Covid workload prompts calls for SA deadline extension
The pressures of the coronavirus workload has led accountants and now the ICAEW to consider whether HMRC should extend the self assessment deadline.
As the constant coronavirus workload drags on and accountants are rushing to the aid of their clients, concerns have grown about the 31 January self assessment deadline.
The ICAEW’s tax faculty has raised concerns about the impact of the excessive coronavirus workload and the effect this has had on practitioners’ self assessment plans, and is seeking views on whether extending the deadline until 31 March 2021 or waiving late filing penalties would solve the problem.
‘At least a month behind’
Some AccountingWEB readers have called for a delay since September. Stats696, for example, highlighted the “massive pinch” Covid has had on their firm’s workflow.
AccountingWEB regular Michael Beaver backed the campaign in October when waiting for the latest tweak to Rishi Sunak’s Winter Economy Plan, asking on Any Answers whether anyone else has given up on meeting all their 31 January deadlines.
“Short of killing myself and my staff between now and Jan 31, I can't see how we can get through our normal compliance work (which is already weeks behinds) and now while supporting yet another further amended updated undocumented scheme,” said Beaver. I am happy for our clients who [Sunak’s new support] will help, but I'm exhausted.”
An anonymous reader echoed Beaver’s concerns: “It seems like any time Rishi Sunak opens his mouth, we get put back two weeks in our schedule of work. I estimate we're at least a month behind in our compliance work, and I'm already dreading January.”
Since then, the coronavirus support measures have changed several times over and the call to delay the deadline has gathered momentum. Speaking on AccountingWEB Live’s Any Answers Live webinar, Sharon Pocock from Kinder Pocock said she’s started her self assessment workload where they already had the information, but the January outlook doesn’t look good.
“Before the [lockdown] news came out, I thought I am not sure I have the energy for this now. I don’t think we have got over the last [lockdown]. We’re usually on it with personal tax returns. But we’re only starting to request information,” said Pocock.
Tax Faculty considers backing extension
ICAEW has received similar concerns from their members in practice about meeting the self assessment filing deadline while juggling the Covid-19 workload. The Tax Faculty committee is considering whether ICAEW should ask HMRC to extend the SA deadline.
The feeling amongst ICAEW members is mixed with some ahead of schedule, while others are under pressure providing pandemic-related business advice.
The Tax Faculty noted that the effect of the pandemic and meeting the SA deadline goes beyond the client work, with the upheaval of the virus, self-isolation and caring responsibilities has had an impact on firm’s staff.
Added to the virus-related workload is the post-Brexit transition rules which the committee said may cause an influx of businesses seeking importing and exporting advice from practitioners.
Impact of delaying the deadline
An extension to the deadline would have several implications, admitted the Tax Faculty. These include the need to extend the finalisation date for tax credits and the 30-day date for late penalties also need to change. Other considerations include the effect on the enquiry window for SA returns and the collection of Class 2 national insurance contributions which require manual intervention.
The Tax Faculty, instead, is leaning towards another option of waiving late filing penalties for 2019/20 SA returns filed by 31 March 2021. For this to work and remove added pressure on taxpayers, the faculty said the waiver needs to be automatic rather than having formal appeals.
Waiving taxpayer late filing penalties would ease the load on agents who have the necessary information from the taxpayer but they’re overwhelmed by Covid workload. As the ICAEW said, a taxpayer cannot use reliance on an agent as a reasonable excuse for a later filing.
Not a consensus
Like the ICAEW, the AccountingWEB community isn't agreed on an SA deadline extension. Not every accountant has found the last few months detrimental to their self assessment plans. Bernard Michael has had a lot of clients send information earlier than usual. “I can see a gap come end December,” he said.
Duggimon is also way ahead after being so far behind in June and approaching a meltdown. "Working from home has massively increased my productivity,” they noted.
Adam.arca also foresaw a capacity crunch back in the summer so warned clients not to leave things too late. But even though he’s slightly ahead on tax returns completed and billings he’s still concerned about what’s coming round the corner. “I seem to have a whole raft of jobs which I would normally complete in the spring / early summer,” he said.
Would an extension of the self assessment deadline help your workload? Do back another solution like waiving late penalties? Or should the 31 January deadline remain?