This week's opinion: 7 February 2019

Another tax return season has come and gone. Well done to the many readers of this magazine who helped their clients to meet the deadline. Although HMRC points out that 93.68% of taxpayers filed by 31 January that means more than 730,000 people did not file on time. The filing date is well advertised, and I cannot believe that many of the non-filers did not know when it was, so I can only conclude that at least a proportion of them simply decided that paying the £100 penalty was a cheap way of buying themselves an extra month.

What is the answer? I am sure that it is not to move the deadline. I doubt that the figures would be very different if the deadline were as little as three months or as long as three years: there is a natural tendency for most people to leave things to the last minute. Are higher penalties the answer? If the basic penalty were raised to, say £1,000, fewer people would deliberately file late, but penalties of this magnitude would be seen as grossly disproportionate to have any chance of acceptance.

Making Tax Digital lurks in the background of course. Under the original timetable we would now be sending quarterly updates and tax returns would be on the way out. But now that all seems a long way off. For the time being we are stuck with the present system. There is a hard core of non-filers and I doubt that much can be done to reduce the number without affecting the majority who file on time. But perhaps I am wrong: are there changes which readers think should be made?

If you do one thing…

The First-tier Tribunal’s comments in Stirling Jewellers (TC6940) para 363 onwards on the use of alternative dispute resolution as a way of avoiding polarised disputes are well worth reading. See tinyurl.com/y9ypyd88.

Andrew Hubbard