This year in particular, the world is dominated by deadlines. In the UK the BREXIT deadline of 29 March looms large in both the political and economic spheres.
In the tax world, 31 January has loomed large for over two decades. Some have questioned the importance of deadlines but over many years of practice, I’ve come to the conclusion that if you do not set a firm deadline for something that people are reluctant to do, they will put it off indefinitely.
The UK gives just under 10 months for the completion of a tax return, which is considerably more generous than say the US which gives 3 ½ months. Other jurisdictions give even less time to complete the tax return. If the UK moved to say 31stOctober or 30thNovember deadline, I suspect that the numbers who would be late would be similar to 31 January. Conversely if the UK moved the deadline to 31 March, I suspect the numbers of defaulters would again hardly change.
The old saying of work expands to fill the time available has never been so appropriate as to when it comes to tax affairs. Indeed, a person who completes their tax return promptly probably has less opportunity to lose all the tax -related documents which are sent to him or her in early April. The logical position is to complete the tax return as soon as possible after the end of the tax year because that also gives individuals the opportunity to tax plan for the current year. However, the number of individuals who do this is regrettably small.
This comes back to the main purpose of deadlines which is to force people to take actions or make decisions that they would otherwise put off. In this context, the suspicion regarding the pleas to delay BREXIT are that some of its proponents regard the impending departure of the UK from the EU in the same way that they regard the requirement to complete the tax return. Without a date being mandated, tax returns would not be completed and I suspect the UK would never leave the EU.
