Simple by name, but not necessarily by nature
5 December, 2017
Earlier this year, HM Revenue & Customs (HMRC) introduced Simple Assessments for some taxpayers who have, until now, been required to complete Self-Assessment Tax Returns.
Those affected are taxpayers with relatively straightforward financial affairs where HMRC considers that it already has sufficient information to be able to calculate the tax owed.
The first groups to be subject to the Simple Assessment regime are people who started to receive a State Pension in 2016-17, where their income exceeds the personal allowance, and PAYE taxpayers who have underpaid tax that cannot be collected through their tax code. An example of the latter is where the amount owed is more than £3,000.
Because neither of these groups were already within Self-Assessment, no one has yet been taken out of the regime.
Existing state pensioners, with incomes above the personal allowance, will have been within the Self-Assessment regime until now. They will receive Simple Assessment notifications in respect of this year’s (2017-18) income early in 2018.
If you receive a Simple Assessment notification, you will have just 60 days in which to request an amendment, if any of the information in the notification is incorrect. It is also important to check whether there are any reliefs you are entitled to. This could be in respect of Gift Aid or employment-related expenses, for example. These will need to be included on the form and it is worthwhile seeking professional advice at this stage, as identifying which reliefs you are entitled to can be a complex task, yet the tax savings can be significant.
The deadline for the payment of tax under the Simple Assessment regime is the same as that for Self-Assessment; 31 January. The exception to this is where the notification is received after 31 October 2017, in which case payment will be due three months after the date of the notification.
Payment in respect of tax under the Simple Assessment regime can be made either by way of a cheque or by logging into your Personal Tax Account online.