Almost 1,000 tax advisers took part in a Chartered Institute of Taxation survey, which found that more than 80% believe their clients file late because they give it a low priority.
But they were divided on how best to improve the situation. Top of the list of incentives that advisers believe will improve matters is if the Inland Revenue introduced a small financial benefit for taxpayers who file early.
More than half of the respondents felt this would significantly improve the situation. But a less obvious solution could be to close the tax return enquiry window 12 months after the filing of the tax return.
‘The “window of enquiry” is a particular issue, and I see no reason why this cannot be set by the processing date rather than the final filing date,’ said one respondent. Almost half of the tax advisers feel there is no incentive for taxpayers to file returns early.
And in a further blow to the Revenue, most respondents were unenthusiastic about electronic filing. ‘While e-filing is the way forward, many tax advisers are unenthusiastic at present,’ said John Whiting, spokesman for CIOT, and partner at PricewaterhouseCoopers.
He pointed out several niggles that need to be addressed if the technology is to make a real impact on filing habits. These include ensuring the system can accept all pages of the tax return and electronic signatures; emphasising its security; and sharing savings that the Revenue will gain with tax advisers.
‘I am unlikely to be convinced to file by internet until such time as all papers can be dealt with in this way including relevant supporting information and the Revenue accept electronic signatures,’ said another respondent.
‘If we still have to get hard copy returns sent back by clients and stored by us here to support electronic filing, there is no benefit to us from the system.’
– Email David_Rae@vnu.co.uk.
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