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.

Nick Park analyses the Budget on BBC Radio Wales

To find out what other announcements were made in  the Chancellor’s Budget, read our Budget Summary.

Budget 2015 and 2015/16 Tax Tables

Our updated Tax Tables are available here – find out what the new rates mean for you.

If would like to  read our summary of the 2015 Budget, then please follow this link: Budget Summary 2015

The main issues include:

Farmers averaging – Farmers will be able to average their profits over five years instead of just two from April 2016.

Employer’s national insurance allowance – The employer’s national insurance allowance of £2,000 has been extended to 2015/16. Make sure you claim this on your payroll.

Help to Buy ISA – A new Help to Buy ISA will be introduced with the government providing a £50 bonus for every £200 of monthly savings up to a maximum of £3,000 on £12,000 of savings. The aim is to start the scheme from Autumn 2015.

Deeds of variation – The government will review the use of deeds of variation for inheritance tax planning.

For more tips, refer to the ‘think ahead’ boxes of our guide.

Please contact us if you need more information on these changes, or any other matter.