New rules designed to simplify the tax collection process currently still only apply to two groups of taxpayers, despite being proposed almost three years ago.
Martyn Bramwell said HMRC’s Simple Assessment system was announced in former Chancellor George Osborne’s March Budget in 2015.
“The idea was to begin the process of phasing out the self assessment tax return, in favour of a personal tax account (PTA). The new system started to roll out in September last year, but as yet, it still only applies to two groups of taxpayers.”
Martyn said the new system allowed HMRC to assess the income tax and capital gains liability for certain taxpayers, without the need for them to complete a self assessment tax return. They will use the data they already hold to calculate the tax owed.
The two groups affected by the change in the rules are:
- Any new recipients of the State Pension who have income over the personal allowance for the 2016/17 tax year;
- anyone who underpaid PAYE tax and whose payments can’t be collected via their tax code.
“The Simple Assessment process will work out a person’s tax liability based on the information HMRC receives from organisations such as employers, banks, and pension providers.
“This will include any earnings under PAYE, state or employer pensions, employee benefits and expenses, and savings interest.”
Mr Bramwell said taxpayers must check the details on the calculation they receive from HMRC, and pay any tax due by the deadline – any queries need to be raised within 60 days of the calculation being issued.
“If you have an existing state pension and you’ve received a notice to file a tax return for the 2016/17 tax year, you should complete it in the usual way – then in 2017/18, you’ll receive a Simple Assessment notification instead.
“Currently accountants cannot access a personal tax account directly on someone’s behalf, but professional advice is always helpful when it comes to ensuring your minimising the tax you need to pay.”
Martyn Bramwell, Tax Department Manager