Simple assessment, not so simple payment

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Taxpayers who receive simple assessments have the choice of two payment methods, both of which create issues for certain taxpayers and problems for their tax agents.

Simple approach

The simple assessment is a tax assessment made by HMRC, rather than a self-assessment made by the taxpayer as I explained in simple assessments are coming. It is printed on a form PA302.

HMRC expect to issue 400,000 simple assessments for 2016/17 by the end of this month, so some of your clients may well receive one. If they do, you should also receive a copy as their tax agent.

Taxpayers who are already in self-assessment should not receive a simple assessment, unless HMRC has erroneously set up a duplicate record for that person. The individuals who may receive simple assessments for 2016/17 should be restricted to:

  • Those taxed only under PAYE, who owe tax which can’t be collect through PAYE
  • Pensioners who started to draw their state retirement pension in 2016/17, which is their only source of income, and it exceeds their personal allowance (this can happen!).

Ways to pay

Taxpayers who have received a simple assessment for 2016/17 generally need to pay the amount due by 31 January 2018 (see payment date). However, there are only two ways to pay:

  • Online through the taxpayer’s personal tax account
  • By a cheque sent through the post to HMRC.

The personal tax account can’t be accessed by the taxpayer’s tax agent, so the taxpayer needs to access their account, and jump through the identification hoops via the government gateway do so.

Once they have accessed their personal tax account the taxpayer can pay the amount due using a debit card. The advice on gov.uk says the taxpayer can pay using a credit card linked to a business bank account, but that is not a good idea as it may create a benefit in kind, as I outlined in how to pay tax.

Cheque in the post

The alternative to using a debit card is to send a cheque in the post to: HMRC, Direct, BX5 5BD.

The simple assessment is not issued with a payslip, so the taxpayer must write the reference number from the PA302 on the back of their cheque. This is a number unique to that assessment, and is not the taxpayer’s UTR number or their NINO.

HMRC will not issue payslips for simple assessments, even when asked to.

LITRG advise the taxpayer to staple a covering letter to the cheque explaining what the payment is for, but I’m not sure that will work as letters are routinely separated from cheques on receipt at HMRC, and filed in different places.

Not PAYE

The simple assessment is only issued where the tax due can’t be collected through PAYE, so it is not possible to have the amount due coded out, even if the taxpayer’s circumstances have changed so there is sufficient PAYE income available to support the deduction.

Payment date

Where the simple assessment for 2016/17 was issued after 24 October 2017, the due date for the tax payable is three months and seven days from the date of the assessment. This deadline may not be obvious from the face of the PA302.

If the taxpayer doesn’t have the money to pay the simple assessment debt in one go, they can ask HMRC for a time to pay arrangement, by calling 0300 200 3835. You can help negotiate this deal for your client. HMRC is not currently charging interest or late payment penalties on simple assessment debts.

Appeal or query

There are two ways to challenge the figures shown on the simple assessment – by raising a query with HMRC within 60 days of the date of issue, and if that doesn’t resolve the matter, by a formal appeal.

The query mechanism is quite informal and can be done by way of a letter, phone call, or even by web chat. The formal appeal period starts on the day HMRC make a decision on the query and runs for 30 days.

The taxpayer, or their tax agent, can request that the taxpayer’s case is transferred into self-assessment and out of simple assessment for future periods.

About Rebecca Cave

Consulting tax editor for Accountingweb.co.uk. I also co-author several annual tax books for Bloomsbury Professional and write newsletters for other publishers.

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18th Jan 2018 18:33

The usual load of utter drivel from HMRC, making things as difficult as possible.

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19th Jan 2018 07:08

Surely the cheque should also be written by quill pen and delivered by horse !

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to gerrysims
19th Jan 2018 08:30

And don't forget the wax seal on the envelope.

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19th Jan 2018 09:11

knowing the revenue, they are probably spending millions on a system that accepts bitcoin.

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By CazzyT
19th Jan 2018 13:30

We have received a number for clients who are in self assessment - another frustrating waste of time!

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to CazzyT
22nd Jan 2018 13:58

Yep we did as well. Not only that we received prior to the 60 day appeal notice. (The 60 days expired before the 31st jan when return is due) It will be interesting to see if they hand out penalties for submitting a correct return and not appealing the SA.
This shows what is the matter with MTD.

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22nd Jan 2018 09:34

Payslips (or lack thereof!) seem to be a recurring issue this year. We know HMRC want us all to use online banking so that they can sack more people, but a lot of folks can't or won't do internet or phone banking.

We can't use credit cards, we can't go to the Post Office, we can't go to the bank in many towns as they have closed down. Corporation Tax & VAT can't be paid by a cheque in the post.

This should be the easy bit!

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to Vaughan Blake1
22nd Jan 2018 10:07

I think they're probably rubbing their hands together, waiting for the raft of late payment charges that will be coming their way. Its all part of a cunning plan...

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to monksview
22nd Jan 2018 10:29

monksview wrote:

I think they're probably rubbing their hands together, waiting for the raft of late payment charges that will be coming their way. Its all part of a cunning plan...

Plus the fact that quite a few statements are just stating the 2016/17 balancing payment and still missing out the 1st 2017/18 POA!

HMRC say that they are aware of this issue but are not making it public at the moment...

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to Vaughan Blake1
22nd Jan 2018 10:27

Vaughan Blake1 wrote:

Payslips (or lack thereof!) seem to be a recurring issue this year. We know HMRC want us all to use online banking so that they can sack more people, but a lot of folks can't or won't do internet or phone banking.

We can't use credit cards, we can't go to the Post Office, we can't go to the bank in many towns as they have closed down. Corporation Tax & VAT can't be paid by a cheque in the post.

This should be the easy bit!

..so we get to waste more of the little time we have in January printing payslips for client who ring up and say they need one please!

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22nd Jan 2018 10:23

Talk about complicating taxpayer's life! Include a damn payslip and this should sort everything out!

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22nd Jan 2018 10:24

Talk about complicating taxpayer's life! Include a damn payslip and this should sort everything out!

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22nd Jan 2018 11:05

Nah - if they can't easily pay, HMRC eventually sends a man around.

Creates jobs, see? And no shareholders to worry about whether it's cost-effective, or not.

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By semoore
22nd Jan 2018 11:35

My son was issued a simple assessment and told to pay £1,100 by 31 January. This is money he does not have, he had thought all his tax had been paid via PAYE but when he changed jobs during the year the new employer did not use the P45 and so he had his personal allowance twice. The simple assessment was issued in a month when he was between jobs again (he is a research fellow and most posts only last for 12 months) so HMRC assumed there was no employment income against which to collect the tax. He has had to go into self assessment in order to get the tax collected via his NOC, apparently this is the only way to "cancel" the simple assessment. Even so it has taken several telephone calls to HMRC to get to this stage. Initially HMRC said he could not go into self assessment! If my son had to pay for my professional time to sort this out it may have been less demanding on his budget to pay the tax in a lump sum!

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By 4b4
22nd Jan 2018 13:01

Oh, doesn't it make you look forward to the implementation of MTD!

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22nd Jan 2018 16:47

If HMRC were to allow straightforward bank transfer vua provision of a ( their) generated ref number and citing of course the correct HMRC account number and
their ( HMRC) appropriate " company name " designatin then surely this would offer a universally acceptable option with a recorded transaction receiot pathway

They did this on LDF settlements and it worked!.

Too simple ?

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23rd Jan 2018 08:37

So as we move to a fully digital world one of only two HMRC payment methods is send a cheque in the post!

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23rd Jan 2018 09:11

OK. A State pension that exceeds the personal allowance.

Info please!!!

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05th Feb 2018 11:05

Why does HMRC persist in making things difficult for people who have probably never heard of their personal tax account and wouldn't know how to access it anyway. Many of the people affected by simple assessment will be pensioners who are inclined to believe HMRC is correct whether they are or not. To date I have had a 'simple' assessment showing a refund of over £350 which was not due as the 2015-16 figures were used again for 2016-17 with a credit for tax deducted on interest and a grossed up dividends figure. Very bright!
How hard would it be to enclose a payslip as well. They might actually get paid that way.

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14th Feb 2018 10:33

Have phoned HMRC this morning re an arrangement to pay on a client who finds the payment options limited. In the last week HMRC have seen sense and are now accepting payments by direct debit.
I phoned HMRC on the normal number, you then have to ask to be transferred to the payment support team (no direct line number). If you are the client you can set up the direct debit there and then, alternatively the payment support team will phone your client to set up the direct debit.

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14th Feb 2018 12:42

OK sit back and enjoy.
Received today P800 for client for 6/4/2017 to 5/4/2018 showing PAYE income 6494 (client is still working) and taxed savings income 4762 tax 952.43. A refund of £952.43 will follow.
There is some blurb at the bottom which basically says they will check again at the end of the tax year and will adjust accordingly. I presume after they have refunded.
You can't make this stuff up.

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