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Who are these speedy tax-return filers?

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While it’s never too early to file a tax return, some clients still fail to realise that it can be too late. The fact that 77,500 people managed to file tax returns on 6 April will start hares running in many accountants’ minds. 

25th May 2023
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Last Friday, HMRC sent out an email informing “customers” that 77,500 of us filed their 2022/2023 tax return on 6 April 2023.

This was a relatively subtle start to a benign fishing expedition attempting to persuade recipients that they are already behind the superstars and should file as early as possible – an act that would make their lives easier but also, coincidentally, HMRC’s.

This harmless statistic will started a number of hares running in the brains of accountants who have yet to file their own tax returns, not to mention those of some of their tardy clients.

First, who on earth can manage to obtain the necessary information to file a tax return on the day after the end of the year in question? The answer is likely to be anyone with negligible affairs seeking a repayment, quite possibly large numbers of children of the wealthy, and conceivably a rare senior citizen.

There must also be a number of people who are literally filing zero returns, although you would have thought that HMRC would have weeded them out and removed the obligation.

Presumably, there must also be a handful of individuals who spend the whole of 6 April badgering banks, employers and others for information so that they are able to sleep peacefully for the rest of the year.

The full picture

Many readers might wonder why HMRC did not provide a slightly fuller picture.

The statistics relating to approximately 12.3m returns that were due for 2021/2022 show that 861,000 were filed on the online deadline day of 31 January, including close to 37,000 in the hour before midnight. This swamps the numbers that are being highlighted as coming in ridiculously early, but 600,000 people didn’t even manage to file by the deadline at all.

Without getting into higher mathematics, this means that almost 1.5m taxpayers, or one in eight of the population charged with filing a self-assessment tax return, had failed to do so within 24 hours of a generous deadline.

This still represented a massive improvement on the previous year, although then there was an extension until 28 February as a result of the pandemic. Even that was not enough for 1.3m people, almost all of whom will have supplemented government coffers by paying fines of at least £100.

Those of us who have worked in the industry for years will imagine that almost every one of the dilatory 600,000 this year will have been late last year and will be late next year. A large proportion of them will also make our lives hell.

Lessons to be learned

What is the lesson for accountants in all of this? Depending on your attitude, there could be two alternative approaches.

The position could well get worse over the next few years in that, by freezing thresholds, the government is forcing more people into taxation, into losing part or all of their personal allowance and into higher tax bands, each of which might oblige more people to make returns in future.

The measured and sensible approach would be to badger clients earlier and remind them that the filing deadlines are actual deadlines. In order to guarantee that returns are completed they should be required to send you the required information with a degree of expediency.

I still don’t understand why accountants fail to offer discounts to anyone willing to submit information very early in the year and then charge massive premiums to those who want to join the 861,000 waiting to wind their adviser up on 31 January.

The alternative might be to let clients know that if they can’t be bothered to get their stuff in on time then they will be joining a very large group – 600,000 people this year and twice as many last – who have to accept that the price of laziness is a relatively modest fixed penalty that is not even rising with inflation. Indeed, HMRC or HM Government are missing a trick there, since with inflation still rampant, surely the penalties should be at least 50% higher?

In reality, far too many of our fellows will allow clients to threaten their mental and even physical health by joining the ranks of the wind-up merchants next January.

Replies (17)

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By Hugo Fair
25th May 2023 21:31

"Even that was not enough for 1.3m people, almost all of whom will have supplemented government coffers by paying fines of at least £100" ... do you have any proof of that (the payment aspect not the mere raising of a liability to pay)?

HMRC are bringing statistics into disrepute (which is a stronger way of describing what you've said above the latest press release) ... so why should we believe any unproven stats they pluck from somewhere?

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By brianheg
26th May 2023 09:59

My experience is that filing early is a very bad idea. HMRC will invariably fiddle with your tax code for the current year without changing your payments on account, in an attempt to collect your tax twice. You will then waste precious time sitting on hold before asking a HMRC staff member to change it back to what it was.

By all means have the return ready to file early. Just don't file the thing.

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Replying to brianheg:
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By Ardeninian
30th May 2023 09:41

If you are finding this is a problem, make sure you tick box 3 on page TR6 - it should prevent it.

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Replying to Ardeninian:
Stepurhan
By stepurhan
30th May 2023 13:31

Ardeninian wrote:

If you are finding this is a problem, make sure you tick box 3 on page TR6 - it should prevent it.

It should.

Experience suggest that is not always the case.

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By wyoming
26th May 2023 10:02

I was one of the 77,500. Not looking for a Tufty Badge or anything like that - I just thought, I have all the necessary info, so why not? As I used the HMRC software, it was also useful to have been an early adopter of this year's TR process - to better be able to help friends, family and a few clients who will also file their returns that way. My employer starting trialling the "carrot and stick" approach re early/late clients and it was pretty much abandoned. The issue was with the partners of the firm, not the clients, as, when it came down to it, it was a case of "oh, you can't charge him/her extra as they are too important a client" or similar.

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Replying to wyoming:
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By Pam Moreland
28th May 2023 20:52

In a previous firm we tried early bird discounts but all that happened was that the usual early filers filed early and claimed the discounts and when the tax department tried to charge premiums for information received after 1 December the directors turned round and went back on their original agreement to charge a premium sayng that they didn't want us to charge extra. Complete waste of time. You have to be backed up by your bosses otherwise what is the point?

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By TB93
26th May 2023 10:18

It'll be those pesky CIS clients wanting their tax return done NOW.

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Replying to TB93:
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By johnjenkins
31st May 2023 13:38

Why shouldn't they get THEIR money back from HMRC asap?

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By Marlinman
26th May 2023 10:23

I file mine on 6 April every year. I do very little work after 31 January, just the odd straggler, so have my March year end accounts finished before I get there and have my tax all planned. . Plenty of clients get their figures to me early April as they want to know where they stand and I have their returns filed within a few days. You can keep your clients who leave things until the last minute, I certainly won't take them on.

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By ireallyshouldknowthisbut
26th May 2023 11:16

We didnt do any this year, but had I think 5 or 6 ready to go first week in April in terms of data.

Several small ltd co directors with only directors salary & dividends which are known about, and some PAYE landlords with known data.

Quite frankly most people should have most of their data in early April unless you have a P11D and a heel dragging PAYE dept [we used to issue ours in April in the 90's for flips sake, let alone now when systems are such it should be a button press], or one of those ridiculously slow investment broker reports which takes them months to download the report and sent it out to the client.

Overall we have prepared and/or filed over 60 returns now out of 350 odd and got about 40 in or in progress and expect another 50 or so in before end of June.

Once the rebates are out of the way, the next incentive tends to be the July POA.

SA is not just for Xmas, unless you run your business that way.

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By Husbandofstinky
26th May 2023 11:20

Same as above.

For me, March is always prepping for the next tax year amongst other things and February putting off those jobs you could bat off from January.

I file my personal ITR on 6 April and CT accounts on 1 April (or thereabouts - year ended 31 March).
Job done and out of the way as the early birds do start to flock in April.

I find that April and May very busy months due to those customers as well as sorting the EOY wages etc. Those customers are great and pay on the nose, but those months do feel like a December building up to the January onslaught.

Still I find it the best time of the year, the weather is out, plenty of good work (but not stupid), decent money coming in and still enough time (light) to do some work in the garden when you get back home.

Happy days

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By Husbandofstinky
26th May 2023 11:21

Double post! Outlook....

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Donald MacKenzie
By Donald MacKenzie
26th May 2023 13:18

I did one on 6th April last year. Client asked in March if he could get an early return as he wanted to review mortgage. Year end 31st March. He sent accounts file in on 2nd so we ran up accounts and tax return. He approved on 5th but could not submit until the 6th.
A good start, but downhil for there, with a few submitted in the week before the 31st January.

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By Hometing
26th May 2023 16:22

Get them in ASAP while HMRC are "too busy " for the reduced likelihood of enquiries!

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By johnjenkins
31st May 2023 13:39

Haven't we already had an article on this?

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By austint
29th Aug 2023 17:43

I normally file my SA Return in April to generate a repayment of overpaid PAYE on my SIPP drawings. But having received HMRC's repayment in May, I was then sent a cheque for the same amount in July. My wife also experienced this duplicate repayment. It does puzzle me as to how HMRC's systems allow this to happen! I have of course written to HMRC to advise of their errors, but won't hold my breath in waiting for any acknowledgement! But I would be interested to learn whether others have experienced the same issue.

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Replying to austint:
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By wyoming
06th Sep 2023 09:04

Not had that situation very often. What I do see very regularly are cases where a client has a new PAYE source (say a pension) and the PAYE section of HMRC will issue a P800 and repayment based simply on that source - ignoring the fact that they are in SA and have self-employment and/or rental income not yet reported via Form SA100!

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