We told you about the new HMRC power to raise a “simple assessment” in our newsletter on 3 November 2016. HMRC has still not published guidance on how to deal with such assessments, but they will shortly issue the first simple assessments for 2016/17.
The recipients are likely to be pensioners who receive a state pension which is not covered by their personal allowance, and hence have a small tax liability. Normally the only way to assess this tax is to complete an SA tax return. Completing these returns are stressful for the taxpayer, and viewed unnecessary, as HMRC should already know the level of the individual’s state pension.
For 2016/17 HMRC has issued notices to file a tax return to pensioners in this position. However, in May 2017 HMRC will issue simple assessments to pensioners who have a tax liability in respect of their state pension, and who have no other income. HMRC will write to those taxpayers informing them that they do not have to submit an SA tax return for 2016/17 after all.
Our advice is to hold-off completing the SA tax returns for pensioners with simple tax affairs until the end of May, and if those clients could look out for further letters from HMRC.