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Starting this month, HMRC is introducing a new way of collecting personal tax. The process, enticingly called Simple Assessment, will take data from previously submitted Self Assessments and use it to calculate what tax is owed.
Initially, two groups will be affected:
Whether more people will be affected remains to be seen.
Currently, around 11 million people in the UK have to complete a Self Assessment tax return. The process is time-consuming – both for those who need to fill one out and for HMRC – so any move to reduce this burden will undoubtedly be broadly welcomed. However, it’s a big change and brings with it some concerns.
Perhaps the biggest issue is what happens if the calculations are wrong, particularly as there’s only a relatively small window in which to query the amount of tax owed.
If you receive a Simple Assessment, you only have 60 days in which to flag anything you believe to be incorrect. You’ll then have 30 days in which to contest any decision by HMRC.
HMRC is a little cagey on what happens if you miss this deadline, stating “should customers miss the deadline they should contact HMRC to discuss their circumstances or financial penalties will be applied in line with current policy.”
If you get a letter from HMRC regarding Simple Assessment (also known as a PA302 letter), it’s important to carefully check the calculations.
If you’re a Crunch accounting client, let your client manager know as soon as you can and we’ll be able to advise you further.
Over the last few months of 2017 and the whole of January, client managers are busy reminding people of upcoming deadlines and things they’ll need to do to make it easy for them to keep on top of their Self Assessments.