Tax practitioners are approaching the dreaded “tax season”, a period where they battle with clients to extract the data required to complete self-assessment tax returns before the filing deadline.
For non-accountants reading this post, the deadline for filing the 2018-19 return is 31 January 2020 – one hundred days to go.
Taxpayers are likely to fall asleep at any mention of the “tax” word. It is rumoured that only accountants and HMRC staff burst into life when tax is on the agenda, and the latter group, perhaps not as enthusiastically as they used to.
But why the rush? One hundred days to dive into bank records or sort through payslips or pester employers for a P60. And yet dogged professionals keep up the pressure “when will you send us the missing information?”.
Practitioners will be keen to spread the load. At one extreme, all their clients could be delivering the required data January 2020, which means late nights and working weekends for firms as they struggle to process information, agree the results with clients and file returns with HMRC.
Software helps. Goodness knows how self-assessment would work if we all had to file paper returns and deal with the vagaries of the postal system.
Truthfully, there are good reasons for processing tax returns as soon as possible after the end of the relevant tax year. For example, if your self-employed income for 2018-19 is higher than the previous year there is a real possibility that you may have underpaid tax and NIC. Any underpayment will be due to be settled on or before 31 January 2020.
If your return does reveal an underpayment, would you like to know sooner rather than later so you can accumulate the required cash in good time?
Practitioners would be wise to advise their clients of the benefits of processing returns early in the tax season. January is not a good month for burning the midnight oil even if fees billed outstrip those charged the remaining months of the year.