Public accountants face a big deadline on January 31st when they need to file electronic tax returns on behalf of their income tax clients. This keeps them very busy in December and January, and leaves them with little to do in February and March.
There is a second deadline on about April 20th. Clients who suffer tax deductions under the Construction Industry Scheme and who pay too much tax as a consequence can claim it back from about this date if they file their annual tax return. Note that this deadline differs from the January 31st deadline in that it is retrospective rather than prospective.
It is obvious that any digital tax account system, as proposed in the Budget, is going to shift at least some people from the prospective deadline to the retrospective deadline. From the accountant’s point of view, this will even up the work around the year, which may be welcomed, but there is still a dead period in February and March.
What we would do in February and March is to try to do more VAT returns. As we do these, our software allows us to prepare for the annual accounts as well without any duplication of work, so we are moving some of the stress from December/January to February/March. We will also work only with Optical Number Recognition in February and March. This is a bit slower than Optical Character Recognition, but it allows us to develop and debug a good backup system for when OCR fails to deliver.
Digital tax accounts will probably put accountants under more fee pressure and more pressure to justify their existence. This is not so much of a worry for us. We are working on the technology to deal with it.
David Porthouse & Co is a forward-looking firm of accountants based in Carlisle with a keen interest in new technology with the aim of speeding up accounts production and making accountancy more affordable for our clients. David Porthouse is also a specialist in company accounts and corporation tax.