Friday, January 14, 2011

Creative Accounting

As if January isn't a long and gloomy enough month here in the UK (though by the sounds of Yrsa's post, thankfully warmer than Iceland and drier at the moment than Australia), it's also the month the self-employed dread: the deadline for submitting your tax return.

Are there any authors capable of completing their own tax returns? I only ask because most authors I've met are barely capable of using a tin opener, never mind calculating profit and loss. I'm sure Michael of this parish knocks them off in his sleep, what with him being a mathematician. Perhaps Yrsa too, as a civil engineer, has a mind for figures as well as fiendish plots?

Count me in the incapable camp. I was terrible at Maths at school. It was a foreign language. I could handle the basics, knew my times tables, and long division was a cinch. Then along came fractions and algebra and that's where myself and maths stopped being friends, and soon became mortal enemies. Faced with a tax or a VAT return, the years fall away and I'm a clueless schoolkid again, wondering which way to hold up the protractor and daydreaming my life away during double maths.

Which is why, like many of authors I suspect, I outsource anything to do with tax. I have an accountant (he's called Money. Even if he wasn't any good - and he is very good - I'd still give him the gig because having an accountant with the surname Money always makes me smile.). I have also, wily cove that I am, married an accountant, as back up*. This has its downsides, however. I work with words, but when she asks about things like 'amortisation', 'intangible fixed assets' and 'depreciation' and I stare back as blankly as Alex after aversion therapy in Clockwork Orange, I can see her eyes roll and she wonders how she ever got mixed up with someone so clueless. I can see her point. I'm still coming to terms with the difference between gross and net.

A couple of years ago I needed to obtain a tax number so any earnings from my books in the US would not be subjected to tax both here and there. This sounded simple enough. I was wrong. Kafka would have rejected my experiences for being too labyrinthine. At one stage I had to fill in a form in order to fill in a form, but because I hadn't filled in one form, I had to fill in another form in order to fill in the form so I could fill in the form. Of course, I filled in half these forms incorrectly, and spent many hours at the US Embassy in tortuous discussion with the helpful IRS staff there (he says, choosing his words carefully). In all, it took more than a year to get a tax number.

I comfort myself with the knowledge that I am not alone. Every quarter, the Society of Authors sends a copy of its magazine for members, fully of nice bitchy articles about publishers and agents. There are few ads but the ones there are are usually placed by accountancy firms advertising their services for bewildered hacks like me, along with firms offering their services designing websites (so, we learn, authors are innumerate and technologically illiterate). As they keep advertising I can only assume they get a steady return. One of the most downloaded guides on the Society's web pages is its 'How to' on tax; while if you google 'author's and tax' you will get thousands of hits, mainly ten point guides, hints and tips.

Part of me likes to think that we authors are too creative, too lost in the imaginary world to be able to deal with prosaic world of accountancy. The truth is that we're too lazy and, in my case, too dumb to understand what it is we're meant to do, and too fearful of getting it wrong and the consequences. My father, a creative type, was once summoned to a meeting with the taxman to discuss certain 'irregularities.' He was given a hard time initially as they were convinced he was on the make. Then it dawned on his interrogators he was simply stupid. The problem was cleared up, a cheque written, an accountant swiftly hired, and an important lesson passed down the Waddell bloodline. If at first you don't succeed, beg, borrow and blag in order to find someone who can succeed on your behalf.


Dan - Friday

*My wife wishes to make it clear to any professional bodies reading this that she has never given me accounting advice in any form, and that she is affiliated to me only by marriage.


  1. Dan, only we, the utterly incapable, can understand the total inability to understand math.

    Like you, I got lost once more than my fingers were necessary to get the answer. Fractions were manageable but from the first day of algebra class, I got lost and stayed lost.

    Teachers were always asking why I didn't ask questions. I couldn't make them understand that I didn't know enough on which to base a question.


  2. Beth, I think our maths knowledge was on a par. I once heard a friend try to describe the beauty of maths, but he might as well have been talking Swahili. But then he looked a bit non-plussed when I extolled the virtues of Ross MacDonald.

  3. A bit late reading this one...
    I have the luxury of PAYE. For you non-Brits that translates as 'your employer does it all for you'! Tax is just a mystery to me. At the end of every tax year I get a summary of my 'account' and it might as well be written in Cantonese, as I would have the same level of understanding. I thought nothing could be harder until someone tried to talk to me about my pension statement...