Last minute taxpayers still plague busy season

Hand rising out of a grave
istock_moklv
Share this content

Batten down the hatches: the January rush is alive and it's as busy as ever. According to HMRC, a week before the self assessment deadline three million taxpayers had still not completed their 2016-2017 returns.

At the start of the year, we asked whether the January rush was a myth. But judging by HMRC's latest tax return figures, our death of busy season pronouncement was premature.

Despite practitioners pleading with clients for the last 20 years and HMRC’s nagging duck campaign, as of last Wednesday, a third of tax returns are left outstanding, with eight million people having filed their 2016 - 2017 tax return.

Confirming that the last minute bottlenecks are still a problem, HMRC reported that last year 840,000 people missed the 31 January deadline. As practitioners are surely aware, taxpayers who don’t make the deadline instead have a £100 penalty to deal with. If that doesn’t jolt taxpayers into action, after three months HMRC imposes an additional daily £10 penalty.

As the laggards wake up to the looming deadline, the AccountingWEB community is still besieged with last-minute client panic. It’s the same story every year: “The first week of January nobody wants to know, the second week clients start to think about it, and then from week three, we see a mad rush,” explained AccountingWEB regular NH. “I have tried for over 15 years to get clients to change but whatever we do, carrot or stick, it is always the same old ones.”

It's human nature

Taxpayers have had 20 years to adjust to the 31 January deadline, so why do so many still leave it until the last minute? “I think it is human nature,” ICAEW deputy president and AC and Mole partner Paul Aplin told AccountingWEB, breaking away from his clients’ tax returns. “There are still a lot of people who instinctively leave it to the last minute and I think they're always going to.”

Frustrated by the same latecomers, AccountingWEB’s Spreadsheet user is even considering adding a deadline clause in a revised engagement letter. “I'm fed up with the same people every sodding January thinking I am sat here twiddling my thumbs and will always squeeze them in,” the member commented.

And leaving until the last-minute risks unexpected delays, such as HMRC technical difficulties or the winter flu.

“You never plan for a significant number of people going off ill, but that's one more danger of leaving it late,” Aplin said, recovering himself from a bout of the flu. “I think if nerves are a bit fraught here it is thinking are we going to have enough people who are going to make it.”

“It's another one of those things you have to factor in again. Maybe you don't have all the time up to the 31st available. There are some things you can't predict.”

Not as bad as it used to be

That’s not to say there isn't some truth to the 'death of the January rush' theory: AccountingWEB member Ireallyshouldknowthisbut’s easier January was the result of sacking most of their late clients and filing tax returns earlier. “We had a very busy October through to December, but Jan is a lot more relaxed. It's more about planning and company work than mucking about with people who have been sat on their hands for 9 and a half months.”

And practitioners can take solace in the fact that over last 20 years the annual client chasing event has become easier.

“The pressure is still there but at nothing like the level it was back in those first two or three years,” said Aplin, who filed the first electronic tax return in 1997. “We've learned our lessons and the things that arrive late in the day we know to ask for much earlier, and I think the technology is better than it was 20 years ago.”

Prevent next year's stress

As for preventing this from happening next year, Aplin advises practitioners to use the first week of February to review their client lists.

“Have a look at the clients you're dealing with in January and think: 'what was the reason?'. I think there are different reasons for different clients. With som, we were waiting for one item of information or waiting for two items of information.

“I think if you can identify those just make sure early in the new tax year, those are the first things you're asking for.”

Are you still working until the last possible second or are you already thinking about that post-SA holiday?

About Richard Hattersley

Richard Hattersley

Richard is AccountingWEB's Practice Editor. If you have any comments or suggestions for us get in touch.

Replies

Please login or register to join the discussion.

avatar
30th Jan 2018 10:38

Ten days ago I had about 25 returns to do. Now down to two. One client only supplied her P60 yesterday, having sent her 2016 version in THREE times in response to requests. Another client only told me they had transferred two flats to a son (in late 2016) a few weeks ago.
Some people just want to avoid the whole issue so put it off. One asked if I am stressed but I responded "It's not me that will pay the penalties."

Thanks (3)
avatar
30th Jan 2018 10:43

An accountant is for your whole year, not just for January!

Thanks (3)
avatar
By DMBAcc
to miltonbank
30th Jan 2018 11:16

Couldn't agree more and I have started a new regime. All current clients completed by 31 October (heavy markup thereafter) leaving me to expand my business in the Nov-Jan AND even to help out colleagues in January - now that is neighbourliness.

Thanks (0)
avatar
to miltonbank
30th Jan 2018 12:31

Love that quote!

Thanks (0)
avatar
30th Jan 2018 10:56

Those who leave it this late are idiots and are the type who end up as insolvency statistics. My own return goes in on 6 April every year and I know how much I will have to pay well before then as I plan it as I go along

Thanks (2)
avatar
By DMBAcc
to Marlinman
30th Jan 2018 11:13

How many employers issue P60s on 6 April each year. Some of my clients just can't give me the necessary docs until their employers do their bit. Dear old RTI doesn't help either.

Thanks (0)
avatar
to Marlinman
30th Jan 2018 15:13

I managed my own return on 8th April one year.
I plan to contact clients in April and suggest paperwork be collected and passed to me by the end of June to give time for P60/P11d to arrive.

Thanks (0)
avatar
30th Jan 2018 11:53

Think of it this way. No days off from mid-December. Work through Xmas and New Year ( no holidays!). Work every day in January.

Then you can work 3-4 days a week on average for the rest of the year and get some golf in (if the weather ever warms up).

Not many careers offer that as an option!

Thanks (0)
to Ian McTernan CTA
30th Jan 2018 12:24

What a horrible thought!
I had a full week off over Christmas with my family, and all my weekend as normal.

It would have made no difference to the chancers ringing me up this week.

Thanks (0)
avatar
to Ian McTernan CTA
30th Jan 2018 12:49

I wish it was like that for me. 5/6 days a week most of the year. January 1-31 every year. Need to change something.

Thanks (2)
avatar
to uktaylor
30th Jan 2018 14:54

Be careful or you will get burnt out. If you have a young family spend time with the childern which I regret not doing.

Thanks (0)
avatar
30th Jan 2018 12:03

Once HMRC start dishing out simple simon's then there should be a reduction in returns (hohoho).
It will be interesting to see how many shareholders who have to pay the 7.5% divi tax haven't declared it. Even more so when it goes down to £2k.
Got 4 more to do then chill tomorrow - yer right.

Thanks (0)
avatar
to johnjenkins
30th Jan 2018 12:50

I have lots of upset clients paying Dividend tax. If they have the money they need to pay their tax. But they still say how can I avoid paying that tax!!!!?????!!!

Thanks (0)
avatar
30th Jan 2018 13:33

What I'm hearing from Tory landlords and shareholders is that they might just vote Labour to teach the Tories a lesson. Last time it happened TB was in for a long time.

Thanks (1)
By DJKL
to johnjenkins
30th Jan 2018 14:56

Given their pronouncements up here re all the tax bands they want to have re earned income (to be fair the Nats want more as well, just not as many) you have to ask yourself where will it end, with Scottish bands veering away from rUK and assorted NI thresholds not fitting in, you will have tax and NI being charged at Yo Yo rates across one's earnings, different sources of income etc.

Still, will make the various institute exams interesting doing all the calcs by hand.

http://www.bbc.co.uk/news/uk-scotland-scotland-politics-42862383

Scottish government proposals
Income range Tax rate per pound

£11,850 - £13,850 19p
£13,851 - £24,000 20p
£24,001 - £44,273 21p
£44,273 - £150,000 41p
Above £150,000 46p

Scottish Labour proposals
Income range Tax rate per pound

£11,850 - £13,850 19p
£13,851 - £24,000 20p
£24,001 - £42,385 21p
£42,385 - £60,000 41p
£60,001 - £100,000 46p
Above £100,000 50p

Thanks (0)
avatar
to johnjenkins
30th Jan 2018 20:54

He was Thatcher but with slogans and PR

Student loans and PFI

Thanks (0)
avatar
to AnnAccountant
31st Jan 2018 08:49

That's one of the reasons I voted for him first time round.
His biggest mistake (apart from WMD, that could now be Women More Dough) was not to get rid of Gordon Brown as soon as he got in.
like the bit this morning about Government figures are always wrong. Tell us something we don't know.

Thanks (0)
avatar
30th Jan 2018 21:03

I love not having a ton of overhead. I can tell people I don't want their business anymore - albeit I say it nicely.

I have a couple of people this month who sent complex work in too late and I've told them they will get fined for late submission.

Sure, I could probably bust a gut to get it in but I already work very hard and I've been asking for the info since April. The £100 will 'learn em' or not.

Either way, I jdon't need the hassle or their money. I'll probably insist they take their business elsewhere next year whether they'd like to or not.

Thanks (0)
By DJKL
to AnnAccountant
31st Jan 2018 15:44

That is the benefits of a part time practice where frankly you do not need any of the fees as the day job pays for everything.

I had one discussion last year with a client being difficult (arguing with my advice) where I had the great joy of telling him to his face that I was not willing to waste my time arguing, I did not need him, life was too short,so it was either my way or the highway; turns out he must value my outspoken approach as he is still a client and he is now far easier to persuade to do what he is told.

Thanks (1)

Related content