What's Simple about Simple Assessment?

Simple Assessment - HMRC Major Review?

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Client, a PAYE employee amassed BIK underpayments 2016-17 & 2017-18 both individually less than £200 both appropriately coded and timeously calculated on P800’s.

2018-19 saw an in-year BIK underpayment of £2700. £2400 was coded 2019-20 the balance was coded 2020-21.

28 Feb 2020 client changed employment starting new employment 3 March 2020. On  4 March HMRC issued Simple Assessments 2016-17 & 2018-19 with demands for June payment. Client received new coding for 2020-21 removing underpayment but no revised coding for 2019-2020. Old employer issued M11 P45 with old code and new employer operated old code for M12. (We registered as new client on-line May 2020)

We advised HMRC the Simple Assessments were incorrect and as an aside client will be registering 2019-20 for Self-Assessment as rental income has commenced.  

HMRC response was that towards end of 2019-20 there was a major review of Simple Assessment; it threw up some anomalies and it has put in a best fit for majority of taxpayers and our clients u/p’s for the two years have been bought into Simple Assessment. They say they issued new 2019-20 code removing the u/p restriction meaning a refund should have been made but the change of employment prevented the code being used. HMRC suggested sooner we submit SA 2019-20 client can have refund. They suggest answering “no” to the question asking if any underpayment has been included in the code.

Needless to say, we will be replying to HMRC about their "computer reviews"; their views and their suggestions but has anyone else experienced retrospective Simple Assessments?

Replies (6)

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By Tim Vane
24th May 2020 12:35


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By richard thomas
24th May 2020 18:17

Oh dear!

Clearly the amount of the simple assessment for 2016-17 should be nil, but achieving this may be difficult. First you must query it under s 31AA TMA. You will then obviously point out that the tax has in fact been paid through the coding adjustment. If that does not work you can appeal under s 31 TMA (why the drafter put the querying rules after the appeal rules, when the appeal comes after the query I do not know. s 31AA should have been s 31ZA, but thai s by the by).

The trouble is that the adjustment that is to be made to reduce the amount of the simple assessment by the amount of the coded underpayment is made by reg 188 of the PAYE Regs and applies for the purposes of s 59BA TMA, the amount which is payable.

In two recent decisions the FTT has decided that reg 188 doe snot fall within the jurisdiction of the FTT. If that remains the case (and one of them, Hoey, is under appeal to the UT) then the remedy lies in Court proceedings for the debt created by the simple assessment.

As to 2018/19 the position seems to be that the underpayment coded out has been paid because no change to the code was implemented by either employer. This is hardly surpassing if the simple assessment were issued on 4 March.

HMRC is therefore asking you to lie on the return to say that no U/P was coded out. What possible advantage is to to anyone to repay the UP that has been paid and collect it again in a simple assessment. Well it is to you because, so long as you get repayment interest, you will have paid the tax later than you thought you were going to. They are therefore creating extra work and cost for you and the client and delaying the receipts to the Exchequer at a time when they need everything they can get. This is plainly maladministration and should be referred to the Adjudicator if you do not get the assessment withdrawn following a s 31AA query.

You should also get your professional bodies involved with this.

On a general point, HMRC have overlooked once against that the primary way of collecting a UP is by a code number. It's not a nice to have, but an obligation. Reg 14(1)(d) of the PAYE Regs says that in determining a code HMRC MUST have regard to a UP, unless it is otherwise recovered, ie by being included in a self-assessment and the coding out box not ticked or by voluntary payment.

Thanks (1)
By fawltybasil2575
26th May 2020 09:22

@Helpful Harry (OP).

This matter should be resolved with minimal fuss by your sending a letter to HMRC along the following lines (indicating “Formal Complaint” thereon):-

“I must respectfully request your immediately rectifying the problems created by your series of inappropriate actions as follows:-

(1) Your irrational decision to have recourse unnecessarily to Simple Assessments in a straightforward case such as this, which has been very satisfactorily attended to for several years by correct use of Coding adjustments; and should have continued to have been similarly attended to.

(2) Your issuing a 2019/20 Coding in March 2020 (purportedly on xx March 2020, albeit you will be aware that the vast majority of Coding Notices show issue dates many days before the date on which those Codings are sent to the Employer). Entirely predictably the result was its clearly not having been received by the employer in time for its being actioned in the March 2020 payroll of the new employer.

(3) Your improperly requesting my client to include a blatant and material untruth when submitting a formal Tax Return for 2019/20 (namely your advising him, on xx/xx/xxxx, to state that no Underpayment has been included on his Coding Notice).

The 2020/21 Coding Notice previously issued included a minor figure of £300 re the balance of the 2018/19 Underpayment. That Coding should have remained unchanged, whereas you elected to issue a new Coding (deleting that Underpayment) due solely to your irrational decision to complicate matters by issuing Simple Assessments.

Please rectify matters immediately by issuing a new 2020/21 Coding (reinstating the £300 previously included in the Coding issued on x/xx/xxxx) and cancelling the Simple Assessments issued on xx/xx/xxxx.

Regrettably, the time costs thus far incurred by myself
must be included in a claim for compensation under your redress policy; and I would ask you to deal with this case in accordance with my above request, in the interests of HMRC since, in the absence of such response, the compensation claim must be increased.

Please ensure that I receive your response within 10 days.


If the Simple Assessments are not withdrawn immediately by HMRC, then submit the appropriate formal appeal.

Frankly, for the amount at issue, I would arrange for the client to make payment to HMRC, re the 2018/19 Income Tax of £300, if the amended 2020/21 Coding is not received within 30 days (this effectively helps to "force HMRC’s hand”).

With respect to Mr. Thomas, I do not agree that your professional body should be notified of this relatively straightforward matter, nor consider that a report to the Adjudicator’s Office is likely to be necessary.


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By Helpful Harry
26th May 2020 20:22

Many thanks for the comprehensive responses. We will be contacting HMRC to point out the error of their ways.
We will keep this post updated with any developments but don't hold your breathe.
Do the words HMRC / Simple Assessment and "minimal fuss" ever occur in the same sentence?

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By Helpful Harry
31st Oct 2020 16:23

Finally this week, received a (sensible) response from HMRC; agreeing Simple Assessments were issued in error; agreeing liability has already been satisfied via PAYE and saying "....contrary to the previous advice..." we should not answer "no" on the 2019-20 Self Assessment. (See OP re tax underpayments).
HMRC said they have arranged for the Simple Assessment charges to be "remitted". (We will not challenge further but is "withdrawn" not the correct term?)
Proof that HMRC have taken the correct / incorrect action will be proved, when we submit the return. Thank you again to those that replied.

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Replying to Helpful Harry:
By richard thomas
01st Nov 2020 16:38

You are right - if a simple assessment is wrong then they withdraw it - s 28J TMA. What they are saying is that it still stands but we are writing off the tax, leaving themselves the option of unwriting it off in the future.

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