UK tax

So simple!

It is interesting to reflect on the use of words, particularly adjectives, and how the usage has changed.

In many contexts, simple is used in a derogatory way, to describe something that lacks intelligence or sophistication. Alternatively, simple is used to describe an idea as elegant, stripped of unnecessary baggage.

This week, we reported the publication of a policy paper by HMRC entitled “Simple Assessment – ending the tax return”. https://www.gov.uk/government/publications/issue-briefing-simple-assessment-ending-the-tax-return/simple-assessment-ending-the-tax-return.

This rather wide-ranging announcement seems at first glance to be Making Tax Digital in another guise. HMRC are declaring that for certain groups of taxpayers, in fact two groups, they can now gather the required data to assess their tax position without a requirement for the affected taxpayers to complete a tax return.

The two groups mentioned are:

  • new state pensionerswith income more than the personal tax allowance in the tax year 2016-17
  • PAYE customers, who have underpaid taxand who cannot have that tax collected through their tax code

HMRC declare:

All existing state pensioners, who receive state pension over their personal allowance, who have received a notice to file a Self-Assessment for the tax year 2016 to 2017 should complete their return as usual. They will be taken out of Self-Assessment for the next tax year, 2017 to 2018, and will receive a Simple Assessment notification instead.

The temptation to lower the tone of this announcement by invoking “Simple Simon says…” is compelling. Interesting that HMRC state the already obvious by turning it into a new idea:

Simple Assessment is a new way of collecting tax which will make life easier for millions of customers who have had to do Self-Assessment tax returns in the past.

It is not clear if HMRC’s ability to gather the required information for these groups is a new or existing facility, what we can reasonably speculate is that it will be far from simple.

Editor’s note:

This article was written by me for Informanagement as is reproduced with their permission.

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