The Finance Bill’s Pay & File Deadline Bombshell

The 2011 Finance Bill, which was announced this afternoon, includes a shock proposal to bring forward the annual ‘Pay & File’ tax deadline from 31 October to 30 September each year. The annual extension for ROS online returns is also being curbed from 16 days to 14.

I expect that this news will be greeted with dismay by most professionals and staff in accounting, tax and book-keeping firms.  At the moment, the annual ‘October rush’ tends to start in late August or early September.  Bringing the deadline timetable a month forward will mean that firms will now have to work at full throttle from the August holiday weekend onwards – not exactly in the spirit of  ‘family friendly’ working!

If implemented, the earlier deadline is also likely to cause hardship for many self-assessed taxpayers, who now have one month less each year to prepare their annual accounts and tax returns.

The paradox is that the tax return season is getting shorter just as the tax system is getting more complex. The recent proliferation of levies and stealth taxes, together with the multitude of curbs on tax reliefs and deductions, have made the tax system far more complicated than it was a few years ago. The prospect of further tax hikes in future Budget is likely to make this problem worse before it gets better.

The old Chinese curse ‘may you live in interesting times’ never seemed so apt…