We currently colour-code the taxes so it’s red for income tax, yellow for PAYE, blue for corporation tax and green for VAT. Sometimes a “tax” is actually just a forced loan, and we will start using purple or amethyst to indicate this when we report to the client. An example of a forced loan is where dividend tax is levied as a payment on account for a dividend that hasn’t actually been voted yet.
We will also use the colour brown for instances such as when the Personal Allowance is withdrawn on income over £100,000 to direct the client’s attention to their loss of human rights.
This system won’t flatter the Revenue, but we owe a professional duty to the Queen-in-Council to make sure that our clients understand the nature of how they are being taxed by the Queen-in-Parliament. Other colour-coded schedules which we prepare may be helpful to the Revenue. For example, we will often write a letter on behalf of a new company to explain what accounting periods have been adopted, and we will colour-code this in dark colours to make things clear.
Two things that the British people can be proud of are income tax and the National Health Service. Something we should be ashamed of is the introduction of Value Added Tax. Income tax is the tax that defeated Napoleon, but VAT looks quite like Napoleon’s revenge. If the income tax collection system starts to resemble the VAT collection system, then we are going to comment upon it.