makes the world go round”, I fail to understand how this will solve anything other than forcing the national leagues to fork out more spondoolies.

The Queen's grandson-in-law looks like he could sort out Septic Bladder

The Queen’s grandson-in-law looks like he could sort out Septic Bladder

It would seem to make much more sense for the wealthy leagues and nations to insist on “one dollar one vote” , which would relegate all those runty little nations to the sidelines. In addition, similar to nations for whom democracy is not a foregone conclusion, there could be election observers. In this case, it would not have to include that gratingly annoying failed president, Jimmy (pronounced ‘Jimmuh’ ) Carter, but perhaps a group of people from another sport. Given the scandals in Cricket (‘You know, it just isn’t Cricket”) maybe they should go for Rugby (albeit, itself not with lillywhite hands). With Football traditionally a game for gentlemen played by thugs and Rugby a game for thugs played by gentlemen, they could bring in some of the Hooray-Henrys to clean things up. Even the Queen’s (there is only one Queen) granddaughter is married to a Rugger Player. And, if FIFA didn’t play the game, who could be better placed to put the boot in.

I hope it is not too late to send Qatar packing. FIFA could be reminded that there is one country that has proved itself in the last two years supremely capable of organizing a major international sporting event while having plenty of world-class football stadiums ready and waiting. And, no, I do not mean Russia. They have already bought the 2018 extravaganza to sit side-by-side on Putin’s sideboard with the Sochi Winter Olympics (Sochi, like Qatar, is short on snow). Ambivalent fan or not, in mid-July 2022 I hope to be standing outside the Hendon Hall Hotel.


Down Wiv Skool

Arvind Mahankali won the National Spelling Bee by correctly misspelling Kneydl

Arvind Mahankali won the National Spelling Bee by correctly misspelling Kneydl

I was chatting the other night with my middle son when he came out with the word “procrastinate”. He also knew what it meant – not bad for a young man neither born nor bred in an English-speaking country. While ‘procrastinate’ is not as complicated as ‘antidisestablishmentarianism,’ the word does have as many syllables as  that old spelling bee horror: ‘Mississippi’.

“Procrastinate” is a word that should be on every English-speaking tax advisor’s lips.  Meaning ‘Manana’, it is what tax authorities the world over are truly expert at doing. If tax authorities ran hospitals, patients would all be dead  from untreated disease or old age.

It may therefore come as a surprise that ‘procrastinate’ is a word I do not use. I do employ lots of other words to convey my feelings to the tax authorities which, over the years, have got me into several scrapes requiring a grovelling apology the next day – but “You incompetent procrastinator” never made it to the top of  my windpipe.

My singular avoidance of the word has its roots in an event 40 years ago this month.

While the rest of the world was celebrating the 30th anniversary of the D Day  landings in Normandy, I was experiencing my own Dunkirk.

In June 1974, at the ripe old age of 16, I sat my O levels. For those not raised in Britain or those too young or too old (they are coming back in 2017) to remember them O levels were, coupled with the horrendous 11-plus,  the components of a peculiarly patrician British examination system designed to ensure sufficient dropout at 15 or 16 to maintain  supply  of  barely educated labour to the mines, factories and clerical jobs. (There were also ‘immigrants’ who drove the buses and suchlike, but they were  called other names then that are no longer de rigeur).

We should have been so lucky

We should have been so lucky

About two hours after completing the paper in English Literature I received a call at home from the school secretary that the headmaster (principal) wanted to see me “Now!”.  Not having the faintest idea what I was being summoned for, I remember sauntering calmly to school – despite the fact that the headmaster had a reputation as a  frightening despot. Arriving at his study door, I was ushered in. I think I know what condemned men in US prisons feel when they enter the Death Chamber. The headmaster, cruelly disfigured by acute arthritis,  sat at his desk smoking his beloved pipe. Next to him stood the superannuated  chief invigilator, a truly dreadful man who had been an amateur boxer in his younger days and was a diabolically poor maths teacher to boot. The latter  wore  his trade-mark fixed grimace. Various other senior masters littered the room in diverse states of discomfort.

“Is this yours?” It was the headmaster creaking his head in the direction of the far edge of his desk.

Following his line of sight,  my eyes landed on the pink answer book that had my candidate number on it. Now, readers, you will doubtless share with me the feeling that, similar to watching a coffin being lowered into a grave at a funeral, when you hand in an exam paper, it is your fervent desire that you will never see it again. So, shocked by the situation, I answered the obvious: “Yes, sir.” I saw the invigilator’s mouth lengthen into a pencil-thin smile.

“So, you admit it, do you?” The headmaster again.

“Of course. It is my exam paper…sir”

‘Not the exam paper, boy (they really did speak like that in those days – TB). This’. He manoeuvred his arm toward the exam book and clawed at a heavily folded piece of white paper perched on top of it. He waved it in my direction. I took it and opened it. It was a series of brief crib notes on Sean O’Casey’s “Juno and the Paycock”.  The first line contained one solitary four syllable word. You guessed it (No, it wasn’t Mississippi).

“Mr E***** (he of grimace fame) found this in the examination room and, after carefully checking the handwriting of all the papers, has come to the conclusion that it is closest to yours.” E***** was clearly as good a graphologist as a maths teacher.

I managed to compose myself.

“Sir. If you look closely, this is clearly not my handwriting. Furthermore, if you look for the word “Procrastinate” in my paper, you will not find it”. I even ventured a little joke from the gallows: “I wish I HAD known the word. It might have bought me a few more marks.”

“It is our intention to send it to the University Examination Board and let them decide”.  This was positively frightening. Whatever else I was or wasn’t in school, I was always known as scrupulously honest. At the University, I would just be a number and my – as yet not quite – budding academic career could be prematurely ended by a summary trial and execution by firing squad.  With that, the inquisition ended and I was dismissed to mull over my future.

The bottom line was that, following the intervention of a number of civilized members of staff and, I believe, the Headmaster waiting enough time to shake the Chief Rottweiler off his tail (tale?), I was informed a few days later that the matter was closed.

As regards that English Literature exam, I have to admit (perhaps to the surprise of some readers), that I was not much into it in school. I did scrape a minimum “Pass” grade largely thanks to the fact that the black-and-white movie version of one of the two set-books was shown on television on the Sunday afternoon prior to the exam – thus negating the need to read the wretched thing.

I didn't make it up

I didn’t make it up

As Chick Flicks go, the 1939 Oscar-winning adaptation of Emily Bronte’s Wuthering Heights scores pretty high on the Kleenex charts. A weepy if ever there was one, the most poignant scene has to be the death of Cathy (Merle Oberon) . Determined to maximise the pathos , the immortal William Wyler directed that, while the emotionally stunted Heathcliff (Laurence Olivier) took adulterous centre-stage, Cathy’s hapless husband, Edgar Linton (David Niven), should cry bitterly as he bent over the body (and they say the modern world is immoral). When Niven failed to produce the tears, the prop man blew menthol into his eyes resulting in him ejaculating the entire contents of his nose over the corpse. The hitherto dead Cathy proceeded to return immediately to life and run off screaming to the dressing room. Astute observers of the blooper-free scene on You Tube will notice that Niven does not make it any further than the end of the bed. While naughty Heathcliff gets to caress his dead mistress’s limp hand, Linton has to make do with his wife’s dead feet.

Many years ago, when my eldest son was in High School, he forgot to take something with him in the morning that was relevant for something-or-other that day. I was around  at home for some reason, so I offered to take whatever-it-was to him. Arriving at the door of his class, I observed total mayhem. Pupils were walking in and out, talking, shouting, standing on desks. I assumed it was Morning Break and sauntered in. Pleased to see me, my son suggested we went outside. As I was leaving the class, I noticed a teacher buried in a book at the front. Safely outside, I asked my boy what was going on. “”Oh! We are in the middle of an exam.” You couldn’t make it up.

Deading The Fat Man

In God We Trust

In God We Trust

Moral Dilemma – two words that do not feature prominently , jointly or severally, in the tax advisor’s lexicon.

In the first half of the 20th Century when world wars were all the rage,  moral dilemmas evolved from the gritty reality of combat.  By the late sixties serious debate was banished to the periphery of existence along with Bras and the Bible.

In 1967 the ubiquitous moral dilemma that had every moral philosopher  thinking involved a trolley hurtling out of control along a railway line towards 5 people bound to the tracks. All 5 were bound to die unless the chap with the moral dilemma diverted the trolley to a siding where a single individual would be unavoidably sent to kingdom come. Was the loss of one life preferable to the loss of five where there was an, albeit indirect, contribution to the lone death?

By 1996 the search for sound-bytes, together with advances in the human condition, had led to the addition of a bridge over the railway with a slobbering fat man sitting precariously on the parapet.  Our friend with the moral dilemma now had a number of choices. He could pull the lever and be the indirect cause of the unpleasant demise of the single person on the siding; he could let the 5 on the track go west; or he could – very directly – push the fat git off the bridge , thus dispatching him to an oversized grave while stopping the trolley in its tracks. (The chap with the moral dilemma would not sacrifice himself because (1) he was too thin to stop the trolley and (2) moral philosophers are often people with their heads up their own backsides who have difficulty practicing what they preach).

Although the Utilitarian answer to this conundrum would be a toss-up between diverting the  trolley or deflating the fat geezer  (a 5-1 win for the human race), it was established that  the most likely outcome would be to watch in horror as the 5 are trampled. Coming in second would be diversion of the trolley. The Fat Man would survive to spill over both sides of  the middle-seat on an economy flight to Australia, as well as to invariably eat the last cake on the plate.  Even though they could not  stand his guts –  normal people would shy away from actively taking the man’s life.



Last week I read in The Economist, however, that according to a recent book “Would You Kill the Fat Man?” when the question is posed to respondents in a foreign  language,  it is more likely that they will elect to kill the bridge-balancing- blubbery- baboon. This has nothing to do with xenophobia. (I must apologize to any rotund gentlement reading this post if I am sounding unintentionally offensive. I am currently on a diet trying to shrink my girth and I figured that, just like anti-Semites never become Jews and the English never become Irish – if I am disparaging enough about fat people, I will have conquered obesity for ever – fat chance).

The reason  cited for the different results when talking in a foreign language stems from something I mentioned in my blog of April 28:

Nobel Laureate Daniel Kahneman in his book “Thinking, fast and slow’ talks about “expert intuition” – a Fire Chief who senses exactly when to leave a burning house before it collapses or a Chess Master who can instinctively advise the next three moves in somebody else’s game. It turns out that this comes from enormous practice and experience and not some magical eureka moment –  a combination of System 1 (automatic) and System 2 (conscious) thinking. This allows for quick, highly complex, thoughts.

It turns out that when you are thinking foreign, you slide into System 2 thinking most of the time. As a result, while the Natural Born English Speaker instinctively decides he cannot shove the Fat Man over the edge, the foreigner is forced to ruminate more slowly over the question and is more likely to come to a utilitarian decision,  which might just explain why Germany started two world wars.

This has consequences for tax consultancy (and just about every other verbal interaction for that matter). Last week I met with a gentleman from   Southern Europe who, for the purposes of this post, we shall refer to as Umberto. Now, because Umberto was not called Frank, Henry or Michael, as we sat over some pretty complex tax issues I realized that, even putting my mouth into low gear and applying the hand brake, he was left hanging on for life to the rear bumper. Until I read the Economist article I assumed it was just a matter of language but now I realize that our thought processes were probably working on two different planes. The upshot is that, given that there are far more of them than us, English tax advisors should be forced to attend a course in English as a Foreign Language in which they are brainwashed into thinking in Pidgin.

What would he have made of it all?

What would he have made of it all?

It is parochial and naive to think that English has conquered the world. It is the world that has conquered English.

I think I am going to start speaking like Borat. It’s a very nice.


Go ahead punk, make my day

The good old days

The good old days

“This tape will self-destruct in five seconds.” In the 1960s, while the mission may have been impossible, information protection was very possible. Burned, swallowed or – until a bunch of  bored  students  were looking for something to do at the US Embassy in Teheran – shredded, there was no difficulty eradicating the evidence from the face of the earth.

How times have changed. I stayed late in the office last night to complete a compulsory on-line course on “Information Protection Fundamentals” concerning  the myriad risks to information confidentiality. Once upon a time you could buzz through the fifty-odd slides  (would I do such a thing?) and home in quickly on the test at the end. No more. Now you have to listen to a computer-generated Australian woman reading the entire caboodle at the speed of someone who really wants to inflict mental anguish. And just in case you were thinking of letting the lady talk away while you carry on with seriously chargeable time – should you forget to remind her regularly of your existence, she will self-delete and send you back to “Go”.

The presentation included a loveable rogue showing how easy it is to steal information. Although I am sure I must have missed something, it appeared to me that the deliverable was that you need to take the entire contents of your office with you (including the wastepaper basket) when you go out to lunch. Passwords must never be written down but should be so complex that they are impossible to remember in order that, in the event of the employee being waterboarded by representatives of a foreign government, his lips would remain sealed (however much he might like to spill the beans).

But what caught my eye was the bit about keeping the door open for strangers.

I was brought up to always check behind me as I went through a door and, if anyone was there, hold it open until the follower was able to take my place. Back in the 1960s they called this politeness. Not any more. Before letting anyone follow you without slamming the door  in his face, you are supposed to, albeit politely, make sure the visitor has a valid office pass. If not, you are instructed to escort him to the security officer who will then wrestle him to the ground and tie his arms behind his back before discovering he is the CEO of the firm’s biggest client.

No sooner had I completed the test with the unbelievable score of 90 (please don’t wake the neiighbours with your standing ovation) than I heard somebody trying to force the door of my floor. I ignored this at first on the grounds that this is what you expect to happen in an accounting office at 9.30 at night, but eventually decided to go and investigate. As I approached, I saw a rather unsavoury type  a few years younger than me (not your run-of-the-mill Big 4 client) rattle the handle one last time before passing an employee tag over the electronic sensor, thus gaining entrance.

Armed with my fresh doctorate in Information Protection Fundamentals, I politely asked him if I could help him. He looked at me nonplussed.

“Are you an employee of the firm?” I ventured firmly but respectfully (knowing full well that, even the most  Generation Y member of staff would have learnt on his first day how to use an electronic tag).

No answer.

“Could you tell me who is hosting you this evening?”

“I am with somebody out there.” At least it spoke.

What I thought I was doing

What I thought I was doing

I continued my friendly interrogation: “Can I see the name on your electronic tag please, or, I am afraid, you will have to leave the building?”

“I want to p***, you retard”.  He stared me down in absolute fury. “I am going to p*** and you can call the police if you want.”

Why is it that courses, online or otherwise, as well as Hollywood movies are always theoretical? The undesirable either comes quietly, runs off, or shoots the inquisitor in the head. The inquisitor is never left with the moral dilemma of whether to let the suspect relieve himself.  Not having much choice in the matter, I watched him thunder off in the direction of the bathroom and decided to await his return (the risk that he would make off with the faucets under his shirt did not reach the level of ‘more likely than not’). On his way back, he did his best to break another door before remembering what the electronic tag was meant for, and proceeded along the corridor towards me screaming insults directed at myself and my late mother. I genuinely believe he was about to hit me when a Y Generation employee – and owner of the tag – turned up and grabbed his arm.  It turned out, thankfully, that he was not a client (I remember an unkempt jeans-clad bloke once wandering into my office by mistake, and my treatment of him with mild but friendly sarcasm, assuming he was a workman who had lost his bearings. It turned out he was my next meeting – an extremely wealthy player in the local market. Fortunately, he took it well). This creep was involved in some project or other that we were checking – and I was relieved (sorry) to learn that there were no plans for him to darken our portals  again.

Who needs him?

Who needs him?

Although Information Protection in our technological world is absolutely crucial, I do wonder whether the practice can ever match up to  the theory. This has been particularly on my mind since the OECD reached a long-expected decision on May 6 that there is to be automatic exchange of information between members. Financial Institutions will be required to provide the tax authorities with information on foreign investors which will then be automatically transferred to their counterparts in countries of residence. Although miscreants may think they can take comfort in the authorities’ inability to deal with mounds of information, with the rate of progress of Data Analytics – sorting the wheat from the chaff – they are probably gravely miscalculating. As for the world’s tax authorities, although there will be conditions of confidentiality, the wide circulation of such information is bound to lead to horrible leaks  on the principle that “three people can keep a secret as long as two of them are dead”.


Whole in one

"YOU are teaching ME the Old Testament?"

“YOU are teaching ME the Old Testament?”

“I said: ‘Remember Lot’s wife. Never look back.’ I don’t know whether Henry had read the Old Testament or not, but I had, and he got the point.”

Thus spake that most Nietzschean of US Presidents, Richard Milhous Nixon, to Sir David Frost  back in 1977, mocking his former Secretary of State’s qualms about invading Cambodia. Knowing, as we now do,  Mr Nixon’s eloquent way with words, we can make an educated guess that what he actually said was: ‘Remember Lot’s ******* wife’. However, Mr President, we too got the point.

No fire and brimstone raining down on this house

No fire and brimstone raining down on this house

But for Nixon’s conceit, he might have realized that, born into an Orthodox Jewish family, Henry {Kissinger} would have learned the story of  the Pillar of Salt in the Hebrew original  long before studying   “Fun with Dick and Jane” or its German equivalent (and Dick and Jane did not have nearly as much fun as they had in Sodom and Gomorrah).  Posterity does not record whether Kissinger retorted by congratulating his boss on his command of the early chapters of Genesis while asking whether the paranoid President had ever made it as far as the story of King Saul.

Had Nixon’s line come up at the impeachment of President Andrew Johnson a century earlier, it would have been reasonable to  assume that everyone hearing it would have immediately understood its context without the need for mentioning not to look back.  A third of a century on from the  interview and Generations X and Y would now most likely miss the point entirely until saved by that artificial memory facility, Wikipedia.

An increasingly secular world has substantially lost its Biblical “lingua franca” and, even allowing for a huge dollop of atheism, as we celebrate the 450th anniversary of the birth of  the Bard an increasingly prosaic secular world has lost its Shakespearian “lingua franca” too.

Who has time to read the Bible?

Who has time to read the Bible?

Which brings me to the single question that frames Generations X and Ys’  deeper thinking: “Who cares?” or, to be more precise, “Who gives a ****?’ (and that is as precise as I am going to be). Well, boys, girls and those of you Xs and Ys who have yet to decide what you are, apart from the ability to communicate in something more elegant than two syllable grunts, such universally shared texts allow  sometimes complex thought processes to be shared in a flash.

Reading the OECD’s relatively tame  “Public Discussion Draft: BEPS Action 1 : Address the Challenges of the Digital Economy” published a few weeks ago, it occurred to me how important this lingua franca thing is and how, until now, I may have been barking up the wrong tree in advocating a complete recalibration of the international tax system.

As readers know, the OECD in conjunction with the G20 (or G19 as Russia is currently standing outside the Headmaster’s office) is pursuing an ambitious goal of straightening out everything that is crooked on the international tax scene. One of the biggest challenges is dealing  with the Digital Economy because, in the succinct words of  the milkman philosopher Tevya in Fiddler on the Roof: ‘It’s a new world, Golda’. In my heart of hearts I continue to believe that there needs to be a fundamental change in the basis of taxation including abolition of company tax. However, the Draft, which impressively analyzes the components of the digital economy, while opening the door to substantial changes on such issues as the definition of a permanent establishment, reduces the issues for treatment to the well-worn existing norms of international taxation.  That, after all, may be no bad thing.

Nobel Laureate Daniel Kahneman in his book “Thinking, fast and slow’  talks about “expert intuition” – a Fire Chief who senses exactly when to leave a burning house before it collapses or a Chess Master who can instinctively advise the next three moves in somebody else’s game. It turns out that this comes from enormous practice and experience  and not some magical eureka moment- a combination of System 1 (automatic) and  System 2 (conscious) thinking. This allows for quick, highly complex, thoughts.

When an experienced tax advisor is asked to analyze a situation of, say permanent establishment status, he or she will often intuitively know the answer immediately and then spend the next 25 hours (at premium charge-out rates) proving it right. The terminology is then used as  a lingua franca between members of the tax advisory team who can concentrate on producing a holistic answer based on the initial “findings”.  If the system were to be fundamentally changed we would, at least in the short to medium term, lose that hard-wired expertise and be forced into fully conscious thought processing taking one step at a time.  Apart from the additional hours required to deal with new situations (Yippidoo!), there would be significantly increased risk of  not catching the full picture. Insurance claims would increase (along with the number of disclaimer lines on memos and opinions).

And if you think the above is a load of nonsense, an experiment I and my colleagues were once subjected to (spoiler alert: If you like making a fool of yourself in public, do not read on) involved watching a video of a white-clad team and a black-clad team passing basketballs. We were told to count the number of passes made by the white team.  Concentrating so hard on the number of passes, we all failed to notice the pantomime gorilla walk across the middle of the screen, stop, beat its chest, and carry on.  In tax advisors’ parlance that gorilla could have been VAT, disallowable interest or a host of other tax planning side dishes that today would serve themselves up as expert intuition.

I still believe that one day the system will need to fundamentally change, but – just as  St Augustine (with whom President Nixon was doubtless better acquainted than was Kissinger) beseeched his Creator: ” Give me chastity and continence, but not yet” – I would rather wait a while (preferably, until I  retire).

nietzsche-is-deadIn the meantime, while reading of the Bible may be at an all-time low, new-release Hollywood blockbusters like “Noah”, “Son of God” and “God’s Not Dead” may get the lingua franca going again. Mind you, judging by the wholesale reworking of the Noah story, I hate to think what they would do with Sodom and Gomorrah.

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