Newsletters
Autumn News
SA Or Not SA?
...that is the question. HMRC have removed many of their "customers" from the obligation to file annual tax returns in recent years, saving them the trouble of processing paperwork and the individuals the time involved in filling in forms - but that creates a big problem if the person should have been paying more tax all along.The trouble is that the responsibility for noticing that there's a liability falls squarely on the taxpayer. If HMRC send a letter saying "we don't think you need to fill in a tax return any more", who wouldn't joyfully dismiss their accountant and hope to live happily ever after? But those letters are not always reliable. Circumstances may change. For example, if you are a higher rate taxpayer and you receive even small amounts of bank interest or dividends, there will be some tax to pay in addition to the tax credited or paid before you see the income. On the other side, if that person makes Gift Aid donations, they may be able to claim some tax back, but only by filling in a tax return.
Unfortunately, if this goes on for several years, even a small amount of income can create a large liability and a major exercise in digging out all the old records in order to put the taxpayer straight with HMRC. There is an official policy to forgive tax where the taxpayer had provided information to HMRC and could reasonably expect that they had done whatever they wanted to do with it, but it's unlikely to apply to many situations under self-assessment.
If you don't fill in an annual return but you are a higher rate taxpayer, it may be worth checking that you don't have hidden liabilities. Better to deal with it early than late. We can advise you.