Contractor accountants might want to let their clients know that HMRC’s Sunday hotlines are set to close down as from the end of November.

The Revenue says that contact centre staff who work on Sundays will be redeployed at peak periods which should bring down waiting times and provide a more efficient service for everybody. HMRC also plans to change the opening times of its contact centres during the week to ensure peak periods are well staffed.

The majority of lines will be open from 8am to 8pm, Monday to Friday and from 9am to 4pm on Saturdays.

A recent survey carried out in Scotland highlighted some of the problems encountered by people trying to communicate with the Revenue. Members of the Institute of Chartered Accountants were asked about their experiences and results showed that 43% of HMRC’s systemic errors and shortcomings were due to poor communications. This is a big increase from the 13% reported 18 months ago.

The director of tax at the Institute, Derek Allen, said there has been a drastic deterioration in facilities for contacting the Revenue over the last year. He pointed out that phone calls to the help desks go unanswered and letters sent could lie for months before they get opened.

Allen also remarked that many of the staff do not appear to have adequate training to help them carry out their allotted role and so technical questions relating to tax matters are passed from pillar to post. He believes urgent action should be taken to simplify the tax system.

Other concerns raised by the survey included problems with online filing and long delays before tax repayments are received.

Earlier this month, the National Audit Office published a new report ‘Engaging with Tax Agents’. It suggests that systems could be improved if HMRC and tax agents worked more closely together. In the light of the number of complaints against them, the Revenue may want to consider taking that advice on board.

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Accountants in the Birmingham area may benefit from visiting an event to be run by HMRC.

On November 3rd, the Revenue will be holding the last of its iXBRL events. This event will showcase accounts production and conversion tools that can convert existing data into iXBRL format for the filing of Corporation Tax returns.

HMRC has already run a couple of similar events in recent months, however the London event in June was probably held a bit too early as working versions of the software were not readily available at that time. People really have to see the program to appreciate the way it works, a programme manager from Carter commented.

The accounts/tax software production industry should have more commercially released products to show by the time the Birmingham show comes around. Forbes Computer/Absolute Accounts, TaxCalc and QMS have already launched iXBRL software and IRIS and Thomson Reuters will be launching products in the not too distant future.

A survey conducted earlier this year by CCH showed that many accountancy firms were not prepared for the new online submission system. As from 1st April next year, corporation tax returns must be filed in in-line eXtensible Business Reporting Language. This could cause problems for accountancy firms that file clients’ corporation tax returns from third party data as this is often in either paper or pdf format.

If you want to go to the Birmingham event, HMRC would like you to telephone the bookings team on 0845 603 2691 so they have an idea of the number of visitors who will attend the morning and afternoon presentations.

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Some freelancers may find it beneficial to consult a contractor accountant over the next few days in order to make sure their tax return is in order.

For the 25% of self-assessed taxpayers who still complete paper tax returns, the filing deadline grows ever nearer. Anyone whose return arrives after midnight on 31st October could be subject to a £100 penalty, the Revenue has warned.

There are around 9 million self-assessed taxpayers in the UK and 75% of them file online at the end of January. HMRC prefers this method of submission because it reduces the man hours spent trawling through thousands of pieces of paper.

Online filing has benefits for the taxpayer as well. Your tax is calculated automatically; you receive an acknowledgement when you’ve submitted your return; and it’s processed faster, meaning that if you’ve made an overpayment of tax, you’ll be repaid more quickly.

The taxman said there is still time to make the transition from paper to online filing by going to HMRC’s website and select “Register (new users)”.

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The FSB does not think that HMRC should force people to file their tax returns online.

The Federation agrees that although paper returns will eventually become a thing of the past, it would be better to let this happen organically.

Chief spokesman, Stephen Alambritis, said that this is an issue of equality and fairness. As an organisation, the FSB strongly believes that it is unfair to simply bracket everyone as an Internet user.

Whilst he appreciates that filing online makes the process quicker and easier for the government (and online accountants!), if a quarter of a million people want to complete paper returns, that is a substantial amount of taxpayers and HMRC should be magnanimous.

He also pointed out that considering the Revenue has made recent mistakes concerning both under and overpayments, it should not issue tax penalties if a paper return arrives on November 1st. This does not seem to be an unreasonable request when you consider the deadline date is actually a Sunday!

Currently, any returns received after the deadline of midnight on 31st October will be liable to a penalty charge of £100.

According to the National Statistics Office, there are still 9.2 adults in the UK who have never used the Internet and 27% of households do not have an Internet connection. 83% of households in London do have access but up in the North of England that figure falls to only 59%.

Those without a connection were asked why they did not have one and 39% said they didn’t need it. Are they going to be forced to get something they don’t want simply to file their taxes?

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HMRC has published a guide for businesses and contractor accountants explaining how they need to comply with the iXBRL format computations for Corporation Tax online filing.

The iXBRL guide for UK businesses is 14 pages long and is available online from HMRC’s Corporation Tax Library. The guide has been designed to give senior managers an introductory overview, so that they can cope once online filing becomes mandatory in April.

The guide explains that it is up to the company to make sure it fully complies. Companies should ensure their computer software is capable of handling the requisite type of data required for the reports.

The transition to iXBRL format accounting is going to be complicated and the Revenue accepts that there might be errors and omissions with tagging. But HMRC would like to help businesses get to right as opposed to penalising them.

Two iXBRL roadshows have also been planned to give businesses and their accountants a chance to get hands-on experience. The first of these will be held at Glasgow’s Hampden Park on September 15, followed by St Andrew’s Stadium in Birmingham on the third of November.

CCH software has also created a practice tool to help people prepare for iXBRL. Users answer various questions about current working methods and the software they use, and the iXBRL Practice Planner compiles a short report highlighting areas of concern and ways of tackling them.

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Contractor accountants and accountancy firms are not yet prepared for the new online filing system for corporation tax returns that HMRC is introducing next year.

The new system requires all data to be converted into iXBRL (in-line eXtensible Business Reporting Language) and the majority of online accountants, 92%, are undecided on how exactly to convert data into this format. iXBRL is meant to make the comparison of financial data easier.

Converting the data can be a time-consuming process and coupled with a lack of a formal relationship agreement could result in unplanned extra costs and a drain on resources next year.

Nearly a third of accountants submit corporation tax returns on behalf of clients based on information that has been produced by third parties. Of this information, 52% is submitted in paper format and 48% in pdf format, which is the least friendly of the iXBRL formats.

Earlier this month HMRC produced a list of software companies which can produce iXBRL technologies but only 3 out of the 20 companies listed can compile company accounts in the new format.

Companies such as Sage, claim the requisite software will be ready by November, but many experts believe this will be too late.

Donald Drysdale, the assistant director of Tax at ICAs said that HMRC needs to set out more clearly the requirements and how they can be met as half of the accountancy firms are having problems identifying the software package they need.

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The deadline for online VAT returns is drawing close. As from April 1st this year, it becomes mandatory to file online.

Businesses that do not comply with the new online regulations will face a fine from HMRC.

The Federation of Private Businesses believes there are many benefits to using the online service. These include 24/7 access and an instant acknowledgement of receipt. An initial online error check is performed; businesses can obtain a seven-day return and extension and use the system to nominate an agent or online accountant.

The only disadvantage, according to many contractor accountants, is that direct payment must be made electronically through the BACS system, CHAPS, Bank Giro and internet or telephone banking.

Another change that comes into effect on April 1st this year concerns the receipt of cheques. If paying VAT by cheque, the payment is classed as made when the cheque clears as opposed to when it was received.

Businesses are strongly advised to urgently review their VAT procedures, including contractors using the Flat Rate VAT Scheme, to ensure they comply with the new regulations.

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A last minute rush resulted in a record number of individuals using HMRC’s website to submit their self assessment tax returns in 2010.

Figures from HMRC showed that 6,429,899 people, including many contractor accountants, used the online facility in advance of the January 31st deadline. This is a 12% increase on last year and accounts for 75% of all returns.

The data further showed that staggering 384,638 people waited until the last 24 hours before submitting their tax return, with the busiest period between 4pm – 5pm on 29th January. Anyone who missed the deadline faces a £100 fine.

The downside of the online system is that a number of taxpayers have been targeted by ‘phishing’ crooks. The government has issued a warning for taxpayers not to respond to e-mails offering tax rebates.

According to HMRC, a number of people, including contractors, have been sent e-mails saying they are entitled to a tax refund and must complete an online form with their personal details, in order to obtain the funds.

The government has warned that anyone who responds to such correspondence faces having their bank accounts and credit cards “emptied”.

“We only ever contact customers who are due a refund in writing by post,” an HMRC statement explained.

Taxpayers were also told that the department “never uses emails, telephone calls or external companies in these circumstances” and were “strongly urged” to forward any suspect e-mails to HMRC to investigate.

We would also like to take this opportunity to stress to all our readers the importance of ignoring all emails that ask you to divulge personal information such as bank account details.

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