03 Nov Is self-assessment ending?
As you may have heard, the assessment known as ‘simple assessment’ has arrived and with it HMRC’s plan to cut the number of tax returns it issues. Some people are asking if this is the end of self-assessment…in short, no it isn’t. So, what is changing?
In no way is self-assessment ending. So, what is changing?
The new simple assessment, announced two years ago will for now just impact two groups and as a result won’t be required to complete self-assessment returns. They are;
- those starting state pensions who had income in excess of the personal allowance in 2016/17 (£11,000); and
- PAYE taxpayers who owe tax which can’t be collected through their tax code.
A third group will be added in 2018/19: state pensioners who complete a tax return because their pension is more than their personal allowance.
What the future holds?
SA302s are the thin end of the wedge. Over the next few years HMRC wants to move many more individuals out of self-assessment as part of Making Tax Digital.
Instead, it will make simple assessments based on information drawn from third parties, e.g. banks”