Whilst the tax office might be trying to get us all to go digital, it has decided to revert to paper for issuing new simple assessments. They will be hitting the doormat shortly.

We have previously mentioned that the tax office computer cannot currently cope with the complexity of the tax system in certain scenarios, thereby forcing people to file paper tax returns, but the tax office is now going one stage further and bringing back the pre-self-assessment regime of paper assessments.

From sometime later this month simple assessments will demand tax that cannot otherwise be collected through Pay As You Earn (PAYE), and without the taxpayer having to complete a return. If a return has been requested, that request will have to be withdrawn before the simple assessment is issued.

A simple assessment is most likely to be issued where the taxpayer is already subject to PAYE, but has a small amount of other taxable income or gains, or where tax underpaid cannot be coded out.

H M Revenue & Customs (HMRC) has up to four years from the end of the tax year to issue a simple assessment.

Appeals and payments

A taxpayer that receives a simple assessment will have up to 60 days to query it. HMRC may allow a longer period. In the absence of any contact from the taxpayer, once the assessment becomes binding the tax is payable, so it is important to make sure the assessment is correct.

The tax is payable on the normal due date of 31 January, so for the tax year ended 5 April 2017, the tax is payable by 31 January 2018. However, if a simple assessment is issued for the year to 5 April 2017 after 31 October 2017, the tax will not be payable until three months after the date of the assessment.

There are no payments on account to make under the simple assessment procedure.

With HMRC shelving its Making Tax Digital project for income tax until at least 2020, ongoing computation problems with its computer, and now the re-introduction of paper assessments, the tax system is anything but simple.

If you receive a simple assessment, or would like to talk to someone with regards to your personal tax affairs, please contact a member of our Personal Tax team.

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