Let's Dance?

Let's Dance?

RICHARD CURTIS considers the Inland Revenue's latest enabling idea.

DANCING OR BOXING? Do the reactions of the profession to the Revenue's latest 'enabling' plan remind me of two novice dancers edging around a dance floor or two novice boxers edging around the ring? On the basis that we are all working to the same end, let us hope it's the former. The Revenue announced, on 19 October, that 'as part of its annual telephone reminder programme, for the first time the Revenue will be contacting represented taxpayers to encourage them to send their records, papers, etc. to their tax adviser in good time for the 31 January 2005 filing date'.

The Revenue plans to telephone between 250,000 and 300,000 taxpayers to remind them of the deadline, of which approximately 45,000 would be represented taxpayers who have submitted tax returns late in prior years. Presumably in response to the controversy and concerns regarding the recent enabling letters to the self employed, the Revenue said 'We fully appreciate the relationship between tax adviser and client and have briefed our operators accordingly. No direct mention of previous years' compliance will be made during the call'.

The Revenue said that this plan arose from the Working Together initiative and requests by practitioners that it should help them to put pressure on their clients to obtain information and so avoid a last minute rush to prepare returns on the part of practitioners and/or a penalty for the taxpayer.

The practice management fandango

There must be practices where information is received, dealt with and submitted to the client and the Revenue within a very short period of time. But I also suspect that there are plenty of over-worked practitioners who face a pile of tax return information each morning that they are trying to juggle with their other work commitments. How will they react when clients phone after having received a call from the Revenue, especially if they have sent the information to their agent and it is waiting to be dealt with? Despite the Revenue's assurance that it 'fully appreciates the relationship', I am not totally convinced that this is going to do a great deal to improve matters.

Furthermore, who is best placed to manage their portfolio of clients; the Revenue or practitioners who will wish to prioritise their various workloads? And most responsible practitioners will have sent reminders to their clients. A £100 fine may not be a huge amount on an individual basis, but if the practitioner has been dilatory and not submitted returns, this could make quite a hole in the finances of many practices. (Would raising the penalty improve compliance?)

This is now largely academic as the day after our enquiries, we were advised by the Revenue that 'some resource issues and a consequent delay in the intended start date mean that the timing of these telephone reminders might be less effective than we had hoped. Additionally, we have had a considerable amount of feedback from agents ... drawing attention to the timing in particular. So we have decided to postpone the project until next year and will aim to make these calls mid-2005 when we will be better placed to encourage early filing for the January 2006 deadline'. Now who is planning ahead and prioritising workloads?

The Revenue welcomed feedback, and while not privy to the responses, I suspect that it was sadly disappointed if it was expecting a romantic slow waltz with agents as the dark evenings of the tax return filing season drew to a close.

Co-operation between the Revenue and practitioners is the way forward and I would encourage the latter to give feedback via the Working Together initiative. But, to continue my analogy, the fandango is a courtship dance and the Revenue should be courting practitioners, not disaster. Unless we avoid stepping on each others' toes, we are all going to end up getting somewhat bruised!

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