Late tax return filers 'must be brought to book'

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One in six self assessment tax returns are now filed electronically and HM Revenue and Customs has stemmed a fall in the percentage of people filing their returns by the January deadline, the National Audit Office has reported.

The NAO report released today (22 June), HM Revenue and Customs: Filing of Income Tax Self Assessment Returns, said just over 90% of almost 10m taxpayers required to complete returns now file them on time.

An estimated 1.1bn of income tax was outstanding from 1.1m overdue tax returns at July 2004. "The Department prioritises pursuit of taxpayers whom it considers highest risk. Over 260,000 taxpayers had more than one return outstanding and over 12,000 taxpayers had six or more years' returns outstanding," the NAO said.

Penalties

The report raised the prospect of...

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By stratty
27th Jun 2005 10:42

dear jeff
I never said the system was perfect; merely that there is little wrong with it.

Accuracy is something the Inland Revenue can work on but it is taxpayers who submit forms late that cause the most problems.

Perhaps a greater financial penalty is required. I would like to see a £100 mandatory penalty for late filers. That way if a return is late and a repayment arises people are still hit in there pocket. At the end of the day it is them who has not conformed with requirements.

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By vowlesj
24th Jun 2005 18:46

never mind the politics, this is real life!
I agree with some of the comments that we need to look at simplyfying the system, etc. But at the end of the day it doesn't matter what deadline you give ... a fair proportion of people will simply fail to meet it!

Ignorance, procrastination, fear of forms, overwork - its human nature! - they all contribute to the delay in filing.

Instead of promising reform of the deadlines and penalties, perhaps the powers that be could give us some indication of how good the UK tax returning (and Companies House returning) population is as compared with America (where self-employed gets 6 months to file and the employed 3 months!) or France, Germany or Australia.

Also, how has the £100 late filing penalty increased the speed of forms so far? Will an increased penalty do that much? And I am worried by the inference that late filing = a penalty even if no tax is due - that would be an injustice!

Having 1.1bn outstanding is a lot of money, but at 1% of the total take the Treasury is doing a lot better than the average business who has 60 days sales (or 16%) outstanding at any one time!

Personally I would only be happy with a change in the deadline if it was staggered in some way so that the workload was spread over the year rather than bunching into the period from the end of the summer holiday season to January as it is now.

Jonathan

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By stratty
24th Jun 2005 11:18

Deadlines
In my opinion there is nothing wrong with the current system.

People are aware of there obligation to file and need to wise up and get returns in on time.

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24th Jun 2005 11:57

Self Assessment
Firstly the system of Self Assessment was introduced by trying to make it fit the existing system instead of reforming the tax legislation to fit Self Assessment.

Secondly our secondary education system does little if anything to prepare future taxpayers by educating them about thier obligations.

We have a system which gives you ten months to prepare the return but the Revenue twelve months to look at it. Which takes longer preparation of looking? Also the first there months of the period are lost waiting for information from third parties eg P11D, interest certificates etc meaning we are then into the three month holiday period giving four months for completion, but usually left to just after Christmas.

Perhaps we need a top to bottom reveiw of the whole system eg abolition of the schedular basis of looking at income ie add up all income setting off all losses, irrespective of source, and a far simpler basis of calculation which would need the abolishing of National Insurance or it transfer into a consolidated rate. Plus a more sensible date for the tax year ie the end of a clander month.

It is the complexity of the system that is the root cause of the problem combined with the fear factor of government forms.

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28th Jun 2005 10:31

Revenue Accuracy
I send in around 25-30 SA Returns a year and the Revenue lose at least 2 each and every year. We hand deliver them because we are only a short walk from the Revenue Office so when I argue that they HAVE had the Return I can state that with certainty as there is no third party. If the Return has anything difficult to work (ie Section 381 Relief) it tends to 'disappear' despite the fact that we always write "Priority Repayment" on the accompanying letter which should put it at the head of the queue. A Revenue Executive told me that he didn't know how to do Section 381 Relief - when I worked for the Revenue this was an RE's job. Perhaps this is all lack of training?

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22nd Jun 2005 21:47

Dates
Instaed of constantly penalising people why not change the dates.I see no reason why the two dates for payment and filing should not be 31st March and 31st October.
31st January falls when people pay their Xmas bills and 31st July right in the middle of hols.
Westminster council have suddenly realised that maybe helping instaed of penalising might actually help parking. Perhaps HMRC should try it.
We now have a more efficient penalising system than a tax system.

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