You may have already received the knock on the door. It's an inevitability: January will bring out late taxpayers clutching their tax return, and asking for help.
This could be a simple task if you’ve got the capacity to deal with their request. But if the taxpayer hasn’t got a UTR number, this could pose a problem.
AccountingWEB member Hanleymail has already experienced this common January problem, as they explained on Any Answers. A new client who just earns over the PAYE threshold approached them, wanting to make a full disclose – they haven’t completed a self assessment return in five years.
Confronted with this, Hanleymail said: “Oh the joys of January – and now we try to see if we can get a UTR before the end of the month!”
Of course, the deadline taxpayers should have notified HMRC was 5 October 2016, but as Hanleymail’s situation shows, many did not.
Those tardy taxpayers could face a late notification penalty from HMRC. And at this point, it would be too late for the taxpayer to apply for a UTR number, as you can expect a 25 day wait – crushing any thoughts of filing online before the 31 January deadline.
What you should do
But, as the ICAEW tax faculty’s recent blog explains, late notification penalties issued from HMRC are tax-geared. A penalty is nil if a full unprompted disclosure has been made within 12 months of tax due.
With online submission not being an option, this could be tricky. Instead, you can submit a paper return because a late penalty can’t apply unless the taxpayer has been issued with a SA return.
In addition to the paper return, you should include a letter, with the client’s income and calculations, the client’s national insurance number, and an SA1 or CWF1.
Without online access, you can send your client’s tax payment by cheque through the post to HMRC, Direct, BX5 5BD, with a printed payment slip. The client’s NI number should be quoted on the back of the cheque, and as the ICAEW advises, a follow up phone call to HMRC may be required.
Have you had any late comers, looking for your self assessment assistance? Have you struggled to get a UTR before the end of the month? Have you even got the capacity to take on errant taxpayers?