TaxPersonal TaxRevenue needs to recognise those without a voice

Revenue needs to recognise those without a voice

With the 30 September deadline for self-assessment forms now gone, deputy chairman of the ICAEW Tax Faculty, Mark Lee, takes a look at what the Inland Revenue really means by the term.

Have you ever considered what ‘self Assessment’ really means? And probably more importantly, what does the general public understand by this?

In the introduction to the self-assessment pages of the Inland Revenue’s comprehensive website, we are told: ‘Self-assessment is a clearer and more straightforward way of working out and paying tax.’

Given self-assessment was introduced four years ago, this is meaningless. If you think about it, self-assessment is a strange term to describe the obligation we each have to work out and pay tax. For a start, self-assessment really relates only to a disclosure of our income and capital gains each year.

As is plainly apparent, there is no obligation to self-assess tax liability, nor is there any obligation to work out or pay one’s tax via a ‘self-assessment’.

Indeed, there is a bold statement on the Revenue’s site: ”Don’t forget that you don’t have to work out your tax bill – the Inland Revenue will do that for you if you want’.

But the Inland Revenue will do this regardless of when the tax return is submitted to them. It will also send its calculation to the taxpayer if it differs from the net figures for tax liabilities on the return, or if the taxpayer has indicated that he does not want to compute his tax liability himself.

And, if experiences from previous years are anything to go by, the Revenue will always advise taxpayers of any (minor or otherwise) differences between the two calculations.

One of the funniest sections of the site claims: ‘Most self-assessment tax payers get an eight-page, easy-to-follow tax return.’

The key here is that most self-assessment taxpayers apparently have relatively straightforward tax affairs and the tax return is ‘easy-to-follow’. As tax advisers know, the forms are not necessarily easy to complete and the tax calculation is hardly easy to achieve. I think this shows why the Revenue is so keen for forms to be returned by the 30 September deadline.

The profession needs to recognise that the vast majority of taxpayers go unrepresented and the majority of the Revenue’s messages and advertising are aimed at these people.

But I have long believed that the self-assessment tax forms and guidance noteswould be a lot simpler if only they did not attempt to be all things to all people.

There should be separate returns and notes for those people who had noSchedule E income during the tax year.

Some change will occur next year to self-assessment returns. Let’s hope these will make it easier for both represented and unrepresented taxpayers to comply with their obligations.

Links

Inland Revenue website

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