Beware Halloween tax return horrors! DEADLINE: HMRC vows to get tough on firms who fail to beat Saturday cut-off.

Byline: Bela Arora

BUSINESSES throughout the Midlands have been urged to avoid being "tricked" on Halloween by imminent HMRC tax return deadlines.

Birmingham accountancy practice Reynolds and Co is warning the region's business community to take account of the impending deadline, which falls on Saturday October 31.

HMRC announced the Halloween deadline alongside a warning that paper returns filed after this date will be classed as late and could be subject to a penalty. Reynolds and Co said, with the deadline date falling on a Saturday, HMRC has announced a decision to accept any tax returns in its letter box when it is first opened on Monday November 2 as having been delivered on time.

However, any paper tax returns found in the HMRC letter box from Tuesday November 3 or that are handed in on Monday November 2 will be treated as having been received on Sunday November 1. Nigel Reynolds, Principal and Founder of Reynolds and Co, said: "For this year, there will not be a penalty for late filing where they are treated by HMRC as received on November 1 but those tax returns received from November 3 will be treated as late for investigation.

Therefore HMRC will have until January 31 2011 rather than October 31, 2010 to start an inquiry into a tax return.

"If the return is delivered by hand on November 3 or by the postal service after October 30 then it will be treated as being filed late and it will be subject to both a penalty and the extended investigation period.

"Unfortunately, if businesses or individuals file a late paper tax return and then decide to file a tax return online after November 3 this will not change either the penalty or extended investigation time allowance. We cannot stress how important it is to be aware of such deadlines when filing tax returns with the HMRC."

Reynolds and Co is also advising business leaders and finance directors to always gain proof of filing as evidence when processing online.

The Government recently announced its plans to make online filing of tax returns compulsory from April 2012.