Call to overhaul self assessment system

THE next Government – whatever its politics – has to look at overhauling the Self Assessment taxation system, a Coventry accountant has said.

Paul Spencer, of  Spencer Gardner Dickins, said the financial sector was always battling to meet the HM Revenue and Customs deadline of January 31 – the date when all on-line returns have to be submitted for private individuals, sole traders, partnerships and trusts.

He said the current system leads to a massive build-up of work for the industry as many people wait until after the Christmas period to send through their details.

Paper returns need to be submitted by October 31 whilst the vast balance need submitting electronically by January 31, but Mr Spencer said he believed the Government could make it far more efficient.

He said: “It makes no sense to have this one deadline for electronic returns where all the accountancy firms in the country know full well that they are faced with a massive increase in workload purely because of the deadline.

“We probably complete around 35% of our annual workload in the four weeks of January, so it means late and weekend working which is fine but does not seem to make a great deal of common sense.”

The overwhelming majority of returns are completed and filed in January, he said, but this was only because a great deal of information was only supplied once people get back from the Christmas break.

“With limited companies the filing dates are staggered throughout the year to coincide with year ends and something similar needs to be considered for unincorporated businesses and individuals,” he said.

“At the moment the Government fine those who do not get their returns filed in time but it would be far more productive if they looked to incentivise businesses and individuals for filing earlier and maybe on a sliding scale.

“It would make the system far smoother and eradicate this scramble for the deadline.”

He said the new Government should make a review of the system one of their major priorities, adding that any changes would also be a boost to Government cash flow.

“I would have thought that the Government, like any other business, would welcome a more even income stream throughout the year and staggering returns would do just that,” he said.

“A comparison can be drawn with the motor trade. Up until a few years ago the only date of new registrations was August 1 and it caused similar problems for the industry. The Government introduced a second date in March, and that has largely solved the problems.”

Spencer Gardner Dickins is based at the Innovation Village at the Coventry Technology Park and was founded in 2004.