Draft Finance Bill - Deloitte comments on details of Simple Assessments
11 December 2015
This week the government published draft legislation, which sets out details of the simpler tax assessments mentioned in the Autumn Statement. The legislation, which looks likely to apply to tax returns from 2016/17 onwards, will enable HMRC to issue a Simple Assessment to certain individuals who would otherwise be in the Self-Assessment regime.
The Simple Assessment will replace the need for those affected to file a tax return. The procedure will allow HMRC to withdraw the notice to file a Self-Assessment return and replace this with the Simple Assessment, which will use information already available to HMRC, such as details of employment income and savings income provided by banks. This Simple Assessment will replace the Self-Assessment normally provided by the taxpayer, and the tax under it will be payable by 31 January following the year of assessment, as for Self-Assessment tax generally.
If the taxpayer does not agree with the Simple Assessment an appeal must be made to HMRC within 30 days, and part or all of the assessment will be suspended pending agreement of the figures.
Patricia Mock, tax director at Deloitte, said:
“At present HMRC receive information only in respect of employment and pension income, and some investment income, so this initiative is likely to benefit mainly pensioners and employees for the time being. In many cases taxpayers in this category are dealt with under PAYE with investment income dealt with through their tax code. The new simple assessment process will benefit those whose PAYE income is too low to make this work, particularly pensioners. As savings income will be paid gross from 6 April 2016 there will be an increasing number of people in this category.
“Whilst the intention is to reduce time spent in completing tax returns, affected taxpayers will need to check the information included on a Simple Assessment carefully, and appeal within the time frame if incorrect information has been used. Given the complexity of the income tax system following the introduction of the Personal Savings Allowance and Dividend Tax Allowance, with potentially seven different rates of income tax that could apply, most people will struggle with the calculation itself.”
If a taxpayer has received income or gains which are not included on the Simple Assessment, the requirement to notify HMRC of these remains.
Notes to editors
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