Does self assessment season really exist?by
What do Father Christmas, the tooth fairy and self assessment season have in common? Amy Chin investigates.
With pumpkins slowly rotting in the garden, back-to-school sniffles rampaging through the population and Mariah Carey well and truly defrosted, no one can deny that the festive season is upon us. But are we also in the throes of self assessment (SA) season or is its existence, like a certain red-coated, white-bearded fellow, up for debate?
Sweet, sweet fantasy
Site member Burlington Bertie had this to say on a recent (unrelated) article of mine: “Amy – please don’t perpetuate this tedious US-derived myth that there is a tax ‘season’ in the UK. Self assessment ‘kicks off’ on 6 April, the day after the old tax year ends and the day the new tax year begins.”
I’ll hold my hands up here and admit that other than filing my own SA (which I smugly ticked off in July this year) I have very little experience in this area from my career in audit, training and writing. That said, it’s worth noting that my freelance accountancy training offers tended to dry up between November and March as employers preferred to have their staff working in the business during those months.
Nevertheless, having accepted the notion of SA season without question, the comment piqued my interest and I decided to do a little digging…
Don’t forget about (the) US
That the US is a slave to a clearly defined tax season is undeniable. The window during which the Internal Revenue Service (IRS) will accept tax returns begins in January on a date declared by the IRS and ends on 15 April, unless this falls on a Saturday, Sunday or holiday, in which case the final day for filing is extended until the next available working day.
Conversely, as noted by Burlington Bertie, UK taxpayers are free to file their SA returns whenever they see fit, starting from the moment the tax year ends on 5 April until 31 January, the deadline for most online SA returns.
Why then do so many taxpayers, often despite the best intentions – and helpful reminders from HMRC to “beat the January rush”– leave it until December and January to tie up their SA affairs?
When AccountingWEB’s community and editorial assistant, Molly Macfarlane, posed the question: “Is burnout a concern for you before the starting pistol is fired for self assessment season?” some members bit straight back with claims that the vast majority of their clients’ filings were already done and dusted. User Self-Employed and Happy asserted that the so-called “season” only exists for those guilty of “a lack of planning and not being hard enough on your clients”.
This is not a new rhetoric from the community, as demonstrated by this thread in the Any Answers forum from December 2022. In answer to my title question, consensus among at least the more vocal (“tap-happy”?) of our readers seems to be a resounding NO!
Can’t let go of the stats
However, a quick delve into the AccountingWEB site traffic statistics paints a somewhat more familiar picture. As well as the expected peaks for the Spring Budget and Autumn Statement, site analytics from 2022 show a notable surge in visits to the site during the months of November, December and January, building to a crescendo at 52k page views on – you guessed it – 31 January. Footfall dropped to 44k the day after the SA deadline and pootled along at 33k–36k page views throughout the summer months.
November, December and January also tend to be the busiest months of the year for our Any Answers forum. There is a significant increase in questions tagged with “self assessment” in this period.
All I want for Christmas are the final figures
It’s not always that people enjoy the thrill of leaving everything to the last minute. I was able to file my own return in the quieter summer months because of its relative simplicity. Those with more complex financial affairs are often unable to file early with the best will in the world as they need to wait for third-party information such as investor tax statements or details of bespoke revenue sources.
It is of course possible to include provisional figures in the return as long as they are so declared, but one can understand why many would prefer to wait until they have the final figures before embarking on the annual filing exercise.
Giles Mooney of PTP Limited shared some industry experience of “busy season” from the perspectives of both a tax lecturing and consultancy provider and a software company.
“No one wants courses or non-self assessment support in January. They’re too busy working on returns,” said Mooney, adding, “No one wants courses in the first half of February. Lots of accountants, especially sole traders and small firms take a holiday in early February to mark the end of that season.”
Perhaps a factor in the desire among advisers to quash the notion of a busy season is the inevitable impact on cashflow. Encouraging clients to file early – that is to say, get the necessary information sent over to them as soon as possible after the end of the tax year – would allow for a smoother trickle of income throughout the year. The rush of clients scrabbling to file in December and January means that billing, as well as workload is subject to the same peaks and troughs.
Acknowledging this, PTP offers leniency to delegates booking onto their courses. “Although we ask people to book their courses for the following year from September, we accept that a lot would prefer to wait until the end of December to pay, when they’ve started billing during SA season,” said Mooney. “With a software hat on, we deliberately sell some software on a pay-as-you-go model acknowledging that advisers have busy and quiet times – pay for it when you use it, not all in April logic. When I look at sales of SA software the main sales points are the first weeks of being able to file (April) and the end of December and throughout January.”
I still believe
Ultimately, though I sympathise with those agents who would prefer to spread the load more evenly over the year, I have not been persuaded that the SA season is a myth. Nor is a busy season necessarily a bad thing. Knowing that December and January will naturally be full throttle allows us to take our foot off the gas in the lulls and enjoy some well-earned downtime, or get on top of CPD (continuing professional development).
Of course, the long-awaited implementation of Making Tax Digital for income tax self assessment (MTD ITSA) has the potential to turn this whole idea on its head with proposed mandatory quarterly reporting. However some might argue there’s more chance of catching a glimpse of Jolly Old Saint Nic in your living room this December than MTD ITSA ever coming to fruition.
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Consulting Tax Editor for AccountingWEB.
I have spent the last 10 years teaching the accountants of the future, mainly ICAEW advanced level corporate reporting. I also cover tax news and write and edit tax updates for other publishers including PTP Limited.