Experts at one of the accountancy industry’s leading tax bodies have warned contractors, freelancers and other self-employed taxpayers about new ‘Simple Assessments’ issued by HMRC, suggesting they may not be as accurate as advertised.
So-called ‘Simple Assessments’ were introduced in 2016 to allow HMRC to determine tax rates for those with simple income tax or capital gains tax affairs when sufficient information was already known about the individual.
Would-be taxpayers are then issued a pre-calculated notice of tax due, negating the need to fill out a self-assessment.
Members of the Association of Chartered Certified Accountants (ACCA) have warned contractors, however, that the accuracy of such assessments is not guaranteed.
Chas Roy Chowdhury, ACCA’s head of tax, said that such assessments were only likely to be complete for taxpayers with one simple income.
He added: “It is not yet clear how accurate these notices will be for taxpayers who need to take deductions, secondary income sources or other factors, such as pensions or gift aid, into account.”
Though ACCA generally has welcomed such pre-calculations as a “welcome step forward” for improving the ease of use of the UK’s tax system, it recommends taxpayers double check any data inputted by HMRC.
“Once the Simple Assessment is received, taxpayers have just 60 days to raise a query and provide evidence for the figures to be amended,” Roy-Chowdhury added.
“I strongly recommend that anyone receiving a Simple Assessment notice engages early.”