"What?"
"To make the reins break." God, this was hard work.
"But…"
"But what?" I asked.
"I'd be the laughingstock," she said miserably. "Horses from Kauri House Stables don't go to the races with substandard tack."
"Would you rather be laughed at or arrested for tax evasion?"
It was a cruel thing to say, but it did bring the problems she faced into relative order.
"Thomas is right, dear," my stepfather said, somewhat belatedly entering the conversation.
"So it's agreed, then," I said. "We won't subject Scientific to the green-potato-peel treatment, but we will try and arrange for his reins to break during the race. And we take our chances."
"I suppose so," my mother said reluctantly.
"Right," I said positively. "That's the first decision made."
My mother looked up at me. "And what other decisions do you have in mind?"
"Nothing specific as yet," I said. "But I do have some questions."
She looked back at me with doleful eyes. Why did I think she knew the questions wouldn't be welcome?
"First," I said, "when is your next Value Added Tax return due?"
"I told you I don't pay VAT," my mother said.
"But the stables must have a VAT registration for the other bills, like the horses' feed, the purchase of tack, and all sorts of other stuff. Don't the race entries attract VAT?"
"Roderick canceled our registration," she said.
If Roderick hadn't already been dead, I'd have wrung his bloody neck.
"How about the other tax returns?" I said. "Your personal one and the training-business return. When are they due?"
"Roderick dealt with all that."
"But who has been doing it since Roderick died?" I asked in desperation.
"No one," she said. "But I did manage to do the PAYE return last month on my own."
At least that was something. PAYE, or Pay-As-You-Earn, was the way most UK workers paid their income tax. The tax amount was deducted by their employer out of their paychecks, and paid directly to the Treasury. The non-arrival of the PAYE money was usually the first indication to the tax man that a company was in deep financial trouble. It would have rung serious alarm bells at the tax office, and representatives of Her Majesty's Revenue and Customs would have been hammering on the kitchen door long before now.
"Where do you keep your tax papers?" I asked.
"Roderick had them."
"But you must have copies of your tax returns," I implored.
"I expect so," she said. "They might be in one of the filing cabinets in the office."
I was amazed that anyone who was so brilliant at the organization and training of seventy-two racehorses, with all the decisions and red tape that must be involved to satisfy the Rules of Racing, could be so completely hopeless when it came to anything financial.
"Don't you have a secretary?" I asked.
"No," she said. "Derek and I do all the paperwork between us."
Or not, I thought, as the case may be.
I was pretty certain that my mother's individual self-assessment tax return, as for every other self-employed person in the United Kingdom, should have been filed with the tax office by midnight on January 31 at the very latest, along with the payment of any income tax due. Unlike in the United States, where the filing date is April 15 and one is able to file for an extension, in the UK January 31 is the deadline, period.
I looked up at the calendar on the wall above her desk. It was already February 9. There were no exceptions to the deadline, so she would have already incurred a penalty for late filing, to say nothing of the interest for late payment.
I'd checked the tax office website on the Internet. It confirmed that she would have notched up an automatic one-hundred-pound late-filing penalty plus interest on the overdue tax. It also said that she had until the end of February before a five percent surcharge of the tax due was added, on top of the interest.
Very soon now, the Revenue was probably going to start asking difficult questions about my mother's accounts. The time left to sort out the mess was unknown, but it had to be short. Maybe it was already too late and the Revenue would be at her door in the morning.
I wondered about my own tax affairs.
As an employee, I paid my tax as I earned through the PAYE system, which meant I didn't need to complete an annual tax return. The army deducted my tax and National Insurance before it paid the remainder of my salary into my bank account. Mostly they took off my board and lodging costs too, but there hadn't been any of those for a while. Even the army couldn't charge me to stay in a National Health Service hospital.
Sometime soon I should be receiving a tax-free lump sum of nearly a hundred thousand pounds from the Armed Forces Compensation Scheme, although how they could put a value on the loss of a lower leg and foot is anyone's guess. The major from the MOD had taken away my completed AFCS form with a promise that it would be dealt with promptly. That had been nearly three weeks ago now, but I had long learned that anything less than six months was "promptly" as far as army finances were concerned.
Perhaps it might help to keep the tax man's handcuffs from my mother's wrists. But would it be enough? And would it arrive in time?
I searched through my mother's filing cabinets, and eventually I found her previous year's tax return filed under R for Roderick. Where else?
The tax return was a piece of art. It clearly showed that my mother had only minimal personal income, well below that which would have incurred any tax to be paid. It stated that her monthly income was just two hundred pounds from her business, mere pocket money.
Perhaps the Revenue might not be knocking at her door in the morning after all, even if they could find it.
Possibly designed to confuse them, the return was not in the name of Mrs. Josephine Kauri, and her address was not recorded as Kauri House Stables. It wasn't even in Lambourn but at 26 Banbury Drive, Oxford. However, I did recognize the signature as being that of my mother, in her familiar curly handwriting.
Only the name was unfamiliar. She had signed the form Jane Philips, her real, legal, married name.
In the same filing cabinet, I also found a Kauri House Stables Ltd corporate tax return for the previous year. It was dated May and they were annual so at least we had some breathing space before the next one was due.
I looked through it. Roderick had worked his magic here as well.
How, I wondered, did my mother afford to pay two thousand pounds a week in blackmail demands if, as according to the tax returns, her personal income was less than two and a half thousand a year, and her business made such a small profit that it paid tax only in three figures, in spite of all the extras paid by the horse owners in nonexistent VAT.
But, of course, I could find no records of the profits made by the company called Kauri House Stables (Gibraltar) Ltd. In fact, there was no reference to any such entity anywhere in the R for Roderick drawer of the filing cabinet, or anywhere else, for that matter. However, I did find one interesting sheet of paper nestling amongst the tax returns. It was a letter from an investment fund manager welcoming my mother and stepfather into the select group of individuals invited to invest in his fund. The letter was dated three years previously and had been signed by a Mr. Anthony Cigar of Rock Bank (Gibraltar) Ltd.
Mr. Cigar hadn't actually used the term "hedge fund," but it was quite clear from his letter, and from the attached fee schedule, that a hedge fund was what he'd managed.
I sat at my mother's desk and looked up Rock Bank (Gibraltar) Ltd on the Internet. I typed the name into Google and then clicked on the bank's own Web address. The computer came back with the answer that the website was under construction and was unavailable to be displayed.