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Tax: Doesn't have to be taxing or does it?

11th Dec 2009
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The tax system is so complex that even at the basic level of PAYE most people believe that it is entirely the responsibility of their employer to get their tax right!

Employees generally don't understand the need for P11Ds and that anything entered on them is part of their income and potentially taxable.  Employees generally don't understand that any deductions on their PAYE Code are their responsibility to check and inform HMRC of changes as they go along.  HMRC have sometimes ignored P46 (Car) Forms when sent in and then a backlog of tax accrues.  If an employee checked their tax coding then they would avoid this problem, but they don't see it as their responsibility.  Finally, when employees have any income outside of PAYE, they generally don't understand that it is their responsibility to register for Self Assessment.  I have had several new clients who have't registered for Self Assessment when becoming buy-to-let owners, for instance.

By any stretch of the imagination, the Self Assessment system has failed, because most of the public just don't understand that Self means that the onus is on them to volunteer their tax information.  And when they get said Self Assessment tax form, their troubles really begin, because it is too complex for the average person to understand and then tax really does get taxing (on the brain).

Ray

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