In October 2017, HMRC introduced a new way of collecting Personal Tax. The process, enticingly called Simple Assessment, takes data from previously submitted Self Assessments and uses it to calculate what tax is owed.
Who’s affected by Simple Assessment?
Two groups are affected:
- Those who claim a state pension for the first time, who also have income that exceeds the personal tax allowance.
- Those who pay tax through PAYE, but have underpaid tax and can’t have the outstanding amount collected through their tax code.
You can pay a Simple Assessment through online or mobile banking, personal debit or credit card or with a cheque.
Is it all good news?
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 attempt 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.”
What should I do if I receive a Simple Assessment?
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.