Self-assessment (sa)
SELF-ASSESSMENT (SA) Introduced 6th April 1996 (1996/1997 being the first year of assessment) and extended to include Corporation Tax for accounting periods ending on or after the 1st July 1999. Before the introduction of Self-Assessment, HMRC issued an assessment, per appropriate schedule, to the taxpayer. The responsibility for appeal against HMRC’s assessment rested with the taxpayer. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS Under Self-Assessment, the responsibility for completing and submitting an assessment transferred to the taxpayer together with the option to calculate their liability. Payment of the assessed liability is often remitted by the taxpayer in two equal instalments with a final balancing payment or refund dealt with when the return is submitted. The introduction of Self-Assessment also saw changes in the requirement for employers to provide year-end information to the employee. For 1996/97 and subsequent years, employers have been required to calculate and supply HMRC and employees with details of the cash value of all benefits-in-kind and expenses using the P11D. From 6th April 1996, a revised four-part form P45 was introduced. The additional part 1a is now supplied to the employee for retention and use in completing their Self-Assessment return. Timetable For Self-assessment new and revised year-end return deadlines were introduced: • a P60 to be provided to all employees in employment as at 5th April, by 31st May of the year following the end of the tax year, with penalties for failing to do so. From tax year 2010/11 it may be provided electronically. • a P11D to be returned to HMRC by 6th July, following the end of the tax year, and a copy to be given to the tax payer. • returns for occupational pension recipients in receipt of benefits-in-kind that are taxable were introduced for the 2007/8 tax year onwards to the same timetable as P11D returns, but with no corresponding notification for the pensioner although it is good practice to do so. The return is made by listing to HMRC containing all the recipients’ details, as P11Ds can only be submitted for employees Generally taxpayers whose tax liabilities are dealt with by PAYE will not be required to submit Self-assessment tax returns. For many there has been a requirement to do so, even though no tax liability accrues as a result of compiling and submitting a return. No printing, copying or reproduction permitted. HMRC has for many years been deselecting such taxpayers and assisted that process with thresholds for declaring and paying tax on investment income and dividends. In 2017 HMRC started to implement “Simple Self-assessment”, whereby a PAYE taxpayer can upload details of minor additional income to the personal tax account and have the liability dealt with in that manner. SELF-EMPLOYED STATUS The failure of engagers to correctly assess a person’s PAYE status has regularly proved to be a costly oversight for an engager. This often happens when the engager concentrates on
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