Mottos, proverbs, sayings, whatever
you want to call them, have stood the test of time and most of them
would serve most of us very well most of the time. My grandfather, a
joiner by trade, would receive calendars each year from his suppliers.
My favourite was the one that sat on his bench. You tore a sheet off
the front each day to reveal today's date and, better than that, a new
thought for the day. I have not seen one of these for a while but I
guess they are still out there. The modern equivalent is the
"fortune cookie" which pops up on your computer screen each
morning. The medium of communication should not be of importance but,
somehow, it's not the same.
I came upon a quote the other day,
"Delay is preferable to error," attributed to Thomas
Jefferson. In everyday life I would wholeheartedly agree. However, as
"delay" and "error" are words I encounter daily in
my work, I donned my tax hat and began to question how well this motto
would serve the tax adviser. Unfortunately, under the self-assessment
regime, neither delay nor error is acceptable.
If you delay submitting your tax
return beyond 30th September you will have to prepare your own 32 page
tax calculation and will miss the opportunity to have any
underpayments collected through the PAYE system. If you delay beyond
31st January you will be charged a penalty. If you delay paying your
tax on time, interest and surcharges will apply. So, delay is
certainly not advisable, but is it preferable to error? It must be: it
is well backed up. If it's good enough for Herodotus (459 BC),
"Haste in every business brings failure," it's good enough
Or is it? What about, "He who
hesitates is lost"? This starts to sow some seeds of doubt.
Realistically, it depends on the size of the error and, more
importantly, whether or not it is discovered! If it is discovered, the
Inland Revenue will charge interest on any unpaid tax and can charge a
penalty equal to the tax lost although this will normally be reduced
in cases of genuine error. If it is not discovered, nobody will ever
know that an error was made and your haste will have been rewarded. On
balance, the maxim just about stands scrutiny.
This thought process led me to look at
some other quotations from a tax viewpoint. Harry Weinberger (1917)
said, "The greatest right in the world is the right to be
wrong." Try arguing this point with the Commissioners of the
Inland Revenue when you have incorrectly applied indexation allowance
and taper relief to your unapproved share options and see how far it
Here's another good one,
"Innocence has nothing to dread," Jean Racine (1677). You
may have a different view if you have just been subjected to a 12
month investigation by the Inland Revenue which cost you over £1,000
in accountancy fees and revealed that your tax affairs were perfectly
Obviously, the best advice would be to
avoid both delay and error. Start your tax return early and give
yourself plenty of time to get it right before submitting it in
September. If you can not cope, appoint a tax professional to handle
things for you. If you fear an Inland Revenue investigation, insure
yourself against the costs of dealing with it. But will you do it?
Unlikely. In the words of Joseph Addison (1711), "There is
nothing we receive with so much reluctance as advice."
But you should. If you have not
started dealing with your tax return for last year yet, do it now.
"It's better late than never." Leave it much longer and you
will be too late and, "There's no use in crying over spilt
milk." That is why I am advising you now: the Danish proverb,
"Advice after injury is like medicine after death," is,
"Probably the best proverb in the world."
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