What simple assessment means for you?

Posted by Clear House Accountants on January 30th, 2019

Under Simple Assessment, HMRC automatically calculates tax liabilities using a Simple Assessment Calculation ‘SAC’ for some taxpayers. This removes them from self-assessment system. The procedure will start by concentrating on new state pensioners and PAYE clients.

In the new Simple Assessment procedure HMRC is going to use the data they received from other sources to decrease the number of individuals that must submit a Tax Return:

  • State pensioners who are new with income beyond the personal allowance threshold will have been taken off the Self-Assessment system from September 2017.
  • PAYE taxpayers that have paid less tax than required which cannot be collected using their PAYE tax code will also be taken off from the Self-Assessment system.
  • State pensioners who provide a tax return because their state pension is higher than their personal allowance will be taken off from Self-Assessment in 2018/19 tax year.

HMRC will analyze the data that they hold to automatically compute any tax owed:

  • HMRC would have started writing to taxpayers using a P800 or PA302 with the tax calculations from 2017 onwards.
  • Taxpayers should check and make sure that the data is correct and pay the required tax to HMRC. A good accountant can be used if you think the calculation looks incorrect and any tax must be paid. A taxpayer will have 60 days to communicate with HMRC if they believe some of the data is incorrect.
  • If HMRC fails to correct the information, the taxpayer has 30 days to make an appeal.

Simple Assessment will presently be used only in the simplest of situations but will be released for more complex cases together with the planned improvements to the personal tax accountant

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