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'LEO' Will Tell the New Tax Secrets

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Article in the Hammersmith & Shepherd's Bush Gazette on 13th April 1956 on LEO I's work on tax tables following the 1956 budget. (Note that original scans are poor, so images are unclear.)

Date : 13th April 1956

Transcript :

Electronic robot to work out your PAYE

Within minutes of Mr. Macmillan, the Chancellor of the Exchequer, announcing in his budget speech next Tuesday any tax changes affecting PAYE, the big job of preparing the new tables for the next tax year, to tell you and your employers what you what you pay, will begin.

This task will be completed in a few hours by an astonishing electronic robot, “Leo”, the world’s first automatic office, at Hammersmith.

Tax officials will go on Budget Day to the Cadby Hall headquarters of the London caterers who built this super-calculator to handle their own clerical work, and let “Leo” into their confidence the moment Mr. Macmillan finishes speaking.

During the night “Leo” will produce not only the normal weekly tables for all 52 weeks of the year, but also the special tables for taxing monthly salaries.

As the tables are produced, they will be scrutinised by the Inland Revenue officials on the spot. By Wednesday morning all the tables will be ready to be sent to the stationery office for printing. Weeks saved in this way may mean any PAYE changes can be affected by firms that much earlier this year.

The production of these tables by “Leo” will mark the culmination of a collaboration, which began three years ago, between the Inland Revenue and the caterers concerned. The first year no changes were made by the Chancellor affecting PAYE, so “Leo” was not actually called upon.

As “Leo” can be given no particulars of what is in the budget until the Chancellor has spoken, a programme of instructions has to be created in advance to cover any foreseeable contingency. This year - as last - the programme will need to cover the possibility of any of the rates of tax being altered, or any of the ranges of income for which reduced - or increased - rates of tax apply. It will cover, too, the possibility of alterations to personal allowances or to earned income reliefs.

Rather more difficult in 1955, because it had an element of crystal gazing, the programme had to cope with the possible introduction of such of the various recommendations made in the second report of the Royal Commission on Taxation as would affect the tax tables.
All that is required for “Leo” to give effect to the actual budget provisions is for a few, coded characters to be perforated on a paper tape by reference to the particulars handed over by the Inland Revenue officials. Then it is able to go into action. Before 10:00 p.m. on Budget Day, the first sets of tables will have been sent to the printers.

This remarkable robot produces its results in tabulated form. While it is doing the printing it is simultaneously making the calculations for the next set of figures. To guard against possible, though unlikely, misprinting by the printing mechanism, it is arranged that the results produced by “Leo” shall be tabulated at the same time by two independent printing mechanisms. The statement produced by one printer is used by the compositors and the statement from the other is held and used as a proof reader’s copy. 

Although “Leo” will work out the PAYE tables for everyone else in the country, it makes no use of them itself. For when “Leo” produces its employers payroll each week it is able to calculate the PAYE deductions for each employee from the same formulae as it uses for preparing the tables; the computer does this so quickly that there is no point in burdening it with the tables.

Pay out
Each week “Leo” calculates the pay packets for 10,000 of the company’s employees. In doing this “Leo” takes account of the 21 individual factors affecting the workers’ pay - overtime, insurance, commission, PAYY, pension deductions and so on. For each employee it does no fewer than 1,000 separate calculations and prints the pay slip with all details. This work takes about one and a half seconds.

The whole operation, including a running total of the number of £1 notes, 10s notes, coins and insurance stamps needed, takes about 3 1/2 hours. This compares with 1,300 man hours or so using the fastest traditional office machinery.

During the remainder of its working week, “Leo” produces detailed information concerning stock control and sales records for such activities as tea blending and bakeries input. 

Every afternoon it does the fantastic job of branch ordering - working out how many items the firm’s 150 London tea shops will require - anything from Swiss rolls to pork pies. This includes the daily preparation of packing notes, factory orders, and statistics.

Already an improved “Leo II” is on the way and for certain operations it will be four times faster than the existing equipment. A separate company has now been formed to develop the device. Smaller firms will soon be able to benefit from the automatic office. They will be able to hire time on these super-calculators for their own particular purposes.
Caption to top picture:
The operator on the left is standing by a bank of machines which feed basic information into the calculator by means of punch cards. Behind him is the second channel of information to the calculator, this time by means of perforated telegraphic tape. The male operator on the right is standing on one of the printing units which record in normal type on continuous rolled stationery all the results produced by the calculating units situated in the cabinets on the extreme right of the picture.

Caption to bottom picture:
The cabinets housing the calculating units and co-ordinating units of Lyons' electronic office. The control panel at the other end incorporates a separate loudspeaker system tuned in to each individual section of the electronic brain, so that any one section which is being held up for information can broadcast its own specific warning note, telling the operator that the machine is not working to full capacity.

Related Topics:
This exhibit has a reference ID of CH64165. Please quote this reference ID in any communication with the Centre for Computing History.

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