View more on these topics

SELF ASSESSMENT

The recent case of Steeden v. Carver (Sp C 212) concerned a self assessment tax return handed in at the tax office mid-morning on Monday 2nd February.



The law requires the return to be delivered to the tax office no later than midnight at the end of 31 January. But the £100 fixed filing penalty is not charged where a return is filed late and the taxpayer had a “reasonable excuse” throughout the “period of default” defined in Section 93(10). That period starts at the beginning of 31 January and ends at midnight on the day before the day on which the return is actually filed. The Inland Revenue view of when the period starts is contrary to the comment of the Special Commissioner in Steeden to the effect that the period of default begins at midnight at the end of 31 January . His decision does not however turn on that point and they consider the detailed statutory definition of the period of default is in line with their view.



Their approach reflects the fact that, where a return is put in the tax office post box overnight, there are practical difficulties in telling whether it was delivered before or after midnight.



For returns required to be filed by 31 January 2000 they take the view that:



 a return delivered by midnight at the end of 31 January is clearly on time and there is no question of a late filing penalty,



 a return found in the tax office post box before 7:30 am on Tuesday 1 February will be treated as put there before midnight and, hence, as filed on time;



 a return delivered by hand or in the post later on that day is late and the “period of default” is the whole of 31 January. But, following the Steeden decision, they will accept that the taxpayer had a reasonable excuse throughout that period, and no penalty will be charged;



 a return found in the tax office post box before 7:30 am on Wednesday 2 February will be treated as put in the box before midnight on 1 February; this means that it was filed late and the period of default is the whole of 31 January, but we will accept that the taxpayer had a reasonable excuse throughout that period and no penalty will be charged;



 a return found in the post box subsequently (or handed in at any time during or after 2 February) is late and attracts a penalty except where on the particular facts of the case the taxpayer can show he or she had a reasonable excuse throughout the period of default.



Comment



Advisers should consider the implications for the next deadline filing date which is Monday 31 January 2000. Both Monday 31 January and Tuesday 1 February are normal working days. Inland Revenue offices are usually open during the core working hours of 10 a.m. to 4 p.m. Many of the larger offices eg. in large city office blocks, and some of the smaller offices do not have a post box for security reasons. Advisers or taxpayers who hand in their returns on 31 January 2000 could always ask the counter clerk for a proof of receipt eg. a compliment slip briefly listing the documents handed in, duly stamped with an official tax office date stamp.

Recommended

CML securitisation survey

A Council of Mortgage Lenders survey reveals a growth in securitisation deals could boost mortgage business and bring deals to consumers.The Morgan Stanley Dean Witter report, commissioned by the CML, shows conditions are ripe for the issuing of more mortgage-backed securities.Securitisation involves mortgage assets being “sold” in bulk to investors rather than remaining on the […]

Interest rate rise pressure

The Government is bracing itself for further pressure to increase interest rates as a the market witnessed a recruitment frenzy, according to media research experts.The volume of classified advertising in national newspapers grew at its fastest rate of 9.9 per cent in December, according to Media Monitoring Services, the highest rate since May 1998, suggesting […]

NAPF call for stakeholder

The National Association of Pension Funds.has raised fears over stakeholder plans not being allowing to run parallel alongside final salary schemes.The NAPF is recommending parallel holding of occupational schemes alongide the stakeholder once it is launched in April 2001, claiming this would cut the level of advice needed when an employee with a stakeholder moves […]

Endowment bonus plunge

Endowment policyholders are bracing themselves for a plunge in bonus rates.Experts predict over the next few weeks cuts will be made as actuaries revise downwards their equity market return forecasts.Both Royal & SunAlliance and Norwich Union are expected to report 0.5 per cent cuts on their with-profits bonds, leaving headline rates at 5 per cent.KPMG […]

Is three a crowd?

The pension versus Isa debate has raged on and off for years. Les Cameron, head of technical at Prudential, asks if three’s a crowd.   I think the debate was arguably settled by pensions freedom when the biggest downside of pensions – limited access and poor death benefits – was fundamentally changed. Total access, albeit with […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment