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File your SA early (as long as you don’t need help)

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Taxpayers have been advised to take advantage of the benefits of filing their tax returns early – if only the relevant phone line was available, but HMRC has taken the summer off.

27th Jul 2023
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This week HMRC encouraged taxpayers to "beat the January rush" and file their self assessment tax returns early.  

Myrtle Lloyd, HMRC’s director general for customer services, said in a press release this week: "Given that January is the busiest month for HMRC’s phone lines, I urge customers to check out the tips on filing your tax return early on GOV.UK and to consider doing so themselves".

The Revenue added that filing early will allow taxpayers to plan, budget and access help in good time if needed.

This particular nugget of advice feels impeccably timed, coinciding as it does with the closure of the SA helpline from 12 June until 4 September 2023.

While there are clear merits to getting your affairs in order and the 2022/23 tax year done and dusted in good time, HMRC's press release will do little to repair increasing frustrations among taxpayers and their agents around sub-standard service levels at HMRC.

Benefits of filing early

Alongside the obvious - knowing the exact amount of tax you will need to pay is useful for planning and budgeting purposes - there can also be a financial incentive to filing early.

Where taxpayers expect their current year income to be less than in the previous year, they can opt to reduce their payments on account (POA) during the SA filing process. With the second POA for the 2022/23 tax year due on Monday 31 July, there could be a significant benefit for those taxpayers in getting it tied up now.

As reported in the Financial Times, soaring interest rates mean big rises in interest on late payments. HMRC charges 2.5% above the Bank of England base rate, so penalties are currently at a 15-year high of 7.5%, up from 5.5% at the start of the year. If cashflow is an issue and your clients are unlikely to meet the 31 July deadline, the lower the POA due the better as the resulting interest begins to accrue.

But taxpayers should be wary of reducing POAs simply for short-term cashflow gains if they do not expect their earnings to reduce, as interest will be applied to any missed tax revenue for POAs reduced without substance when they file their next return.

Beat the January rush

Perhaps more controversial is the assertion by HMRC that taxpayers filing early will be able to access support in advance of the "January rush".

Typically, despite best intentions, many leave it until the month of the deadline to file their SA returns (although 3,275 people decided that Christmas Day was the perfect time to file for the 2021/22 tax year) so January is indeed a busy month for the helpline.

However, it seems at best a little odd and at worst a kick in the teeth for HMRC to put out this message at a time when the helpline has been controversially shut down over the summer without any consultation.

It’s likely that as well as a January rush we will also see a spike in calls in September when the helpline will be groaning under the weight of a three-month back log.

And spare a thought for those taxpayers who are digitally excluded and must file their SA via a paper form. With a 31 October deadline, they would have just eight weeks to resolve any queries once the helpline is up and running again.

Help is available…to an extent

In HMRC's defence, the press release states: "The self assessment helpline is temporarily closed and will reopen on 4 September 2023. Around two-thirds of all calls can be resolved by customers themselves online on GOV.UK. Customers can ask for help from HMRC’s digital assistant or chat with a webchat adviser."

Anyone who has attempted to converse with the "digital assistant" chatbot will know that you are sent on something of a wild goose chase, fed some generic tutorials – admittedly useful, but only if your query is fairly standard - and eventually if your issue has not been resolved the inevitable message pops up to remind you that: "our advisers are not available to discuss your query at the moment."

The good news is that the Agent Dedicated Line (ADL) will remain open for queries including those relating to self assessment while the SA line is down. Therefore, taxpayers with more complex accounts might consider appointing an adviser to manage their SA filing.

So, advice to taxpayers: file your SA return early, but not too early, and if it's in any way complicated, best to leave it until the autumn - after all accountants need holidays too!

Replies (7)

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By Tom+Cross
27th Jul 2023 17:06

The irony of all of this is simply mind-blowing.
Here we have the chief 'cashiers' for HM Government and the originator of one of the most complicated tax codes, in the worldwide economy, and it's basically been shut down, since heaven knows when, or can remember.
It's a shameful organisation and part of the current shambles, headed by HM Government.
The civil service requires root and branch reform, which of course won't happen. Well, not in my lifetime, anyhow.
I really do pity anyone venturing into this profession at the moment. Learning to knit fog would be a less challenging occupation.

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By Hugo Fair
27th Jul 2023 17:22

Isn't this just the same story (a degree of self-contradiction by HMRC that would embarrass any other organisation) as what I posted last week at https://www.accountingweb.co.uk/any-answers/so-its-not-true-then ?

It's simply yet another example of HMRC's "do as I say, not as I do" attitude - which is patronising!

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By Catherine Newman
28th Jul 2023 09:03

And they still want to bring in Basis Period Reform?

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By daz.coad
28th Jul 2023 09:54

We called the agent line yesterday and asked why it took over 30 minutes before the call was answered. We thought as HMRC had closed the self assessment line this would free up a vast pool of 'experts' to enable other services to run more smoothly.
The answer from the chap was that more people are calling now calling the agent line.
I thought Jim 'Ha Ha Ha (I still have a job)' Harra said they could close the line because nobody called in the summer, not like him to get it wrong!

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By Ammie
28th Jul 2023 10:06

I despair!

Excuse me while I withdraw to a dark room for a period of calm.

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By mydoghasfleas
01st Aug 2023 15:16

In HMRC's Charter report it admits standards are far below expectations and baldly states it looked for further efficiencies to reduce costs. I think that summarises the problem. There is no thought to improving services only to cutting costs.

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By Trevithicks_Piston
07th Aug 2023 13:42

I have just seen the this phrase used in another article. (New rules: How HMRC works with tax agents)

"HMRC has gotten tons of complaints...."

I knew that one day I'd see something and know it was time to just give up!

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