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HMRC simplifies the self assessment

Home / Blog Entry / HMRC simplifies the self assessment

Many people could be free of the hassle of submitting tax returns with HMRC starting to roll out a simpler system for some taxpayers. An estimated 11 million people have to fill in a self assessment return every year, including self-employed and company directors, people with high investment incomes, and those who are instructed by HMRC.

Introducing Simple Assessment will mean that new state pensioners in the tax year of 2016-17, with incomes higher than the £11,500 personal tax allowance, will not need to submit a full return. Neither will PAYE taxpayers who need to cover the shortfall in taxes they have paid. HMRC will instead estimate the taxes needed to be paid using data from other sources.

Any existing pensioners who complete tax returns as their state pension is worth more than the annual allowance, will be switched to Simple Assessment in 2018-19 tax year.

So how will Simple Assessment work?
Those who are eligible for it will receive a letter with their tax assessment from HMRC. This can be a P800 form. If you have started receiving a pension, have switched jobs, or have received support and employment allowance, or job seeker’s allowance you may receive the notification.

Others who are eligible will obtain a Simple Assessment letter; this is likely if you owe more than £3,000, have to pay tax for state pension, or owe taxes that can’t be paid automatically through PAYE. The letter will state your income, state benefits, pensions, employee benefits, and savings interest.

If the information HMRC has given is valid, you will need to pay the bill via cheque or online. You will find the deadline date in the letter. If the information is incorrect you have 60 days to correct any errors with HMRC.

If you miss the deadline you can be fined; this applies if you don’t pay your taxes, or if you don’t supply HMRC with information. It is vital that you get yourself up to date with this new system, so you avoid those unnecessary fines.

Brian G Lonis & Co is home to the most experienced and reliable accountants Stoke Newington has. We can help provide you with any other information required regarding Simple Assessment. If you require our expertise, please get in contact today.