Speaking of tax dodges - one of my favorites is when Marvel's X-Men action figure maker Toy Biz argued in court that the X-Men weren't human (they were "humanoid mutants") because if they were humans then they'd have a 12% tax on them since they would be classed as "dolls", but non-human toys only got a 6.8% tax. Ironic, really, considering the source material...
This reminds me of labels that tell you to not do things while telling you exactly what to do. Like "Don't let the grape juice ferment for this long in this kind of container; that'd make wine."
Wasn't it precisely a question in this podcast in the early episodes? Or at least heavily mentioned in one episode. Edit: this one ruclips.net/video/5ufiFjb_-Ks/видео.html and funny enough the top comment is exactly about the lotus car trick! The loop is closed
Festivals used to have stalls selling little aromatherapy bottles (that look like essential oil bottles) it would have a huge label every where saying DANGEROUS DO NOT INHALE or something... it was called 'SNIFF IT!' with a cartoon of someone with it up their nose, and a plastic lid shaped to put up your nose... I never quite got what it was 'supposed' to be used for...
Other fun fact about the Lotus Seven: it's still produced today! Not by Lotus, but by Caterham, who continues to produce and refine it. Recently, they created a wonderful "back to basics" model, with a narrow chassis, and a little 3 cylindre engine from a Japanese manufacturer. When they tried to import it to Japan, a big market for them, they had a surprise: their car was actually fulfilling the criteria to be a keijidosha or kei car, the mini cars of Japan! This would mean lower taxes, and some privileges other cars don't have. It's hard to get the kei car status (even the original Smart struggled), but Caterham accidentally made it happen!
The crypto software that was exported from the US as a book containing source code in the mid 1990s was Phil Zimmermann's Pretty Good Privacy. I was one of the volunteers on the European side who typed the source code back in.
Up until the late 1970s the Heath company in Benton Harbor, Michigan made a variety of electronic kits that hobbyists could put together from the detailed instructions provided. The largest kit they sold was a large screen console color TV, which cost the equivalent of over $1000 today. Another company (it may have been DeVry, but it could have been one of its competitors) was known for selling correspondence courses in various technical fields, which were good enough to qualify for GI Bill grants. They sold a correspondence course teaching how to be a TV and electronics repair technician, and incorporated the Heath color TV kit into the course. Each lesson teaching a basic principle of electronics included assembling a step or three of the color TV and testing it. When the course was successfully completed, the student had a diploma and a color TV. And if the student was a qualified veteran, Uncle Sam paid for the education and the TV!
I was once working with a research group being funded by the government. The research group decided they needed an additional computer (to the dozen or so they had), they had enough money left in the research grant but a computer fell in a special category that was not covered by the line items that still had money left. So, they worked with the salesman for the computer company and ordered a complete set of "spare parts" which _was_ covered, and they got a slight discount by having it shipped as a complete computer (since manufacturing then didn't have to count out all the individual parts). We then mounted the fully assembled kit of spare parts into the rack and hooked up the "spare" terminal to it and used it as an additional computer, when it came time to give it a name, it was obviously "spare". 🙂
Along those lines, I worked in a lab where we needed a non-standard electric socket installed for a specific piece of equipment. We were supposed to have the university's electric shop do the work, but they were giving us a 6 - 9 month wait to do the job, so we ordered the socket from a local electronics supply company "with installation".
My guess was going to be that they excluded one key part, which it was expected that the buyer would find or make themselves - the steering wheel, say. "It can't be a car, it's got no way to steer it!" seems like the sort of argument a tax dodge would use. Then anyone handy enough to make a kit car would just use the attachment point and add a wheel to it. But this works too.
@@gtv_archangel Always? I would have thought for a Lotus it would be included. Transmission as well. Those are hands down the two most complicated parts of a car. But if Lotus was using engines and transmissions from 3rd party suppliers, then yeah, I could see that being a separate purchase. But the fact that this was a tax dodge hints (to me) that this kit included everything. If the kit did not include an engine or transmission, I would think it wouldn't face import taxes.
The Lotus 7 (and later Caterham 7) had/have the engines included, but many kit cars (like the Superformance and Factory Five replica Shelby Cobras) require you to source your own engine and transmission.
It seems that the real issue is that kit cars were already tax-free _unless_ they came in with instructions: "Under the Purchase Tax system of the time cars supplied as a kit did not attract the tax surcharge that would apply if sold in assembled form. Tax rules specified assembly instructions could not be included." (Wikipedia article on Lotus Seven) So you could legally get a car without paying the tax if you went through the trouble of buying its parts and assembling it by yourself without a set of instructions provided by the manufacturer, just your wits, your mechanical knowledge and this convenient _disassembly_ manual that just so happened to arrive in the mail.
@@taimunozhan could they get round it by selling the instructions separately? Or maybe from a "different" company (sorry no instructions, you'll either have to figure it out yourself, or our friends at Lotus Publishing have a book you can buy...)
The Lotus Seven was an important car, and there's a very good reason why you would not mind having it as a kit car: it's easy to make it into a racecar, the type that you would often disassemble and modify. And if you are going to work on it basically every time it's back in the garage, you might as well built it yourself (it's quite rudimentary), and save the extra cash. Today the Seven is still produced, not by Lotus though, but it remains one of the best driver's car available, and one of the most important cars of all time. 😊
Pity nobody brought up that it's the car from the intro to the TV programme "The Prisoner" because that would have sparked a whole new area of theories :D
I got it around the same time as Tom, remembering workmates saying that the Haynes Manuals were notorious for saying "assembly is the reverse of disassembly".
1:40 - Yup, I remember when that was a thing (it might still be a thing?), there was a website - and this was early days for websites - where you could click a button to send some bit of cryptography to an email address in Cuba and thus be legally considered an international arms dealer. I'm not ashamed, I definitely clicked that button.
Scrabble had a similar issue. The American company had the tiles made outside the US, and the US government declared that the sets of ties, sans board, still counted as a complete game. The workaround was to send the consonants and vowels separately.
Initial thoughts: the instructions were "how to not build the car from these parts" or "how to disassemble the car" and just follow it in in reverse. Very similar to the grape juice brick to make wine.
I thought they might have said "we don't ship to private customers, but if you want to be an independent contractor and buy a few, finish construction, and sell it on, you can do so", making it a business to business purchase where tax can be manipulated more easily
My initial thought was that there were a few parts that needed some simple machining to be 100% finished and then usable in the car. Because: then you did some of the manufacturing. I think some rifles are sold that way here in the US, as "kits" that you do a little finishing on. Avoids some of the gun regulations. But disassembly instructions is also clever! I watched a lot of Top Gear in the past (Clarkson, Hammond, and May), and I remember them showing some Lotus cars, but I don't think they ever mentioned the kit aspect to some models (as mentioned here), let alone a way to get around import taxes.
The 80% lower receiver for an AR15 pattern rifle. 80% of the machining work is completed by the manufacturer. Some have jigs and templates the unfinished receiver can be mounted in to do the finishing work with drill bits and other tools provided with the finishing kit. When a person completes one of these they're supposed to give it a unique serial number and in States that require firearms registration, register it. For people with more money and less skill, there's the Ghost Gunner CNC milling machine designed specifically to hold 80% lowers and accurately complete the milling. After carving out your lower, the machine can be adapted into a general purpose CNC milling machine but it's pretty small. The Ghost Gunner was recently updated to where it can mill AR15 lower and upper receivers and metal frames to hold Glock19 pistol components - starting from plain blocks of aluminum.
@@kantpredict Sounds like a great challenge. I never saw that. I have a friend that grew up in the UK and he used to live a few miles away and he would DVR episodes from BBC America and we would watch them when I visited him. For awhile I also knew of a website years ago that was great for streaming episodes. But I know there are plenty I never got to see. I do vaguely remember one where they assembled what vaguely resembled a car, they started with a frame that was pipes, might have been Lotus, might have been TVR. Just put a bunch of batteries on it and drove it like 30 miles? The body was sheet metal they crudely fitted to the frame.
@@comicus01They discussed a bunch of kit cars on the show - one notable one was a Stratos kit car. There is an entire category of cars, called exocars, that are all kit cars in some way. You have a donor engine, some parts of an existing car, a roll cage and some other bits - using which you get a full car with the highest possible power/weight ratio. A UK-based one I remember is the Exobusa, which has a Hayabusa engine and weighs around 400kg, giving turbocharged versions close to 1hp/kg.
So called loopholes are mostly intentional, while evasion like this required fraudulent behaviour which any proper tax law should be able to strike down.
For those of us old enough to remember newspapers and if you're a sports fan, then you always read a newspaper from the last page first (where the sports news was). So reading these Lotus instructions starting from the back page would be natural for us old sports fans. My guess at the ruse was you were paying several thousand quid for the book, which is tax free, and the car parts were free.
When the question started, I was wondering if this was a repeat upload or something because I was sure I already knew that one from here. It took me a bit to remember - I had actually read it in the comments for the "juice brick" question, not from the show itself.
First, Lotus then wasn't what is Lotus now. Lotus was sort of a race car, not at all built for leisure or comfort. Second, the whole reason it was offered as a kit was to reduce the cost of buying it. Third, you not wanting to work to build it or trust anything you might have built de-selected you from having this race car.
Probably the tires had a pressure guide on them, and maybe the same for the bolts? Otherwise, maybe there's just a general rule of "tighten it normally", or the guide says things like "Reduce it from 9001 torques to zero and remove the bolt".
Simple, in the disassembly instructions, just list the minimum loosening torque, and how much pressure to let out of the tire in order to remove it from the rims😅
Re the crypto reference: Back when DES (the full 52-bit version) was still considered a WMD, so illegal to export, I was able to order the relevant FIPS publication which described the algorithm in excruciating detail, including the wiring of all the S-boxes as well as the initial permutation which had been added by the NSA. They obviously took it for granted that only native US programmers would be able to turn the book explanation into a sw program. EDIT: That NSA addition was never explained so many thought it was there to give a backdoor for NSA only, but in reality it was a step needed to make DES resistant to Differential Cryptanalysis, an idea which was re-invented decades later. (I played a small part in the DES replacement program, the AES competition, about 25 years ago, helping to make CERN's candidate about 3x faster so that it became competitive with Rijndael, the eventual winner.)
Most kit cars are not complete cars built from the ground up, they're really just body panels and other parts that are retrofitted to an existing "donor" car. Here in the USA many of the original kits were made to fit the Pontiac Fiero and the VW Beetle. These days companies are making them to fit more ubiquitous donor cars like Honda Civic, Chevy Cobalt, etc.
Funny you joke about Lotuses being glued together, they actually are! Lotus developed an innovative form of heat activated adhesive to bond the panels together on the Elise. So they are glued together, but it's glue that needs to be baked first.
I remember tale of Ford importing their TransitConnect vans as passenger vehicles (they were/are assembled in Hungary) and converting them to cargo vans because of taxes. They took the extra seats out and filled in the windows. Even crazier, they could not just send the now-surplussed parts back to be used in the next batch, the seats and windows had to be destroyed. It was cheaper for Ford to do all of this, than to just import the vans _as_ cargo vans! 🤪
When the UK was part of the EU, an uncle of ours bought a BMW in Germany for export to the UK, meaning he would pay VAT in the destination country. He parked it at friends house for a year, then when he shipped it claimed that being a year old it was "second hand" and avoided the tax.
My initial thoughts were that they had local parts manufacturers for popular countries or they sent the instructions separately (perhaps by fax given the era).
3/4 of the way through, Im thinking of prohibition era 'Home definatly not wine kits', written on the tin how to make a big ol few gallon jug of 'fruit juice cordial' from the syrup in the tin. I cant remember if it was 'exposing to yeast' or 'adding extra sugar', something like that, would exceed state laws or something. So be extra double sure *NOT* to add *this thing* and leave under the bed for a week, like the good little boys and girls you are. Im going with it was shipped with all the parts and a Workshop Dis-assembly manual for how to precicely pull it apart. but if you read it like a manga, back to front, it was exactly how to unpack the crates and build the thing? I like that, thats my bet.
These days Lotuses are pretty much just held together with glue, but they get quite offended if you call their fancy bonding process "glue" so make sure there are no Lotus engineers around when you say that!
Ah yes, the old write the construction manual as a disassembly manual. I was really damn sure that was the correct answer when I read the question, but I was absolutely sure of it @7:00 timestamp.
Hah! Like the kid who made delicious panini sandwiches at his university, and other students paid him to make a sandwich. The university put a stop to it saying he doesn't have a vendor license nor food handling permit. So, students started purchasing a paper napkin for $3 that happened to come with a free sandwich if you choose.
There was another tax wheeze which I'm pretty sure was Lotus, where the guys building the cars at the factory could take a day off, come to your house and you'd pay them cash to build the car for you.
In the 1980s, Subaru dodged an incredibly high import tax on trucks into the USA by simply bolting seats into the bed of their BRAT mini pickup, and calling it a family vehicle.
The seats were welded in. If they were bolted in the Brat would still have been classified as a light truck and subject to the 25% import tax. That same tax is why the Outback was only available in the USA as a four door. 2 doors with a bed = light truck. Add two more doors and more seats, it's a passenger vehicle with a large and lidless trunk.
@@greggv8 i think you mean the Baja, not the Outback. The Outback is a wagon. And the seats were bolted in, all seats are bolted in. The support crossbar was welded in, but seats have to be replaceable and repairable. They don't weld seats into the Ford Transit Connect, they bolt them in. Every Transit Connect comes to the US as a passenger model with a full compliment of seats, then the ones ordered as cargo vans get converted when they get here, and that counts to evade the tax.
@@musewolfman The frames for the bed seats in the Brat were welded in. Do a google for subaru brat seats welded in and you'll find a ton of references to that, along with people asking or telling how they changed them to bolt in so they could take them out and have full use of the bed, while still being able to put them back in. Those Brat seats have been transplanted to other vehicles like Rangers and Subaru Bajas.
@@greggv8 that's what I'm saying. The frame, the support bar, whatever you wanna call it, yes. The actual seats that hug your ass are still able to be unbolted from that.
I didn't think he was joking about the glue at all because Lotus does actually use an aluminum chassis stuck together with epoxy in the Elise today. Not sure if you could expect a hobbyist to be able to work with heat-bonding epoxy, though.
Because the UK laws and regulations specifically stipulated that a kit car was comprised of some or all of the parts and an *assembly* manual or instructions on how to put the car together. Due to the precise wording not saying anything about including *disassembly* instructions nor specifying what state the parts would be in, ie assembled or not, Lotus got away with shipping out car kits that by the laws of their country were legally not kit cars. The legal assumption would be that buyers would somehow figure out how to put the parts together correctly, and when they were done with that they'd have the book describing how to take it apart.
I love the idea of an awful romance novel that contains instructions to build a Lotus Super 7! bodice ripping and car-building instructions; what a great combination! just think of the innuendos with the word "screw" alone! not to mention "shaft."
The immidiate thought was they exclluded some crucial part that made it "techincally not a car". Would be hillarious is somthign silly like "the ignition key" was missing, but probably somethign small and generic the customer could easly get themselves later, maybe "a steering wheel"?
I think Tom should take comfort in knowing that you can't register a self-built car in the UK without it being inspected by the DVLA or similar. It is like an MoT that takes several times as long.
I believe the "printed copy of PGP's source code is free speech" thing was actually ruled in court that way. Also... why did making it disassembly instructions get rid of the tax? I don't get it.
Because of the wording of the law. You were allowed to sell individual car parts at a lower tax rate, but if you included assembly instructions it was considered to be a kit car and therefore a higher tax had to be paid. Lotus argued that they were selling spare parts packages for existing cars, and the disassembly instruction was added so that the car owners could correctly remove any broken part when repairing their car. Therefore the booklet served a different purpose to an assembly instruction. Given the wording of the law, this did not match the definition of a kit car.
Yeah, that was a cruicial peice of information that I don't think was mentioned. I was thinking the same, you still have all the parts of the car. Surely they could have just sold the instructions separately?
I was sort of hoping for a reply to the last comment, saying something like "That is why owners of Lotus kit cars are a bit different from owners of regular prebuilt cars."
Tom!!!! I know you don’t really do this, but PLEASE PLEASE PLEASE listen to ‘One piece at a time’ by Cash, and record your reaction. If you have reasons why you don’t want to, I get it, but I’d love to see your gut reaction to that song.
7:05 No! Did they just put the instructions on how to DISASSEMBLE the car into the manuscript, and customers needed to read it like Manga (i.e. "backwards" 😁) ? EDIT: No way? Tom got it a few seconds later 🤣
I don't understand why the tax authorities and courts wouldn't just consider the "disassembly manual" be merely a disguised assembly manual, and tax the car like any other car that comes with an assembly manual.
“Remove the 13 mm bolt, which was tightened to 120 Nm at assembly.” (USanians: Insert your own units like, I don’t know, 17/32 furlongs per fortnight or half a dozen horsepower-quartermiles, at your own discretion.)
My ideas: 1.The parts in instruction manual are sold separately. 2. The book contains no words and is entirely illustrated And therefore does not qualify as an instruction manual. 3. It is sold as many separate kits, none of which contain parts that interlock and therefore do not qualify as a kid. The book is sold separately as well in separate issues as a hobbyist magazine.
A manga would have the steps in reverse (correct) order, but each individual step need to be reversed. So instead of "turn counterclockwise and pull out to unlock and remove part" the person would actually want to push in and turn clockwork to lock into place. Every step needs to be reversed like that for it to be assembled correctly.
For quite a while there, my theory was that it was not a real car, but a proper kids toy modeled after the real thing.. Think LEGO toy scale. (Fine, adults can play too!) Between all the gearing stuff and basic electrical shenanigans, it could completely propel itself. xD
Never underestimate the amount of work people are willing to do to avoid taxes. But here it’s obviously the feeling of accomplishment that is the important part. But, I buy a newly built apartment every decade in order to avoid doing certain maintenance. I also enjoy manual labor but with some supervision.
And there I was wondering whether they tried to reclassify the car parts as pieces of art for whatever reason- as a maker of sports cars, it seems plausible they might think of their products that way
The Lotus 7 exited the factory a jumble of parts and body panels, with assembly left up to the buyer. This was done primarily for tax reasons, as there was a heavy tax levied on assembled cars imported to the U.S. Even if Lotus shipped the parts with an assembly book, the tax would remain. To get around this, each Lotus came with "disassembly" instructions, which could be followed in reverse to build the car.
![Blox Fruits Dragon Rework Update [Full Stream]](http://i.ytimg.com/vi/EqDAp8udhm0/mqdefault.jpg)
Speaking of tax dodges - one of my favorites is when Marvel's X-Men action figure maker Toy Biz argued in court that the X-Men weren't human (they were "humanoid mutants") because if they were humans then they'd have a 12% tax on them since they would be classed as "dolls", but non-human toys only got a 6.8% tax.
Ironic, really, considering the source material...
Jaffa cakes.
This definitely highlights the stupidity of having two tax brackets for the same thing.
@@TheGreatSteve Tomatoes.
The big question there is: Why the hell are dolls taxed differently than other toys?
As a guess they are sold more for more money. Just considering Barbie and how dolls tend to be the most profitable toys@@wave1090
This reminds me of labels that tell you to not do things while telling you exactly what to do. Like "Don't let the grape juice ferment for this long in this kind of container; that'd make wine."
Wasn't it precisely a question in this podcast in the early episodes? Or at least heavily mentioned in one episode.
Edit: this one ruclips.net/video/5ufiFjb_-Ks/видео.html and funny enough the top comment is exactly about the lotus car trick! The loop is closed
I see the lateral thinking you did there.
"Never take cough syrup and mix it up with iodine and lye."
Festivals used to have stalls selling little aromatherapy bottles (that look like essential oil bottles) it would have a huge label every where saying DANGEROUS DO NOT INHALE or something... it was called 'SNIFF IT!' with a cartoon of someone with it up their nose, and a plastic lid shaped to put up your nose...
I never quite got what it was 'supposed' to be used for...
@@littlemissevel3607 im guessing it was a very energizing aromatherapy this one
Other fun fact about the Lotus Seven: it's still produced today! Not by Lotus, but by Caterham, who continues to produce and refine it. Recently, they created a wonderful "back to basics" model, with a narrow chassis, and a little 3 cylindre engine from a Japanese manufacturer. When they tried to import it to Japan, a big market for them, they had a surprise: their car was actually fulfilling the criteria to be a keijidosha or kei car, the mini cars of Japan! This would mean lower taxes, and some privileges other cars don't have. It's hard to get the kei car status (even the original Smart struggled), but Caterham accidentally made it happen!
That's a wonderful little factoid :)
@@BaeYeou thanks! I thought so too 🤭
The crypto software that was exported from the US as a book containing source code in the mid 1990s was Phil Zimmermann's Pretty Good Privacy. I was one of the volunteers on the European side who typed the source code back in.
This had to have gone down as the slowest ctrl-c + ctrl-v since the days before the Gothenburg press
Up until the late 1970s the Heath company in Benton Harbor, Michigan made a variety of electronic kits that hobbyists could put together from the detailed instructions provided. The largest kit they sold was a large screen console color TV, which cost the equivalent of over $1000 today.
Another company (it may have been DeVry, but it could have been one of its competitors) was known for selling correspondence courses in various technical fields, which were good enough to qualify for GI Bill grants. They sold a correspondence course teaching how to be a TV and electronics repair technician, and incorporated the Heath color TV kit into the course. Each lesson teaching a basic principle of electronics included assembling a step or three of the color TV and testing it. When the course was successfully completed, the student had a diploma and a color TV. And if the student was a qualified veteran, Uncle Sam paid for the education and the TV!
I was once working with a research group being funded by the government. The research group decided they needed an additional computer (to the dozen or so they had), they had enough money left in the research grant but a computer fell in a special category that was not covered by the line items that still had money left. So, they worked with the salesman for the computer company and ordered a complete set of "spare parts" which _was_ covered, and they got a slight discount by having it shipped as a complete computer (since manufacturing then didn't have to count out all the individual parts). We then mounted the fully assembled kit of spare parts into the rack and hooked up the "spare" terminal to it and used it as an additional computer, when it came time to give it a name, it was obviously "spare". 🙂
Along those lines, I worked in a lab where we needed a non-standard electric socket installed for a specific piece of equipment. We were supposed to have the university's electric shop do the work, but they were giving us a 6 - 9 month wait to do the job, so we ordered the socket from a local electronics supply company "with installation".
Legend has it that DEC decided to call their products "Programmable Data Processors" rather than computers for similar reasons.
My guess was going to be that they excluded one key part, which it was expected that the buyer would find or make themselves - the steering wheel, say. "It can't be a car, it's got no way to steer it!" seems like the sort of argument a tax dodge would use. Then anyone handy enough to make a kit car would just use the attachment point and add a wheel to it.
But this works too.
Kit cars don’t have engines anyway, they provide you with a list of recommended engines but you have to source it yourself
@@gtv_archangel Always? I would have thought for a Lotus it would be included. Transmission as well. Those are hands down the two most complicated parts of a car. But if Lotus was using engines and transmissions from 3rd party suppliers, then yeah, I could see that being a separate purchase.
But the fact that this was a tax dodge hints (to me) that this kit included everything. If the kit did not include an engine or transmission, I would think it wouldn't face import taxes.
The Lotus 7 (and later Caterham 7) had/have the engines included, but many kit cars (like the Superformance and Factory Five replica Shelby Cobras) require you to source your own engine and transmission.
It seems that the real issue is that kit cars were already tax-free _unless_ they came in with instructions:
"Under the Purchase Tax system of the time cars supplied as a kit did not attract the tax surcharge that would apply if sold in assembled form. Tax rules specified assembly instructions could not be included."
(Wikipedia article on Lotus Seven)
So you could legally get a car without paying the tax if you went through the trouble of buying its parts and assembling it by yourself without a set of instructions provided by the manufacturer, just your wits, your mechanical knowledge and this convenient _disassembly_ manual that just so happened to arrive in the mail.
@@taimunozhan could they get round it by selling the instructions separately? Or maybe from a "different" company (sorry no instructions, you'll either have to figure it out yourself, or our friends at Lotus Publishing have a book you can buy...)
The Lotus Seven was an important car, and there's a very good reason why you would not mind having it as a kit car: it's easy to make it into a racecar, the type that you would often disassemble and modify. And if you are going to work on it basically every time it's back in the garage, you might as well built it yourself (it's quite rudimentary), and save the extra cash.
Today the Seven is still produced, not by Lotus though, but it remains one of the best driver's car available, and one of the most important cars of all time. 😊
Lotus founder Colin Chapman's maxim was 'simplify & add lightness', so 'take it to bits' fits in rather well : )
Pity nobody brought up that it's the car from the intro to the TV programme "The Prisoner" because that would have sparked a whole new area of theories :D
Came here to say that. I've wanted a Lotus 7 ever since I first saw that series at age 10 or so.
Wait, what, really? That's awesome! I'm suddenly much more interested in that car.
I got it around the same time as Tom, remembering workmates saying that the Haynes Manuals were notorious for saying "assembly is the reverse of disassembly".
1:40 - Yup, I remember when that was a thing (it might still be a thing?), there was a website - and this was early days for websites - where you could click a button to send some bit of cryptography to an email address in Cuba and thus be legally considered an international arms dealer. I'm not ashamed, I definitely clicked that button.
Scrabble had a similar issue. The American company had the tiles made outside the US, and the US government declared that the sets of ties, sans board, still counted as a complete game. The workaround was to send the consonants and vowels separately.
Tom, it would be lovely if you and the team could cite some relevant references and continued reading in the description!
Initial thoughts: the instructions were "how to not build the car from these parts" or "how to disassemble the car" and just follow it in in reverse. Very similar to the grape juice brick to make wine.
Love that One Piece at a Time showed up in the conversation. To type up the title it took the whole staff :D
I thought they might have said "we don't ship to private customers, but if you want to be an independent contractor and buy a few, finish construction, and sell it on, you can do so", making it a business to business purchase where tax can be manipulated more easily
Bought for the lotus drivers club, some of which are registered companies. Then claim the VAT back
My initial thought was that there were a few parts that needed some simple machining to be 100% finished and then usable in the car. Because: then you did some of the manufacturing. I think some rifles are sold that way here in the US, as "kits" that you do a little finishing on. Avoids some of the gun regulations.
But disassembly instructions is also clever!
I watched a lot of Top Gear in the past (Clarkson, Hammond, and May), and I remember them showing some Lotus cars, but I don't think they ever mentioned the kit aspect to some models (as mentioned here), let alone a way to get around import taxes.
The 80% lower receiver for an AR15 pattern rifle. 80% of the machining work is completed by the manufacturer. Some have jigs and templates the unfinished receiver can be mounted in to do the finishing work with drill bits and other tools provided with the finishing kit. When a person completes one of these they're supposed to give it a unique serial number and in States that require firearms registration, register it.
For people with more money and less skill, there's the Ghost Gunner CNC milling machine designed specifically to hold 80% lowers and accurately complete the milling. After carving out your lower, the machine can be adapted into a general purpose CNC milling machine but it's pretty small. The Ghost Gunner was recently updated to where it can mill AR15 lower and upper receivers and metal frames to hold Glock19 pistol components - starting from plain blocks of aluminum.
There was a TG challenge where they had to assemble the car, get it onto the track and cross the *start* line to win.
@@kantpredict Sounds like a great challenge. I never saw that. I have a friend that grew up in the UK and he used to live a few miles away and he would DVR episodes from BBC America and we would watch them when I visited him. For awhile I also knew of a website years ago that was great for streaming episodes. But I know there are plenty I never got to see.
I do vaguely remember one where they assembled what vaguely resembled a car, they started with a frame that was pipes, might have been Lotus, might have been TVR. Just put a bunch of batteries on it and drove it like 30 miles? The body was sheet metal they crudely fitted to the frame.
@@greggv8 This seems about as dangerous as 3d printed guns
@@comicus01They discussed a bunch of kit cars on the show - one notable one was a Stratos kit car.
There is an entire category of cars, called exocars, that are all kit cars in some way. You have a donor engine, some parts of an existing car, a roll cage and some other bits - using which you get a full car with the highest possible power/weight ratio. A UK-based one I remember is the Exobusa, which has a Hayabusa engine and weighs around 400kg, giving turbocharged versions close to 1hp/kg.
The car used in the 1960s serial _The Prisoner_ was a Lotus Seven, the fiction being that the character had built it himself.
I simpler and possibly more entertaining question would have been, "The kit car was only provided with disassembly instructions. Why?"
But “tax evasion” is a much less entertaining answer.
@@vitorluiz7538 it's not tax evasion if you legally don't have to pay taxes. it's just a tax loophole.
So called loopholes are mostly intentional, while evasion like this required fraudulent behaviour which any proper tax law should be able to strike down.
I think it would've ended too quickly tbh
The top comment should not contain the answer to the question, it's always visible when first opening the video on mobile
For those of us old enough to remember newspapers and if you're a sports fan, then you always read a newspaper from the last page first (where the sports news was). So reading these Lotus instructions starting from the back page would be natural for us old sports fans.
My guess at the ruse was you were paying several thousand quid for the book, which is tax free, and the car parts were free.
I would absolutely love a Lotus Super Seven, assembled or in kit form :)
My father has one in british racing green. Runs like a champ, built by him in his workshop.
First thought that came to mind was shipping the exact same parts but writing a guide that would construct a different product that isn't taxed
When the question started, I was wondering if this was a repeat upload or something because I was sure I already knew that one from here. It took me a bit to remember - I had actually read it in the comments for the "juice brick" question, not from the show itself.
First, Lotus then wasn't what is Lotus now. Lotus was sort of a race car, not at all built for leisure or comfort. Second, the whole reason it was offered as a kit was to reduce the cost of buying it. Third, you not wanting to work to build it or trust anything you might have built de-selected you from having this race car.
How would they instruct you to tighten bolts to the correct torque, or inflate tyres to the correct PSI?
Probably the tires had a pressure guide on them, and maybe the same for the bolts? Otherwise, maybe there's just a general rule of "tighten it normally", or the guide says things like "Reduce it from 9001 torques to zero and remove the bolt".
This was the 60s I don't think they were worrying about torque specs back then 😂
Just include the pre-disassembly state in the instructions too.
I.e. Deflate the tires from X psi to 0.
-Make sure to deflate the tyres which you have inflated to .... PSI.
That'd be cheeky way of doing it.
Simple, in the disassembly instructions, just list the minimum loosening torque, and how much pressure to let out of the tire in order to remove it from the rims😅
Re the crypto reference: Back when DES (the full 52-bit version) was still considered a WMD, so illegal to export, I was able to order the relevant FIPS publication which described the algorithm in excruciating detail, including the wiring of all the S-boxes as well as the initial permutation which had been added by the NSA. They obviously took it for granted that only native US programmers would be able to turn the book explanation into a sw program.
EDIT: That NSA addition was never explained so many thought it was there to give a backdoor for NSA only, but in reality it was a step needed to make DES resistant to Differential Cryptanalysis, an idea which was re-invented decades later.
(I played a small part in the DES replacement program, the AES competition, about 25 years ago, helping to make CERN's candidate about 3x faster so that it became competitive with Rijndael, the eventual winner.)
This reminds me of how to avoid making wine from bricks of grape juice (way back in episode 21)....
Guess at 7:00
Were they disassembly instructions?
Most kit cars are not complete cars built from the ground up, they're really just body panels and other parts that are retrofitted to an existing "donor" car. Here in the USA many of the original kits were made to fit the Pontiac Fiero and the VW Beetle. These days companies are making them to fit more ubiquitous donor cars like Honda Civic, Chevy Cobalt, etc.
I don't understand why this show isn't fully available in video?
Funny you joke about Lotuses being glued together, they actually are! Lotus developed an innovative form of heat activated adhesive to bond the panels together on the Elise. So they are glued together, but it's glue that needs to be baked first.
I remember tale of Ford importing their TransitConnect vans as passenger vehicles (they were/are assembled in Hungary) and converting them to cargo vans because of taxes. They took the extra seats out and filled in the windows. Even crazier, they could not just send the now-surplussed parts back to be used in the next batch, the seats and windows had to be destroyed. It was cheaper for Ford to do all of this, than to just import the vans _as_ cargo vans! 🤪
I love the idea of a full kit-car partwork, like it's a chonky version of Quest magazine or the Star Trek Fact Files (only 90s kids will etc etc...)
There's a company doing a subscription build it yourself Millennium Falcon kit. Every month you get a small book and more parts to assemble.
Btw, the Lotus Elise was (pretty much) glued together
When the UK was part of the EU, an uncle of ours bought a BMW in Germany for export to the UK, meaning he would pay VAT in the destination country. He parked it at friends house for a year, then when he shipped it claimed that being a year old it was "second hand" and avoided the tax.
I was thinking in the vein of sending the instructions to 3D-print the components and how to assemble them. But this is way pettier and funnier.
My initial thoughts were that they had local parts manufacturers for popular countries or they sent the instructions separately (perhaps by fax given the era).
3/4 of the way through, Im thinking of prohibition era 'Home definatly not wine kits', written on the tin how to make a big ol few gallon jug of 'fruit juice cordial' from the syrup in the tin. I cant remember if it was 'exposing to yeast' or 'adding extra sugar', something like that, would exceed state laws or something. So be extra double sure *NOT* to add *this thing* and leave under the bed for a week, like the good little boys and girls you are.
Im going with it was shipped with all the parts and a Workshop Dis-assembly manual for how to precicely pull it apart. but if you read it like a manga, back to front, it was exactly how to unpack the crates and build the thing? I like that, thats my bet.
Funnily enough, the chassis on the Lotus Elise is in fact glued together
These days Lotuses are pretty much just held together with glue, but they get quite offended if you call their fancy bonding process "glue" so make sure there are no Lotus engineers around when you say that!
Ah yes, the old write the construction manual as a disassembly manual. I was really damn sure that was the correct answer when I read the question, but I was absolutely sure of it @7:00 timestamp.
I knew this one immediately (from a random book that I read years ago), so I was silently shouting the answer at my screen for 6 minutes.
I'm a car guy and knew this right away, so fun to be on both sided of this game.
SOld the motor separately or not at all? I know a lot of kit cars re-purposed old VW Beetle engines or other common engines.
The code that was printed because it could not be exported was PGP - pretty good privacy .... Its an encryption program
When expanding on the novel idea you end up with: "Zen and the art of motorcycle maintenance"
i assumed you were really just buying the book, which conveniently came with a whole bunch of car parts for free.
My thought was that it came without an engine, because without an engine it's not a car, and then it gives you a list of engines that would fit.
oh, like bars-with-food-i-mean-restaurants-with-booze
"Thanks for buying a single french fry; here's a complimentary glass of bourbon!"
Was my thought as well. I know the shipping rate on books is different, not sure on tax.
Hah! Like the kid who made delicious panini sandwiches at his university, and other students paid him to make a sandwich. The university put a stop to it saying he doesn't have a vendor license nor food handling permit. So, students started purchasing a paper napkin for $3 that happened to come with a free sandwich if you choose.
My guess was "Sold it as a life-size 1:1 scale model kit"
There was another tax wheeze which I'm pretty sure was Lotus, where the guys building the cars at the factory could take a day off, come to your house and you'd pay them cash to build the car for you.
In the 1980s, Subaru dodged an incredibly high import tax on trucks into the USA by simply bolting seats into the bed of their BRAT mini pickup, and calling it a family vehicle.
The seats were welded in. If they were bolted in the Brat would still have been classified as a light truck and subject to the 25% import tax. That same tax is why the Outback was only available in the USA as a four door. 2 doors with a bed = light truck. Add two more doors and more seats, it's a passenger vehicle with a large and lidless trunk.
@@greggv8 i think you mean the Baja, not the Outback. The Outback is a wagon.
And the seats were bolted in, all seats are bolted in. The support crossbar was welded in, but seats have to be replaceable and repairable. They don't weld seats into the Ford Transit Connect, they bolt them in. Every Transit Connect comes to the US as a passenger model with a full compliment of seats, then the ones ordered as cargo vans get converted when they get here, and that counts to evade the tax.
@@musewolfman The frames for the bed seats in the Brat were welded in. Do a google for subaru brat seats welded in and you'll find a ton of references to that, along with people asking or telling how they changed them to bolt in so they could take them out and have full use of the bed, while still being able to put them back in. Those Brat seats have been transplanted to other vehicles like Rangers and Subaru Bajas.
@@greggv8 that's what I'm saying. The frame, the support bar, whatever you wanna call it, yes. The actual seats that hug your ass are still able to be unbolted from that.
Wait...how does including disassembly instructions get around the tax for a car, though?
I didn't think he was joking about the glue at all because Lotus does actually use an aluminum chassis stuck together with epoxy in the Elise today. Not sure if you could expect a hobbyist to be able to work with heat-bonding epoxy, though.
I still don't really understand how that avoids tax just because the instructions are in reverse?
Because the UK laws and regulations specifically stipulated that a kit car was comprised of some or all of the parts and an *assembly* manual or instructions on how to put the car together. Due to the precise wording not saying anything about including *disassembly* instructions nor specifying what state the parts would be in, ie assembled or not, Lotus got away with shipping out car kits that by the laws of their country were legally not kit cars.
The legal assumption would be that buyers would somehow figure out how to put the parts together correctly, and when they were done with that they'd have the book describing how to take it apart.
I knew this one. It was for UK sale though, to avoid car tax.
How did they show what torque bolts needed to be?
I love the idea of an awful romance novel that contains instructions to build a Lotus Super 7! bodice ripping and car-building instructions; what a great combination! just think of the innuendos with the word "screw" alone! not to mention "shaft."
My guess was "the instructions weren't included, but it's a PDF on our website, you just download and print it. And buy the box of parts."
The immidiate thought was they exclluded some crucial part that made it "techincally not a car". Would be hillarious is somthign silly like "the ignition key" was missing, but probably somethign small and generic the customer could easly get themselves later, maybe "a steering wheel"?
Blue Peter car: "And here's the one I unmade earlier!"
remembered this, good question
Could you purchase the assembly instructions separately?
My guess was they Sold a very expensive instruction booklet, but if you call now you get a free gift of a very specific set of metal parts
Oy! This thing is literally discussed in the comments at the Juice episode
Lotus: You can have the car for 20% less if you unlock “expert reverse mode”
I wish there was more explanation, how is the tax code written so that loop hole exists?
My guess was that you bought the book and the parts came free with it. But I don't get why the actual explanation worked. Why was that a tax loophole?
I think Tom should take comfort in knowing that you can't register a self-built car in the UK without it being inspected by the DVLA or similar. It is like an MoT that takes several times as long.
But how is the disassembly instruction to do with tax?…
I believe the "printed copy of PGP's source code is free speech" thing was actually ruled in court that way. Also... why did making it disassembly instructions get rid of the tax? I don't get it.
Because of the wording of the law. You were allowed to sell individual car parts at a lower tax rate, but if you included assembly instructions it was considered to be a kit car and therefore a higher tax had to be paid.
Lotus argued that they were selling spare parts packages for existing cars, and the disassembly instruction was added so that the car owners could correctly remove any broken part when repairing their car. Therefore the booklet served a different purpose to an assembly instruction. Given the wording of the law, this did not match the definition of a kit car.
@@hannesgroesslingerAhh, thank you!
Yeah, that was a cruicial peice of information that I don't think was mentioned. I was thinking the same, you still have all the parts of the car. Surely they could have just sold the instructions separately?
I was sort of hoping for a reply to the last comment, saying something like "That is why owners of Lotus kit cars are a bit different from owners of regular prebuilt cars."
1:00 Imagine getting into al airplane built by a random person.
Tom!!!!
I know you don’t really do this, but PLEASE PLEASE PLEASE listen to ‘One piece at a time’ by Cash, and record your reaction.
If you have reasons why you don’t want to, I get it, but I’d love to see your gut reaction to that song.
7:05 No! Did they just put the instructions on how to DISASSEMBLE the car into the manuscript, and customers needed to read it like Manga (i.e. "backwards" 😁) ?
EDIT: No way? Tom got it a few seconds later 🤣
I don't understand why the tax authorities and courts wouldn't just consider the "disassembly manual" be merely a disguised assembly manual, and tax the car like any other car that comes with an assembly manual.
Depending on how the law is worded there's not much a judge can do unfortunately
Another approach might be along the lines of "Be careful not to bolt this part onto there like this, or you might end up with a car..."
“Remove the 13 mm bolt, which was tightened to 120 Nm at assembly.”
(USanians: Insert your own units like, I don’t know, 17/32 furlongs per fortnight or half a dozen horsepower-quartermiles, at your own discretion.)
My ideas:
1.The parts in instruction manual are sold separately.
2. The book contains no words and is entirely illustrated And therefore does not qualify as an instruction manual.
3. It is sold as many separate kits, none of which contain parts that interlock and therefore do not qualify as a kid. The book is sold separately as well in separate issues as a hobbyist magazine.
If you print a dissasembly manual in a manga, is it still backwards or just double backwards when compared to a usual book?
A manga would have the steps in reverse (correct) order, but each individual step need to be reversed.
So instead of "turn counterclockwise and pull out to unlock and remove part" the person would actually want to push in and turn clockwork to lock into place.
Every step needs to be reversed like that for it to be assembled correctly.
For quite a while there, my theory was that it was not a real car, but a proper kids toy modeled after the real thing.. Think LEGO toy scale. (Fine, adults can play too!) Between all the gearing stuff and basic electrical shenanigans, it could completely propel itself. xD
LOTUS = Lots Of Trouble Usually Serious
Never underestimate the amount of work people are willing to do to avoid taxes.
But here it’s obviously the feeling of accomplishment that is the important part.
But, I buy a newly built apartment every decade in order to avoid doing certain maintenance. I also enjoy manual labor but with some supervision.
Isn't the maintenance cheaper than a new flat?
My guess is the instruction manual was written as a "how to pull apart" that you were meant to follow backwards
You can also live in Delaware
And there I was wondering whether they tried to reclassify the car parts as pieces of art for whatever reason- as a maker of sports cars, it seems plausible they might think of their products that way
One tiny issue: you don't get torque values for disassembling.
Horrendous flashbacks of service manuals (hello Haynes) which simply say: "Refitting is the reverse of removal" 😱
People will do the craziest sh*t to avoid taxes. Blows my mind (in a bad sense)
That sounds nifty.
I wonder how long that loophole stayed open.
I thought the solution was going to be that they made the parts $1, and the booklet of instructions $20.000
Soooo... How or why did this trick circumvent taxes?
It'd should be called "A car built with a reverse gear"
2:39 Take this with no context
I very much would want this car.
The Lotus 7 exited the factory a jumble of parts and body panels, with assembly left up to the buyer. This was done primarily for tax reasons, as there was a heavy tax levied on assembled cars imported to the U.S. Even if Lotus shipped the parts with an assembly book, the tax would remain. To get around this, each Lotus came with "disassembly" instructions, which could be followed in reverse to build the car.
This makes so much more sense than an "export tax" which they implied in the podvideocast.
I hope the "dis" part is in like big red letters so it reads like "DISassembly Instructions".
In america we just buy the car in Montana to get a tax free car.😂
There is no way this fooled anyone, the tax office just let it through out of shear admiration for the audacity.