If you think that this a month late then consider the position that we, and all other accountants, have been in over Christmas and New Year, and up to 31st January. (And yes. We will get to Making Tax Digital (“MTD”) later).
Just before Christmas we had 200 clients with tax returns outstanding. By the end of January we had reduced that to a hard core of 10 returns. There is only one way that this can be done, and that is by our staff working 10 hours per day, 6 days per week (yes, most of them did have one day a week off!).
All of those clients had been asked at least once for the information necessary to complete their returns. They had all chosen not to make that information available until the last minute. The one comment made regularly is that the “due date” for tax returns is 31st January. This is incorrect. The “deadline” is 31st January. The due date is anytime between 6th April and 31st January.
The advantages of making information available to your accountants as soon as possible are obvious:
- Knowing how much tax, if any, is payable as soon as possible
- If you owe tax and are employed, having any underpaid tax collected through your code rather than having to write out a cheque
- If you have overpaid tax, having that refunded as soon as possible
- It allows the time to ensure that entries on the return are accurate, there are occasions when information needs to be clarified especially when preparing the relevant accounts
- Ensuring that your return is submitted on time even if you, or your accountant, or your accountant’s staff, or any of their relatives are struck down by flu or another illness or a family crisis
So what are the disadvantages? We don’t know of any, but perhaps you do?
So how does this tie in with MTD? Well, many if not most of those 200 clients will be caught by the MTD proposals and be required to make quarterly returns to HMRC. They may avoid penalties for 12 months, but after that they will need to make their information much earlier to avoid them.
My question is – Why not practice next year and get your information in earlier. Perhaps our staff can then enjoy Xmas as well!
For more information about our company tax services go here