Memberblog: SA Returns and Urban Myths

Like you, I always submit returns the minute they are approved.

The argument about whether to submit the returns at the last minute does not enter the equation for me. As it was, I was internet filing clients' returns up to 9pm on 31 Jan. If I had left a deliberate stockpile to send in at the last minute, I would now have a lot of angry clients with £100 fines pending!

Those who have time to deliberate over the timing of submission clearly do not have enough work to do!

I agree with all you say. My conversations with various people involved on the HMRC side confirm that the returns for Enquiry are risk assessed by computer so the timing of submission doesn't matter. No one on the HMRC side has time to review a return more than once.

Those that stockpile returns are, I assume, hoping that HMRC cannot review all the returns submitted in January within the next 12 months so their returns may not get reviewed.

I state in my engagement letters that clients can request that I submit their return as late as possible. The only person who has asked me to do that so far had cash flow issues and didn't want HMRC to start chasing for the (large amount) of tax owed earlier than necessary.

I would be very surprised if any accountant is deliberately sitting on tax returns and filing them as late as possible, as a matter of course.

As far as I am concerned, as soon as the job is done and the client has signed the return, I want it off my To Do list. My firm's best client is ME and looking after ME always comes first. It doesn't do ME any good to sit on these things, after all, I could break all my fingers in the week leading up to filing deadline and then where would ME be? Lots of returns and no fingers!!

I cannot see why filing late returns is beneficial to anyone. If the return is dodgy, it will be as dodgy on 31 January as it would have been 6 months earlier.

No, the problem lies with clients. From the middle of May I was cajoling (some of) them on a monthly basis to bring in their returns; even up to the penultimate day they were bringing them in. One perpetually late ignoramus was told I wasn't doing it unless he paid a premium as it was 28 January and his cavalier attitude meant very late nights for me. Fortunately, he opted to go elsewhere rather than pay for his tardiness and so, for the first time in several years, I wasn't working through the night every night for the last week in January. Woo hoo!! I was actually all done on 30 January, although I still have the provisional returns to repair.

Goodness knows how clients will cope when the deadline is brought forward a couple of months.

I really think I will have to revise my engagement letter to incorporate my own penalty if paperwork is not with me by say the end of July. Clearly, taxpayers respond to the threat of Inland Revenue penalties but give no thought to the poor sod who has to cope with their dilatory ways and save them from Hector.

Having said all that, most of my clients are very well-behaved and keen to keep their tax affairs uptodate.

I was puzzled about your client that asked you to delay filing due to cash flow because he didn't want to pay sooner than necessary.

Since the date for payment of SA tax is 31 January, whether a return is filed on 30 June or 31 January, how would he have been forced top pay sooner?

The cashflow advantage? Clients who decide that they've had a really bad year, so postpone/reduce PoAs. When the figures are actually done they prove that the liability is the same or more. So to submit the Return releases the PoAs which would otherwise not wake up until the Return went in.

Of course this means that January comes and they owe a year and a half's worth of tax, which they can't afford so they 'decide' that it was a terrible year again and the cycle repeats itself. Effectively they are running Revenue interest on a year's worth of tax bills semi-permanently.

And trust me Simon, there are people who stockpile Returns under the thought that there is a reduction in enquiry chances.

I am not sure what the status of your client is that is delaying his payment of tax (Penalties/Interest) due. If he is a company director and unfortunately the company was wound up I can say that one of the things looked at is "trading to the detriment of the crown". All though not an offence per se it is used in adding weight when looking at disqualifying directors.
The question I ask is why are you not advising him on how he can ease his cashflow? I realise that is a great presumption on my behalf and I may be doing you great dis- service as you may well have provided advice and assistance (We can lead a horse - and all that stuff!!). Sorry I come late to the discussion and am trying to catch up with newsletters!!

Well it isn't actually my client but someone else's further down the discussion. I just understand it because we have many clients who seem to end up in this boat.

And advice on improving cashflow doesn't really work with our lot. They aren't really that much in control of the volume of work that they get. The only cashflow advice worth the name is teaching granny to suck eggs. That is, put money aside during the year so as to provide for the tax bills on the money you have just earned. And eat sensibly, take regular exercise etc etc. All those things that people (well our lot) never actually manage.