With Mrs Doyle now dispatched to that great tax haven in the sky, it will be some months before we know who will be urging us all to ‘go on’ and fill in our tax return in time for 31 January 2003.
The thousands who recently voted the ads featuring the batty tea lady the most irritating on TV may not miss her. But accountants will be hoping that – irritating or not – the new public face of the Revenue will be at least as memorable when it comes to ensuring the public file self-assessment forms on time.
It might seem unnecessarily early to start worrying about next year’s self-assessment deadline – after all, this year’s passed just days ago – but prudent accountants will be readying themselves for the next cycle.
Take Anil Mohanlal for example. A partner in West London-based firm Kumar & Co, Mohanlal began writing to clients in April 2001 to warn them to get their affairs in order in time for the January 31 2002 deadline. Attached to the letter was a personalised information request sheet setting out entries made on clients’ tax returns from the previous year.
And it contained a warning. Urging clients to return details by 30 November 2001, Mohanlal said any information provided after this date would incur a penalty of 25% of a client’s normal fee ‘to cover additional costs of temporary staff, payment of overtime and other difficulties to deal with the last-minute rush’.
He also told clients that if they provided information after 31 December 2001, he would not be able to guarantee that returns would be filed in time to avoid late filing penalties.
This was essentially an opening salvo; a further letter in September offered clients a reminder of the looming deadline and the firm’s position regarding the deadlines it needed to impose for receipt of information.
Mohanlal says the letters have made a huge difference. ‘You will be amazed at the number of people who returned on 30 November,’ he says. The firm still does most of its work in November, December and January, but the late January rush isn’t as intense as it once was.
This type of badgering is becoming increasingly common – and increasingly important. Early filing is not just a necessity from the point of view of accountants – it is something the taxman appreciates the need for.
In the days leading up to last week’s deadline, the Revenue had yet to receive some 2.7 million self-assessment returns. This despite the fact it was receiving more than 120,000 forms a day – and rising.
‘The figures are very similar to last year,’ said a Revenue spokeswoman.
‘If that continues to be the case we expect to receive in the region of 300,000 returns a day in a last-minute rush to file on time.’
ACCA’s head of tax, Chas Roy-Chowdury, acknowledges that accountants themselves can do more to encourage their clients to file early by targeting those who are consistently tardy. ‘There has been a problem in general with clients who are always late,’ he says. ‘Certain clients are late year after year. And that puts so much pressure on the firms.’
Francesca Lagerberg, senior consultant at the ICAEW’s tax faculty, says that, like Mohanlal, many accountants are now warning clients that they will pass on the cost of hiring extra staff to deal with the last-minute filing rush. She supports the move. ‘It’s getting more common,’ she says.
‘But it’s quite a savvy way of doing business. A lot of accountants have been caught out because they have left it to the last minute.’
Early reminders remove the danger of accountants simply not being able to process all the returns they receive at the last minute. ‘A lot of advisers are saying “let’s be realistic”.
You can’t always turn round a tax return in a matter of hours,’ she adds.
‘The ones who send it in on 31 January are the ones who jump up and down when you can’t guarantee getting it in on time.’
Lagerberg points out that persuading clients to file early can have cashflow advantages for a firm by spreading client income more evenly over the year.
Lagerberg agrees April is a sensible time to start reminding clients with follow-up letters around the time the Revenue is advertising the 30 September deadline for taxpayers who want their bills calculated for them. ‘There are two good things about working this way,’ she says.
‘You are working in partnership with the client and helping them to help themselves.
‘You are also identifying tax planning opportunities that add value. That’s good for the adviser in terms of more fees and good for the client.
‘And,’ she cautions, ‘if you’ve not got happy clients, you’ve not got a good business.’