Cast your mind back to Christmas. While most mere mortals were relaxing in front of the tree with a good scotch and a slice of cake, many accountants’ minds were already wandering to what was coming: the cold heart of winter.
For many MIPs, Christmas is just a fleeting break in the administrative storm. Simply mentioning 31 January – HMRC’s deadline for tax returns – can make accountants shudder. They are at their busiest in the greyest, coldest, bleakest part of the year, when clients’ lack of urgency can often cause January to be a month of breathless work.
Recent data from the Taxman shows that men are worse than women at getting their returns in by the dreaded 31 January deadline. Meanwhile, it reveals that over-65s were the most punctual of the age groups, with youngsters – 18-20-year-olds – the tardiest. But no group is immune from blunders – and negligence.
With D-Day now over, AAT Comment asked senior accountants for their experiences of Deadline Day. Here are their stories. Because of commercial sensitivities, all three of our intrepid AATers asked to remain nameless.
Latecomers’ bounty: The client that played the waiting game
“One client said they couldn’t remember receiving the tax returns in the first place,” recalls a source close to AAT’s high command.
But perhaps there was something more sinister going on? “They knew that if they sent it in at 2pm on the Friday before 31 January they would benefit from the fact that we only charge for the work from that day,” the source says, “so they wouldn’t have to pay for another 30 days.”
This perverse incentive – the later the work is triggered, the later the payment – is one that will resonate with many MIPs. “These clients are the sorts of people that you always struggle to get money out of,” the source says. “They are lovely people – but they don’t want to pay.”
Missing in action: The strange case of the disappearing tax return
“Several of my client’s limited companies had failed spectacularly and the liquidations were extremely stressful,” recalls one senior source, an experienced AAT-trained accountant. “As early as September I’d sent them their self assessment returns.”
On 2 February, the client’s husband called our source, asking whether HMRC had the returns. “I said, ‘oh yes, I sent them in ages ago’. “But when I looked back into it, with all the chaos going on, I had forgotten to complete the final stage. It was my fault.”
HMRC was unsympathetic – and fined the client £100. So what happens next? “We sent the returns in as soon as we realised our error and are going to appeal the fine,” says the source. “If the worst comes to the worst, I’ve said I’ll knock them something off their next year’s accountancy bill.”
Lazy and loving it: The client that was happy to waste money
“This particularly client seemed to regard fines for being late with returns as just an additional tax – and they seem perfectly happy about them,” says a very senior AAT qualified source. “I sometimes get the feeling that we as accountants do all the worrying about our clients being compliant – while clients often don’t care about it.”
Good accountants feel they have a responsibility to ensure their clients don’t pay more than they need to –so very laid back customers can present a problem for accountants, both procedural and moral. “There is an ethical question about whether you want people as clients who are so carefree about meeting their obligations to HMRC,” says the senior source. “They put our reputation on the line, and it saddens me.”
Ben Walker is the former editor of Accounting Technician.