Changes to the deadline for self assessment Tax Returns

The Government has accepted recommendations to bring forward the deadline for filing self assessment Tax Returns.

At present there is one compulsory Tax Return filing deadline: 31 January after the tax year end. Tax Returns are normally issued on 6 April, so taxpayers have over nine months to collect the information required and complete the form either by hand, online, or with our help.

However, the taxpayer must also calculate the amount of tax due to be paid on 31 January, which can be very complicated. HM Revenue & Customs (HMRC) will do this tax calculation and let the taxpayer know the amount in good time for the January payment date, if the Return is in by 30 September.

The original recommendations

The Carter Review, which was commissioned by the Government last year to advise on HMRC's online services, recommended that from 2008, all taxpayers should have to file their Tax Return by 30 September if they sent in a paper copy of the form. The deadline for filing Returns online was also set to be brought forward to 30 November.

Lord Carter of Coles, who led the Review, also suggested that HMRC should have exactly 12 months starting from the actual date the Tax Return is received to query any aspect of that return. Currently, HMRC have a 12 month window in which to raise queries which starts from 31 January, the final deadline for submitting the return, so they have longer to look at Returns which are submitted early.

In practice, the completion of a Tax Return cannot start until the PAYE forms such as P60 and P11D are given to employees on or before 31 May and 6 July respectively. Where an individual is self-employed their accounts must be prepared before the profit and expense figures are included on the face of the Return. Many tax-payers will also have to wait for their bank or building society to confirm the amount of interest paid on their savings during the tax year.

All this pre-preparation work means that many Tax Returns cannot be completed until at least July or August, which would leave around two months over the summer holiday season to submit a paper Return.

The new filing deadline

The plans caused a significant amount of consternation amongst professionals and business groups, and following the response to the partial regulatory impact assessment, Lord Carter revised his recommendations.

With effect from 2007/08, the deadline for filing paper returns will now be set at 31 October, while the 31 January deadline for filing via the internet will remain unchanged.

For advice and assistance with your Tax Returns, contact us.