Shrewd or Scrooge-like? Accountants assess the Christmas self-assessors

Almost 3,000 taxpayers won’t need to accept HMRC’s new penalty wavier offer, because they last month went ‘humbug’ on Christmas by self-assessing on December 25th.

Up from 2,700 previously, 2,828 customers filed their January 31st tax return on Christmas Day, HMRC said, indicating that shunning turkey for tax is now a growing tradition.

But these ‘festive filers’ were not alone – rather, they were part of the 31,000 self-assessors who at odds with the celebratory time of year, submitted their 2020/21 tax return between Christmas Eve and Boxing Day 2021.

‘Scrooge-like’

“It might seem a bit Scrooge-like to do your tax return on Christmas Day,” Emily Coltman, chief accountant at FreeAgent told FreelanceUK.

“But when you look a bit closer [both at this year, and at freelance workers’ circumstances], you can definitely see some good reasons for it.”

Another chartered accountant Graham Jenner agrees.

‘Sensible -- if you’re a busy freelancer’

“For those self-employed people working in some sectors [between now and February], they may only have had a couple of days off, so Christmas Day could have been one of the few sensible times they had to submit their return.”

The founder of Jenner & Co continued: “And remember -- this year similar to last year, cancelled Christmas plans due to covid-19 issues may have resulted in Christmas Day feeling nothing like Christmas Day…and so, if it’s no longer a proper Christmas, maybe just get that tax return filed!”

Away from covid, age-old issues to do with spending consecutive days with relatives might have made tax return-filing look less taxing, implies FreeAgent’s Ms Coltman.

‘A tax return can be tempting, pitted against squabbles’

“There will be some self-employed people who just want to have an excuse to get away from the usual noise and stress of Christmas.

“When compared to squabbling with the in-laws, playing another temper-fuelling board game or sitting through the usual TV specials, a tax return can be a tempting prospect for an hour or so of peace and quiet,” she said.

The accountant was speaking before HMRC announcing that penalties for online tax returns that reach the Revenue after January 31st 2022 will this year not be issued until February 28th (as they weren't last year).

‘Still fear-inducing but now less time-consuming’

But the mere prospect of being penalised for filing late or paying late might have also inspired some of the 31,000 to take action over the Christmas holidays.

For other freelancers, Coltman said, filing may simply no longer be all that arduous.

“A big reason for festive filing is that self-assessment has become a genuinely straight-forward bit of financial admin for a lot of people.

“With many freelancers and small business owners using digital software to stay on top of their books through the year, it’s no longer such a daunting, huge undertaking to complete and file the tax return itself -- especially as they may well have discussed anything complex or tricky with an accountant already,” she said.

‘Tax return-filing. The new commuting?’

Even if those discussions haven’t taken place, the many months spent at home in lockdown may simply mean that freelancers and their advisers are better-placed to be hands-on with relevant tax documents and details.

Mr Jenner explained his reasoning: “Even those at the start of a Christmas holiday who wouldn’t usually have prepared a return or provided their accountant with their information, might this year have had a good opportunity to get it done, due to all the working from home that both us as advisers and our clients as individuals have been doing.”

He added: “I’m not for one minute endorsing eating into your normal working hours -- or your festive celebration hours either! But amid concern at Omicron last month, maybe people used the time they would have otherwise spent travelling and commuting on something else that’s also not hugely thrilling but is similarly necessary.”

 

11th January 2022

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