Understanding ‘Simple Assessments’
A Simple Assessment is one made by HMRC rather than the taxpayer, meaning it is the opposite of a self-assessment. If a taxpayer has been sent a notice informing them that they need to file a SA tax return, then before a Simple Assessment can be issued, HMRC must withdraw that notice. The time span of when a Simple Assessment can be issued by HMRC is up to four years from the end of the tax year.
So, who does the Simple Assessment apply to?
Basically, the main aim is to remove the taxpayer from the SA system, where the income or gains is minimal and is not taxed under PAYE. The two groups of taxpayers below will be amongst the first to be issued with the Simple Assessments.
- a) individuals who in 2016/17 began drawing a state pension and who’s total income is above that of their personal allowance for the year: and
- b) those who have unpaid tax for the year 2016/17 and are unable to have it collected via PAYE.
If a pensioner has a state pension that is above their personal allowance they will be removed from self-assessment from the year 20218/19 onwards.
Now for the technical part….
Initially, the Simple Assessment will begin in the paper form of an SA302. However, encouragement is being given to taxpayers to use the online payment system to pay any tax due before the deadline that is printed on the form. The taxpayer is able to view their personal tax account online, but it has yet to be made clear, if calculation for the Simple Assessment will be displayed within an area of the personal tax account.
What if I disagree with my simple assessment figure?
There doesn’t appear to be much information and guidance on appealing a Simple Assessment. If a taxpayer believes that any information is incorrect, then according to the briefing, they should contact HMRC within 60 days. It has not been clarified if appeals can be accepted via telephone and there doesn’t appear to be any specific form to begin the appeal procedure. It is suggested on the HMRC contact page that any taxpayers who wish to challenge their Simple Assessment can do so by using Twitter or Webchat.
How do I pay the tax?
The current tax payment date remains unchanged, meaning tax due for the year 2016/17 needs to be paid by 31st January 2018. However, tax will be payable three months after the date of assessment if the Simple Assessment was issued after 31 October following the tax year. It is not necessary, after receiving a Simple Assessment, that the taxpayer has to begin making payments on account.
So, in short….
The powers of the Simple Assessment are entirely separate from the requirements of those reporting income via their digital account under MTD.
Unlike MTD, the simple assessment expects to remain as a good old paper procedure.