HMRC’s assessments Self versus Simple

Are these simple assessments HMRC’s way of turning back time???

Apparently, I say this because it was before my time as an accountant, before Self Assessments HMRC estimated how much tax someone needed to pay, the tax payer then appealed, a tax return would be submitted and once the figures agreed the tax payer would then hand over his cash in the local tax office.

The new procedure suggests that from the tax year 2016/17 HMRC will raise “simple assessments” to those whose main income is taxed under PAYE but where the tax payer also has up to £10k other taxable income (this income threshold has not been included in the legislation).  The aim of the simple assessment is to take these taxpayers out of the SA system.

It is believed that for the 2016/17 tax year those whose tax underpayment cannot be coded out will be the first to receive a simple assessment from mid-august 2017.

People who reached pension age in 2016/17 will also be notified in August/September whether they will be within the new regime for 2016/17, then the PA302 simple assessment will be issued in October 2017.  Pensioners with income which just exceeds their personal allowance will remain in SA procedures for 2016/17 but will join the new scheme for 2017/18.

If the taxpayer receives a notice to submit an SA Tax return then HMRC must withdraw that notice before issuing a simple assessment.

 

It is important to react within the 60 days given to the taxpayer to query the simple assessment, as after this the assessment becomes binding if not challenged in this period, and the tax liability becomes payable.

The normal tax date of 31st January for payment applies, however, if the simple assessment is issued after 31st October following the tax year the tax will be payable 3 months after the date of the assessment.

Simple assessment will not come under MTD taking many small taxpayers out of the new quarterly reporting procedures.

If you receive one of these simple assessments and would like to know how to go about querying it please do not hesitate to contact us.

Tracy

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