Rethink on self assessment tax deadline changes

Speaking at the ICAEW's Wyman Symposium on E-services last week, Lord Carter of Coles announced a u-turn on his initial recommendation to the Government on bringing forward the filing deadlines for self assessment tax returns in 2008.

At the time of the Budget it was announced that the deadlines would be brought forward from 31 January. Paper tax returns would have to be submitted by 30 September and electronic returns by 30 November. Responding to the outcry from advisers and taxpayer groups, a month ago Lord Carter agreed to consult on the issue and he now says he will recommend to the Government that the deadline for electronic returns should stay at 31 January but that paper returns should be submitted by 31 October.

Peter Penneycard, National Director of Tax at PKF accountants and business advisers, said, "It is very brave of Lord Carter to admit that he had underestimated the impact the proposals would have had on taxpayers and their advisers but we are glad he has.

HMRC says that its system can check an online return in two seconds and send the taxpayer an acknowledgement in two minutes so there was no justification for advancing the e-filing deadline."

Steve Lamey, Chief Information Officer for HMRC, also speaking on E-services at the Symposium made another statement that will give comfort to taxpayers. In his review, Lord Carter set out a guiding principle for E-services that taxpayers should only be compelled to use HMRC's software and systems when they have been tested to show that they will work efficiently at times of peak demand.

Asked to commit to this principle, Lamey confirmed HRMC would follow it. He added the E-services team had been "scarred" by the system crashes that occurred near the filing deadline in January 2005 and that these would not be repeated.

Peter Penneycard commented, "E-filing can have advantages for taxpayers and their advisers as well as HMRC so we all want to make it work. To date, HMRC's record of shaky and incomplete systems has discouraged taxpayers from e-filing but with the common sense approach that Lord Carter is taking in auditing the project there is a much better chance that e-filing will deliver the speed and security we all want. If it does, taxpayers will use it."

". . . .as a principle HMRC should only require use of an online service where the particular service meets the needs of the main users and it has been tested to show that it can meet demand, and provide a good customer experience, at the peak times. "