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"Simplified Assessment" from HMRC

"Simplified Assessment". Spoiler. It's not simplified, it's simply wrong.

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Just wasted 50 minutes of my life

HMRC sent "Simplified Assessments" for a client for 2019/20 and 2020/21. Both wrong.

2019/20 used dividends reported for  2018/9 (£5k instead of £10k received) Tax understated
2020/21 used property income reported for 2019/20 (£8k instead of £5k) Tax overstated. Dividends were unchanged so 2020/21 dividend could be 2019/20 dividend.

HMRC 'helpline' said "because he is self-assessment these calculations are irrelevant"! The letter says "these replace any previous". Waste of my time checking client returns then 20 mins on the 'phone. But I was also told that if I get any others I will still have to contact HMRC as "there must be a problem withteh client's record".

Give me strength. Or an HMRC that makes fewer stupid mistakes.
 

Replies (6)

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By Open all hours
14th Sep 2021 13:09

There seems to be a clue in the language used. Anything described and ‘simple’ or ‘smart’ should be treated with great caution.

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By David Ex
14th Sep 2021 13:22

I suppose it’s the logical conclusion of the dumbing down of tax administration generally and HMRC specifically.

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By rmillaree
14th Sep 2021 13:57

Hello Donald MacKenzie

Its the nature of the beast unfortuantely - its almost easier to do sa returns and actively rather than go down the stearmlined route i must admit.

I will slightly defend hmrc to be controversial.

"2019/20 used dividends reported for 2018/9 (£5k instead of £10k received) Tax understated"
Well its up to you to advise them of the dividend income - you should expect they may have randomly wrong figure in if they are left to their own devices - its a digrace if you have ruing in correct figures and ended up with wrong figures i must admit.

2020/21 used property income reported for 2019/20 (£8k instead of £5k) Tax overstated.
Ditto as above

"HMRC 'helpline' said "because he is self-assessment these calculations are irrelevant"! The letter says "these replace any previous". Waste of my time checking client returns then 20 mins on the 'phone. But I was also told that if I get any others I will still have to contact HMRC as "there must be a problem withteh client's record"."

I may be wrong but i am guessing these amounts may have been in tax code so were probably known about in which case seeing the calc should not be a shock if client was taken out of sa.

Their systems are crapola - unfortuiantely though ball is in your court as to how you proceed based ontheir inconsistent crapness - i would make the decision to do sa or not and then poroceed from there and force hmrc to follow your lead - if you know you are doing sa i simply use these calcs as clue as to whether there may be other income - and i am always careful to ensure where figures arre replaced by sa they are cancelled as apporpriate. If its a situation were they are going into sa late - from may onwards ??? you should almost be defaulting to haviong this throway calc being randomly spat out by the system.

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Replying to rmillaree:
By SteveHa
14th Sep 2021 14:05

rmillaree wrote:

Their systems are crapola - unfortuiantely though ball is in your court as to how you proceed based ontheir inconsistent crapness ......

I think you meant consistent.

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
17th Sep 2021 16:02

It may not replicate the situation exactly, but your situation rang a bell with incorrect tax calculations sent to PAYE taxpayers on P800 forms.
https://www.accountingweb.co.uk/tax/personal-tax/hmrc-gets-p800-calculat...

I'm not one to offer tax advice, but it appears that the SA route may be the best way to expunge the errors.

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By More unearned luck
17th Sep 2021 18:51

Well, if HMRC are correct in that your client has either filed returns or is due to file returns for the years you mention then HMRC are also right in saying that the simple assessments are invalid, so it doesn't matter what's in them. Your conversation with HMRC should go something like this: You: My client's in SA for year x, HMRC: So he is. You, but he has received a simple assessment for that year.. HMRC: I'll cancel the simple assessment.

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