The 10 most terrible excuses for missing last year’s January 31 tax return deadline have been published by HM Revenue and Customs.
The excuses were used in unsuccessful appeals against HMRC penalties for late filing and payment.
Many of the excuses claim it was someone else’s fault pets, girlfriends, work colleagues and even the president of the United States are named and blamed for taxpayers’ tardiness.
My two personal favourites are “I’ve been busy looking after a flock of escaped parrots and some fox cubs” and from 2013: “I had a run-in with a cow”.
Having run-ins with cows, I know, is an occupational hazard for many farmers but I can’t imagine too many are concerned with “looking after” fox cubs, unless it is lambing time and requires a good aim…
January is a bit like harvest time for accountants.
Provision of professional services means meeting January 31 deadlines, pulling out all the stops and essentially making it happen.
Weather generally doesn’t effect us, unless of course we get half an inch of snow and nobody can get into the office car park.
Usually the delays in completing tax returns are down to one or two pieces of missing information.
Often what appears to be minor and trivial information is nonetheless important for getting it right!
Once that information is available, the files are reviewed to ensure the return has been prepared correctly effectively a quality control procedure.
The quality control review is not just to ensure the information has been accurately recorded, but also to think about what is happening with a client’s particular circumstances or industry, and is there anything that can be done now or in the future that will assist them in managing their tax position.
One of the pertinent thoughts for farming clients this January is the downturn in commodity prices, and the inevitable reduction in farming profits. While nobody likes a reduction in profits, it can be an opportunity to review tax payments in January and July and consider if the payments are necessary, given the likely fall in taxable income for 2014-15.
These tax payments can be reduced to zero now, and can remove the need to pay anything on January 31, which can be welcome news if cash flow is under pressure.
Capital expenditure in the last 12 months can also be taken into account. With the investment allowance of £500,000, even if the farming business is forecasting a trading profit, any investment in machinery could potentially create a taxable loss.
This alone, is a valid reason for reducing tax payments now.
The other aspect is farmers averaging, and making sure the last two years of farming results are considered, and if there is an opportunity to maximise use of basic rate tax thresholds, personal allowances or perhaps pension contributions in an earlier year.
Tax planning has been in the media spotlight in the last few years, particularly in the case of multinational businesses and celebrities.
This has raised everyone’s awareness of tax planning and it is fair to say after recent legislative changes many of the more aggressive schemes are no longer attractive.
However, there continues to be many perfectly legitimate reliefs, allowances and valid means of arranging a taxpayers’ affairs in a tax efficient way.
Top 10 worst late tax return filing excuses for 2014:
1 My pet dog ate my tax returnand all the reminders.
2 I was up a mountain in Wales, and couldn’t find a postbox or get an internet signal.
3 I fell in with the wrong crowd.
4 I’ve been travelling the world, trying to escape from a foreign intelligence agency.
5 Barack Obama is in charge of my finances.
6 I’ve been busy looking after a flock of escaped parrots and some fox cubs.
7 A work colleague borrowed my tax return, to photocopy it, and didn’t give it back.
8 I live in a camper van in a supermarket car park.
9 My girlfriend is pregnant.
10 I was in Australia.
* Ian Craig is a partner with accountants Campbell Dallas, Perth.