For most, we imagine this is music to your ears! Unfortunately the celebration isn’t as big as we hoped.
Announced 2 years ago, HMRC introduced the ‘Simple Assessment’ as a way to reduce the number of Tax Returns it issues and have advertised it as ‘the end of the tax return’. This however is rather misleading and regrettably not the end of self-assessment for a lot of individuals.
Starting from September 2017 HMRC will now be able to calculate what tax is owed by an individual from the information they already hold and third party information, without the submission of a tax return from the customer.
This doesn’t mean that all the work is done for you! You still need to take care in what information they use to complete your return; you cannot rely on their accuracy and without a submitted tax return, not all information they hold is guaranteed to be up to date.
No one wants to face a penalty so it’s always good to double check its correct!
Who will this affect?
To begin with, only 2 groups will be effected by this change and will not be required to submit a self-assessment tax return:
- State pensioners: Those starting state pensions who had income in excess of the personal allowance in 2016/17 (£11,000).
- PAYE Taxpayers: Those who owe tax that cannot be collected through their tax code.
Additionally in 2018/19 if you are a state pensioner and your pension is more than your personal allowance, you will not be require to complete a tax return.
What happens now?
HMRC will write to customers with a P800 or a Simple Assessment letter (PA302) showing:
- Income from their pay
- Pension information
- State benefits
- Savings interest
- Employee benefits
It is then your responsibility to check the information is correct and contact HMRC within 60days if you find any errors.
Don’t hesitate to contact us if you need any help with your tax affairs.
You can call us on 020 8977 0905 (Hampton Wick Office) or 01932 855644 (Weybridge Office) to speak to an adviser.