Photo evidence could solve problem with tax returns

Individuals may need to use hi-tech camera phones this year to record the delivery of tax returns.

As the tax filing season approaches, a senior tax adviser has suggested using the phones to record the dropping off of returns, after HM Revenue & Customs recently said that it would no longer be issuing receipts for hand-delivered tax returns.

The move had prompted concern from the institutes and advisers that they would be unable to challenge penalty notices for late returns without the receipts. Whilst advisers have been reassured by comments from HMRC that explained fuller details of what constitutes an appropriate audit trail, individuals may be less aware of
the problems.

Mike Warburton, Senior tax partner at Grant Thornton, said: ‘Every year the revenue issue thousands of incorrect penalty notices. This particularly applies to hand delivered returns which can be delivered at any district.

‘In the past we have obtained a receipt which has enabled us to squash the penalty. The Revenue in their wisdom have decided to cease this helpful practice and suggest that we collect “other evidence”.

‘I was considering issuing staff with new 3G mobile phones so that we can take a photo of the return being delivered, a bit like a police line up photo.’

But Warburton was not entirely sure whether the evidence would be foolproof: ‘How do I prove the date?’

Some 3G phones allow users to record the date and time of a picture, but such evidence may not be acceptable for the tax authorities.

HMRC issued further guidance for advisers in late December, saying that if advisers got returns stamped for the relevant date of delivery, alongside a further trail of countersignatures from senior partners, that would ‘normally be accepted as “reasonable” evidence of delivery.’

HMRC added that Royal Mail offers an online ‘Track and Trace’ facility with its special and recorded delivery services. The tax authorities prefer people to file over the internet, for which there are some incentives.