Final piece...?

We've seen the ministerial statement to be issued today from Dawn Primarolo, which accepts, on the government's behalf, the new recommendation by Carter that the deadline for paper returns should be 31 October from 2008, but that there should be no change to the deadline for online returns. The key bit reads:

'Having reviewed his earlier findings, [Lord Carter] has now recommended that, for 2007-08 and subsequent returns, the filing period for paper returns should be reduced to seven months - the new deadline should be 31 October - and the filing period for online returns should remain at ten months - with a deadline of 31 January. He has also suggested that HM Revenue and Customs officials should work with practitioners to explore how in future the practical difficulties in collecting data earlier might be overcome so that taxpayers can complete their returns sooner if they wish. The Government has accepted Lord Carter's revised recommendation. This updating of the Self Assessment system takes account of both the views of tax professionals and the operational requirements of HM Revenue and Customs.'

Yes, yes, so this was a model of how consultation should take place...? I think not. And it would have been helpful if they had also confirmed that the enquiry window would be changing to twelve months from submission, though presumably the point is that this hasn't changed from 'Carter Mark I'.

More interestingly, what is that comment about working together in the future so taxpayers can complete returns earlier 'if they wish'? That could be very helpful; one of the issues identified in the responses was that most returns could not be started until July at the latest. There was a question raised at the Wyman symposium as to whether the PAYE end of year procedures were now appropriate to a largely online system.

However, it was also clear that Lord Carter was not actually convinced that the deadline could not be shortened, he simply accepted that it was going to overshadow the whole e-agenda if it was forced through. Joint work to get clients to submit their information earlier will be good for both HMRC and advisers, but it is to be hoped that we don't have to fight this battle all over again in five years time. Looking at the statement positively, though, the phrase 'if they wish' is very helpful, and represents - in our view - the way forwards.

Intervention idiocy

No sooner does one door open than another slams shut on your foot...

With Lord Carter having said that he has changed his mind, it seems likely that the official announcement from the government will come soon, though why they are prolonging the agony is anyone's guess. However, in the meantime another innovation guaranteed to get agents' blood pressure up has started.

We highlighted the new 'interventions' in this week's magazine, and asked for details of what was happening on the ground. We've already had two replies. The first was a version of an 'enabling letter' which was as bad as usual, but it had nothing on the 'real time records review'. Agent receives phone call 'as a courtesy' to say that their client was about to be called with an 'invitation' for an HMRC officer to go and check that her record-keeping was up to scratch- for direct tax, not VAT. No pressure, entirely up to the client, etc.

An immediate call to the client revealed that HMRC had already called, that the client had felt under some pressure to agree, but that as a small hotelier had been able to put them off - they will ring back in September. The agent has given firm instructions that HMRC should be told to contact the agents when they do.

HMRC have been given no extra powers to do this, and there has been very little consultation about the way they are going to do it. Until there is, our suggestion would be 'just say no'.

It's No to November!

Back from this evening's Wyman Symposium at the ICAEW, where Lord Carter announced that he has written to the Paymaster General saying that he has changed his mind about the tax return deadlines. He has now proposed that the deadline for online filing should remain at 31 January, but that the deadline for paper should be 31 October from 2008 onwards. Although we need to hear it from the government, it seems that it is all over bar the shouting and the fine tuning.

The abolition of substitute returns remains, which I know is an issue for some people, but Lord Carter made some fair points about the need to move to a modern method of delivery when there is so much to be gained from it. The proposal to change the enquiry window so that it runs from the date of submission rather than the latest filing date also remains.

More will follow, but the essential news is that, provided you are ready for online filing by 2008, you will not have to complete all your tax returns two months early.

We're pleased to have played our part, and the 5,500 of you who wrote in certainly played yours. But the unsung heroes of this are those from the tax representative bodies who have spent months negotiating this deal and have finally succeeded. They have done a great job, and deserve our thanks.

High days and holy days

As we wait for Lord Carter to give his revised opinion, a correspondent has pointed out to me the problems that a 30 September deadline would cause for Jewish tax practitioners. Judaism works on a lunar calendar, but with an extra month added in some years to bring the calendar back into line. The new year, the month of Tishri in the Jewish calendar, typically starts in what is September on the western calendar, and for the first three weeks of Tishri there are a number of festivals from the two day festival of Rosh Hashanah through to the week of Sukkot. In 2008 this will not be so much of a problem, because Rosh Hashanah will start at nightfall on September 29th, so only one day of the proposed tax return final month would be lost. However, in 2009 it starts with sunset on September 18th, and Yom Kippur starts at sunset on 27th.

For Muslims it would be even worse. Also working on a lunar calendar but without the 'leap' months, the Islamic year is 11 or 12 days shorter than the solar year. The month of fasting, Ramadan, therefore migrates through the seasons. In 2008 it should fall almost entirely within September.

It's fairly hard to avoid all major religious festivals, but to time a change so as to cause that much of a problem for two of the major religions of this country, and of our profession, seems a tad insensitive...

Widdecombe & Galloway...

Not the name of a new two partner firm of tax advisers, but just two of the signatories to Early Day Motion 2262. If what we are saying commands the respect (sic) of both arch-Conservative Ann Widdecombe and old-style Broad Left (those were the days...) George Galloway, it must be right. I mean, correct...

There are 70 signatories now, a very respectable score for a motion that is criticising current government policy. If you haven't contacted your MP yet, please do - even though Carter is in the process of reviewing the evidence it is possible that he will finish before the House rises for the summer recess, so it would be good to have as many signatures as possible on it.

There's more in this week's magazine; particularly explaining that this review by Lord Carter should not be underestimated, it's not an off-the-cuff remark that he's made just to make us feel better about it. It's not by any means a done deal yet, but it is clear that some movement is on the cards.

Meanwhile I'm off this afternoon to see England v Trinidad & Tobago on the big screen at a Baker Tilly party in Crawley. It's a hard life being Taxation editor...

Beginning of the end

Lord Carter has said that he will 'look again' at the change to the tax return deadlines. Speaking at an ICAEW conference on efiling today, he said:

'Clearly in the area of accelerated self-assessment filing there has been some controversy. People have made the case to me informally that this should be looked at again. Given what people have said, if a case can be made for reconsidering that, I will look at it again, and I look forward to seeing that evidence.'

It's not over yet, but the first aim of the campaign has now been achieved - it has been accepted that the issue of the filing date was not the subject of sufficient consultation during the review and that it needs to be properly considered. With all the evidence that has been amassed since, surely the deadline will be kept at 31 January for online filing.

Whilst all of you who were supporting the campaign will no doubt be very pleased, Lord Carter couldn't resist a little dig. He said that when his review had been published he had received letters saying 'thank you for giving me my Christmas back.' Presumably they were not representative of the profession as a whole, he said today. Presumably not...

Sign language

Thanks to all who have written to their MPs over the recess; the number of MPs who have signed EDM 2262 has shot up to 36. If you haven't got round to writing yet, please do, and encourage all your colleagues to write as well.

You can reassure MPs that it is an all-party motion, with support from Labour back-benchers as well as those from the Opposition parties. The number of MPs who have already signed should help persuade others that they should sign too.

I'm writing this while taking a break from writing an article for next week's magazine on tax credits. As far as I can see, the new £25,000 disregard means that for many self-employed claimants, spending money on a one-off expense this year will at worst cost them very little in disposable income, and at best will actually make them money... With £1.8 billion overpaid last year, there are surely better things for the government to do than make a change to tax return deadlines which no-one has asked for?