Simple Assessments to Replace Tax Returns for Simple Cases

Simple Assessments - Tax

For some taxpayers HMRC hold all the data required to finalise their annual tax calculations, so instead of requesting a tax return from these individuals, HMRC will now issue a simple assessment.

This new system commenced in September, applying currently to new state pensioners with income exceeding their personal allowance and PAYE taxpayers who have underpaid tax that cannot be collected through their tax code. Those who meet this criteria but have been issued with a notice to file a tax return in 2016/17, will still be expected to do so, with the expectation that they will be entered into the new system from 2017/18.

Simple assessments will be issued in the form of either a calculation or a letter, otherwise known as forms P800 and PA302, and these will detail how and when to pay any tax which is due.  A taxpayer will have 60 days to appeal the assessment if they think it is incorrect.

For those with more complex tax affairs, HMRC still intend to incorporate this ‘pre-population’ system where information is held, but other information will be reported through the tax return.

If you have any further queries please contact Green & Co on 01633 871122.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.