BN81 : Changes to Self Assessment Tax Return Filing Dates

Who is likely to be affected?

1. Individuals, trustees and partnerships who complete Income Tax self assessment tax returns.

General description of the measure

2. Legislation will be included in Finance Bill 2007 introducing different filing dates for paper and online self assessment tax returns. Budget Note BN80 covers the related proposed changes to the tax return enquiry window.
3. Lord Carter of Coles, in his report on the “Review of HMRC Online Services” published at Budget 2006, recommended changes to the self assessment tax return filing date. Lord Carter subsequently reviewed the responses to the Partial Regulatory Impact Assessment published with his original report, considered further representations from tax practitioners and revised his recommendation.
4. Lord Carter’s revised recommendation was accepted by the Government in July 2006.

Operative date

5. This measure will apply to tax returns that are issued on or after 6 April 2008 and relate to the tax year 2007-08 and subsequent years.

Current law and proposed revisions

6. Currently tax returns are required by notices issued under sections 8, 8A or 12AA Taxes Management Act 1970 to be filed by 31 January after the end of the tax year to which the return relates.
7. For 2007-08 tax returns and those for subsequent years, there will be two separate filing dates. For paper returns, there will be a new date of 31 October (for tax year 2007-08 that will be 31 October 2008). For returns filed online, the date will remain at 31 January (for tax year 2007-08 that
   will be 31 January 2009). For taxpayers filing paper returns who want HMRC to calculate their tax liability for them, the cut off date will move from 30 September to 31 October to align with the new paper return filing deadline. A calculation of tax liability is automatically provided when a return is filed online.
8. Consequential changes will also be made to revise the period during which a return can be amended. Currently, the latest possible date is linked to the first anniversary of the filing date. The introduction of differential filing dates for different methods of filing a return would advance this date for those filing by paper. To avoid disadvantaging those who file early, the amendment window date will be linked to the 31 January anniversary date for all paper and online returns.
9. Where the notice to make a return is issued after 31 October following the tax year, a period of 3 months is currently allowed for completion of that return and the period during which a return can subsequently be amended runs from this later date. A number of consequential changes will be made to retain this minimum period of 3 months and the amendment window links.
10. Changes will also be made to five provisions (sections 28C, 33A, 93, 93A TMA 1970 and para 4 of Schedule 15 to Finance Act 2006) that have time limits linked to the current return filing dates. These changes ensure the existing dates referred to within these provisions are retained in all circumstances.
11. There is a tiny minority of self assessment tax return filers (including registered pension schemes set up under trust) for whom facilities to file online are not yet available. HMRC will allow extra time (until the 31 January deadline) for those taxpayers to file paper returns. HMRC is continuing to look at ways of extending its online tax return filing service to include all self assessment customers.

Further advice

12. If you have any questions about this measure, please contact Richard Broomfield by e-mail or by telephone on 0121 713 4604. A full Regulatory Impact Assessment “HMRC Online Services: Increasing Use of Online Filing and Electronic Payment” can be viewed via HMRC’s website.