HMRC’s ‘Simple Assessments’ may not be as simple as they seem

What is the new system?

The Simple Assessment is a new system intended to streamline the process of completing Personal Tax Returns. Under the system, HMRC will effectively complete an individual’s Personal Tax Return and send it to them to check and sign off – eliminating the need for completing Personal Tax Returns in the future. HMRC is starting by sending 400,000 fully completed tax forms to individuals by Christmas.

However, some tax experts have responded to the Simple Assessment system expressing doubts. One person stated that as many as one out of 10 Simple Assessments could have errors based on his awareness of the accuracy of HMRC’s recordkeeping. Others doubt that HMRC has sufficient information to be able to correctly calculate a person’s tax liability or refund based on a Simple Assessment.

Whilst HMRC claims that millions will benefit from this system – which could very well be true – the bottom line is that there is a risk of errors. This could come back down on the individual who uses the system, as they may have to spend more time than before chasing HMRC about errors or dealing with backdated tax should HMRC realise down the line that it made errors.

Simplifying tax reporting is in taxpayers’ best interests, however it is well known that HMRC has a tendency to roll out new rules and programs quickly – which can result in confusion and errors.

Caroline Miskin, of the ICAEW, has claimed that problems would “likely arise in instances where individuals had been underpaid, were self-employed or had changed careers.”

However she also said that the Simple Assessment is not intended to totally replace Personal Tax Returns, and that checking tax figures should still be carried out whichever way they’re reported.

What should I do if I receive a Simple Assessment from HMRC but am unsure if the tax figures are correct?

This is where you may run into problems. The whole premise of having an accountant complete your Personal Tax Return or check your tax figures is so you can have peace of mind that everything is accurate.

As such, you may wish to have even your Simple Assessment checked over and confirmed by your accountant anyway, and that is completely within your right. Or, if you receive a Simple Assessment, you could still have your accountant complete your Personal Tax Return for you as normal.

An accountant such as Churchill Knight & Associates Ltd can complete all the administration and calculations, and submit your Personal Tax Return on your behalf so you do not have to worry about making errors or spending hours of your own valued time on the task.

If you have any questions on the Simple Assessment or wish to have your Personal Tax Return completed by a professional who can understand your business and answer all of your questions and concerns, contact us on 01707 871622.