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.