Are we back to square one?

Sometimes one wishes the clock could be turned back and we could start all
over again. Such a case is the review of HMRC online services conducted by Lord
Carter, which proposed changing the self-assessment filing deadlines.

Having just expended three months of totally unnecessary work and effort,
together with fellow tax advisers from other professional bodies, it staggers me
that we were required to do this simply to get back to where we already were.

I appreciate there are other areas of focus in the Carter report, but all my
attention is on the proposals for reducing the filing deadlines.

Most tax practitioners feel the same way. The rest of the report pales in
comparison to the threat posed by the shortened deadlines.

Listening to Lord Carter explaining why he did not consult on the deadline
issue – essentially because it would have started all sorts of debates –
reminded me of HMRC trying to justify before the House of Lords economic affairs
sub-committee why it did not consult on the recent trust legislation in relation
to inheritance tax.

There was never going to be sufficient justification in the review process
simply to take a look at other countries’ deadlines and HMRC’s IT systems and on
the back of that to propose a reduced filing deadline. There are many
differences between UK and other nations’ tax systems and this approach was too
simplistic.

The other area which Lord Carter flagged up but which the media seemed to
have missed, is a proposed reduction in the CTSA filing deadline for small
companies, which I understand will be cut to nine months. Yet larger companies
will have a ‘carve-out’ so that they retain a twelve month filing deadline. The
decision to specifically target small companies flies directly in the face of
the government’s apparent desire to help small businesses.

Let us remember that taxpayers are the unpaid administrators of the UK tax
system. The aim of this review was to achieve even greater levels of e-filing
because it would save government money and achieve the utopia of obtaining clean
data.

So the recommendation could have been to extend the deadline for e-filing
beyond 31 January or offer an inducement of a lower rate of tax for e-filing or
other monetary offers.

What would have created a more conducive environment for encouraging e-filing
would have been the feeling that we taxpayers were being listened to. Instead,
we have had to fight a costly and time-consuming rearguard action to prevent an
even tighter set of deadlines for the free service we provide to the government.

Chas Roy-Chowdhury is head of tax at ACCA