From September 2017 HMRC will remove the need for some individuals to complete a tax return. To begin with, this will affect people who fall into the following categories:
new state pensioners with income more than the personal tax allowance in the tax year 2016 to 2017
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 to 2019.
Going forward, HMRC will use the data it already holds to calculate how much tax is owed. Individuals with more complex affairs will still need to complete a Self-Assessment, however this will be a little simpler in future as HMRC will pre-populate the tax return with the information it already has.
HMRC will write to customers this month with a tax calculation; this could be a P800 or a simplified Self Assessment letter PA302. If customers believe the calculation is correct they can pay their bill online or by cheque. To use the online service, individuals will need to log in to the Personal Tax Account at the following link: https://www.gov.uk/personal-tax-account. Individuals who have not used this service before can register online with their NI number, and a recent payslip, passport or P60.
However, should individuals believe the information is incorrect they will have 60 days within which to contact HMRC to prevent any penalties being levied. And, if customers are unhappy with a follow-up response from HMRC they will have 30 days within which to appeal the decision.
Hopefully this new service will simplify the tax affairs further for some people whose taxes are already fairly straightforward, by removing the need for a full Self Assessment. Also, for those who must continue with Self Assessment, the pre-populating of information will help to speed up the process. As always though, it is vital to check the information HMRC holds, rather than to assume that it will be correct; we've seen plenty of examples when the information HMRC holds is wrong!
As always, if we can be of any assistance regarding the above, please do get in touch.
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