Simple Assessment is a new way of collecting tax intended to make life easier for millions of customers who have had to do Self Assessment tax returns in the past.
Currently, around 11 million people have to complete a tax return every year to provide HMRC with information about their income. With greater use of existing data HMRC can now find the information for some of those customers elsewhere without needing them to complete a tax return. This new system is called Simple Assessment.
From September 2017 HMRC will remove the need for some customers to complete a tax return, starting with two groups:
- New state pensioners with income more than the personal tax allowance in the tax year 2016/17
- PAYE customers, who have underpaid tax and who cannot have that tax collected through their tax code
All existing state pensioners who complete a tax return because their state pension is more than their personal allowance will be removed from Self Assessment in the tax year 2018/19.
Rather than asking customers to fill in a return with lots of information, HMRC will now use data it already holds and calculate what tax is owed.
Customers with more complex tax affairs who continue doing Self Assessment will still benefit from a modernised process in the future. This means they will only be asked for information needed to assess their tax, benefits and credits. HMRC will complete the rest of the information automatically.
HMRC will write to customers from September 2017 with a tax calculation. This could be a P800 or a Simple Assessment letter (PA302). Customers just need to check the information is correct, and if it is they can pay their bill online or by cheque by the deadline in the letter.
If a customer thinks any information is incorrect they have 60 days to contact HMRC. For instance, if they think amounts used are wrong or HMRC didn’t act on information received. Should customers miss the deadline they should contact HMRC to discuss their circumstances or financial penalties will be applied in line with current HMRC policy.
