Munday Long and Co principal, Ray Long who provides tax return advice to numerous corporations, partnerships and individuals explains “Previously, there were two dates for filing a paper return: 30 September and 31 January, depending on whether the taxpayer wished HMRC to calculate the tax owing.

But as from this year (the tax year ending 6 April 2008 and onwards), there is only one paper filing date: 31 October”.

Taxpayers who file late paper return, but pay all of their tax outstanding before 31 January 2009, will have their penalty ‘capped’ at zero. So a late non partnership paper return will not, in 2008, accrue a penalty provided that the taxpayer pays the tax by the due date.

However, this arrangement is unlikely to apply in the future as HMRC have made it clear that they are retaining the cap to allow taxpayers a soft landing in the first year of the new process and because the penalty regime review is next to address penalties for late returns, unifying these across all taxes, in a similar way to the new penalties for incorrect returns.

Online returns can still be submitted up until 31 January.

Ray added, “As part of a proactive tax return advice service your accountant should have already made you aware of your options. In the current climate our approach to tax return advice is very much about not what you earn, but what you keep”.

If you have any questions or concerns about the changes and how they will affect you, your business or your partnership, please contact Munday Long & Co on 01923 82 00 88 or visit our website.