Accountants turn away rush of late taxpayers
Accountants are being forced to turn away thousands of people every year who are leaving it too late to approach them for help with their self-assessment tax returns.
Self-assessment returns must be submitted by midnight on 31 January after which a financial penalty is incurred.
But many taxpayers make a late rush to rind an accountant, only to find they are too busy.
Simon Brookings, general manager, tax & accounting professionals UK at Thomson Reuters says too many taxpayers ignore the plea from accountants to contact them early if they would like help with their tax return.
Late filing carries a fine of £100. If the return is filed more than three months late, an additional fine of £10 per day is levied.
Mr Brookings says that the stories of customers walking into an accountancy firm with “plastic bags of receipts” in late January and expecting accountants to be able to deal with their tax return are perfectly true.
“January is already accountants’ busiest time of the year and people who leave it until then even to engage with an accountant are really risking being turned away.”
“The technology for getting tax returns done is increasingly slick and efficient but the huge workload that accountants have in January makes it very hard for them to take on new customers in the weeks ahead of the deadline.”
As well as incurring penalties the late filing of tax returns can also be seen as a ‘red flag’ by HMRC, putting the individual concerned at greater risk of a tax investigation.
Thomson Reuters says that investigations into individuals and small businesses raised £5.7 billion in 2021/22, 54% more than the £3.7 billion they raised in 2020/21.
For every pound spent on investigations into individuals, HMRC receives £6.60 back in additional tax yield.
The end of January is also the deadline for self-assessment taxpayers to pay around half of their tax bill. On 1 March taxpayers face a penalty of 5% of any tax unpaid. They will also face interest charges on late payments which have increased to 6%
The interest rate which taxpayers have to pay to HMRC on late taxes was raised from 2.75% this time last year to 6% now.