Self Assessment Farce
Self Assessment Farce
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Discussion

russ_a

Original Poster:

4,725 posts

241 months

Sunday 9th February 2014
quotequote all
Like many I have been requested to complete a self assessment return due to the Child Benefit restrictions that have now come into force.

I'm PAYE so had never used the HMRC site before and proceeded to try and register. Twenty minutes later I had a User Id but was surprised to find I could not complete the self assessment as the service was not available.

Found the link to activate the self assessment service but was asked for another Id (UTR). Couple of contractors next to me advised a UTR may be posted after registering so I waited a couple of weeks.

Nothing arrived so I logged onto the site again and found a somewhat hidden link to request access to the self assessment service. Completed the form clicked submit and was told I would receive a UTR in the post in 6 to 8 weeks!!

Fast forward 4 weeks and I now finally received my UTR. The letter actually calls the UTR 'Our Reference' but has a paragraph below stating that 'Our Reference' is actually the code I need. So I logged on to the site entered my UTR or 'Our Reference' and have been informed I now need to wait another 7 days for an activation code!!

What a load of bks!


Eric Mc

125,784 posts

295 months

Sunday 9th February 2014
quotequote all
Why didn't you do it in June?

For security reasons it does take time to get all the codes and references sorted. Once you are through this process, the system isn't too bad.

My view is that, if a person is a higher rate taxpayer then they should be completing self assessment anyway as it is highly likely that their tax affairs are not 100% correct UNLESS they ONLY have PAYE income and they are 100% satisfied that the PAYE is being administered correctly (which it often isn't).

sumo69

2,164 posts

250 months

Sunday 9th February 2014
quotequote all
russ_a said:
Like many I have been requested to complete a self assessment return due to the Child Benefit restrictions that have now come into force.

I'm PAYE so had never used the HMRC site before and proceeded to try and register. Twenty minutes later I had a User Id but was surprised to find I could not complete the self assessment as the service was not available.

Found the link to activate the self assessment service but was asked for another Id (UTR). Couple of contractors next to me advised a UTR may be posted after registering so I waited a couple of weeks.

Nothing arrived so I logged onto the site again and found a somewhat hidden link to request access to the self assessment service. Completed the form clicked submit and was told I would receive a UTR in the post in 6 to 8 weeks!!

Fast forward 4 weeks and I now finally received my UTR. The letter actually calls the UTR 'Our Reference' but has a paragraph below stating that 'Our Reference' is actually the code I need. So I logged on to the site entered my UTR or 'Our Reference' and have been informed I now need to wait another 7 days for an activation code!!

What a load of bks!
To add to your angst, you will also have a £100 penalty to add to your bill!!

David

russ_a

Original Poster:

4,725 posts

241 months

Sunday 9th February 2014
quotequote all
Pure laziness Eric!

No £100 fine as the last letter received said I had another 3 months from the date of the letter.

oyster

13,785 posts

278 months

Monday 10th February 2014
quotequote all
Eric Mc said:
Why didn't you do it in June?

For security reasons it does take time to get all the codes and references sorted. Once you are through this process, the system isn't too bad.

My view is that, if a person is a higher rate taxpayer then they should be completing self assessment anyway as it is highly likely that their tax affairs are not 100% correct UNLESS they ONLY have PAYE income and they are 100% satisfied that the PAYE is being administered correctly (which it often isn't).
Agree.

Why on earth isn't it compulsory for all higher rate taxpayers to fill in a self assessment? With all the talk of tax evasion/avoidance, quite how the government leaves this massive loophole open is incredible.



OP - I really hope you have never, EVER received a penny of bank interest, share dividends or property income whilst you have not been doing a self assessment....?

eliot

11,998 posts

284 months

Monday 10th February 2014
quotequote all
or just stop claiming child benefit - then you dont need to complete a s/a

Eric Mc

125,784 posts

295 months

Monday 10th February 2014
quotequote all
If you are just over the £50,000, then you will keep most of the benefit - so it would be stupid to give it up.

Self Assessment is not that big a deal - IF you do it early enough.

numtumfutunch

5,176 posts

168 months

Monday 10th February 2014
quotequote all

My experience was a lot different

Being disorganised I looked at HMRC website in the last week of January and to my horror realised I needed an activation code through the post

I registered and got my code in 3 working days

The rest was equally simple




NPI

1,310 posts

154 months

Monday 10th February 2014
quotequote all
russ_a said:
No £100 fine as the last letter received said I had another 3 months from the date of the letter.
That's interesting - many people would have been caught like you and I was wondering how they were going to stop mass complaints.


numtumfutunch said:
My experience was a lot different

Being disorganised I looked at HMRC website in the last week of January and to my horror realised I needed an activation code through the post

I registered and got my code in 3 working days
You must have previously registered and been sent your UTR.

I was the same - registered years ago but never used the system, always filled out the paper form (my tax affairs are very simple). This year they told me to do it online so I got a bit of a fright when I sat doen to do it and found I needed the activation code.

sidicks

25,218 posts

251 months

Tuesday 11th February 2014
quotequote all
oyster said:
Why on earth isn't it compulsory for all higher rate taxpayers to fill in a self assessment? With all the talk of tax evasion/avoidance, quite how the government leaves this massive loophole open is incredible.
Surely it effectively is compulsory. It is YOUR responsibility to pay the right tax. For higher rate taxpayers that inevitably means that extra tax is due (on savings interest).

NPI

1,310 posts

154 months

Tuesday 11th February 2014
quotequote all
sidicks said:
Surely it effectively is compulsory. It is YOUR responsibility to pay the right tax. For higher rate taxpayers that inevitably means that extra tax is due (on savings interest).
The only thing on mine is private medical cover is always a bit higher than in my tax code as that's based on the previous year's premium. Had to pay £50 this year.

All investments are owned by my wife, who doesn't work.

russ_a

Original Poster:

4,725 posts

241 months

Tuesday 11th February 2014
quotequote all
I did start the process back in December it's now Feb and I'm still waiting for the next activation code.

HMRC state on their website if the codes are not received in time there is no fine:

http://www.hmrc.gov.uk/online/excuse-missed-deadli...








onomatopoeia

3,526 posts

247 months

Tuesday 11th February 2014
quotequote all
sidicks said:
Surely it effectively is compulsory. It is YOUR responsibility to pay the right tax. For higher rate taxpayers that inevitably means that extra tax is due (on savings interest).
My savings account has 85p in it. It earned no interest last year.

The rest of the money is in two ISAs (one of each type) and a tax exempt NSI account. My PAYE is accurate (easy job to check armed with the P60 and I've done that the last few years after spending a while with the wrong tax code) and I do not fill in a tax return.

While a higher rate taxpayer, I certainly do not earn enough to use my entire ISA allowance.

Eric Mc

125,784 posts

295 months

Wednesday 12th February 2014
quotequote all
NPI said:
The only thing on mine is private medical cover is always a bit higher than in my tax code as that's based on the previous year's premium. Had to pay £50 this year.

All investments are owned by my wife, who doesn't work.
What about tax relief claims?

If you donate to charities using gift aid or deeds of covenant or if you pay into a personal pension , you may be missing out on additional Higher Rate tax relief.
You can circumvent Self Assessment and make these claims in other ways, but I still think doing an SA tax return is actually a good idea and a useful way of a taxpayer carrying out an annual "health check" on their tax affairs.

It also puts the taxpayer in charge of their own tax affairs rather than assuming that everybody else (employers, pension providers, banks, the HMRC etc) are doing their tax work correctly. They don't always - especially when dealing with higher rate taxpayers.

Upthejunction

108 posts

156 months

Wednesday 12th February 2014
quotequote all
sidicks said:
oyster said:
Why on earth isn't it compulsory for all higher rate taxpayers to fill in a self assessment? With all the talk of tax evasion/avoidance, quite how the government leaves this massive loophole open is incredible.
Surely it effectively is compulsory. It is YOUR responsibility to pay the right tax. For higher rate taxpayers that inevitably means that extra tax is due (on savings interest).
Really?

With interest rates as they are, most people ( if they have savings) are either using tax efficient savings methods or paying off capital / offset on properties.

Eric Mc

125,784 posts

295 months

Wednesday 12th February 2014
quotequote all
Upthejunction said:
Really?

With interest rates as they are, most people ( if they have savings) are either using tax efficient savings methods or paying off capital / offset on properties.
Not at all. Lots of people have sizeable amounts in "normal" savings accounts for all sorts of reasons.

Some because they are lazy and don't try to be tax efficient.

Others because they don't want their cash tied up and inaccessible for large parts of the year - for genuine reasons usually.

Also, lots of people have money in stocks and shares which are subject to extra tax if the individual is a Higher Rate taxpayer. The additional tax due on those dividends MUST be accounted for under the SA system.

I know that there are ISA based products that can be used as a "wrapper" for stocks and share investments but not that many people make use of them as they can be quite restrictive.

In addition to the Higher Rate taxpayers, increasingly we are seeing people with complex work arrangements - people who are working two or three part time employments, or a combination of part time employment and some self employment, or all of the above plus a state or work related pension.

People in these situations (I have quite a few on my books) may have complex and messy tax affairs without even being in the Higher Rate tax brackets. And invariably, the PAYE system struggles to keep tabs on a person in this type of situation.

Self Assessment is by far the best method around for a person like that to keep on top of things and NOT overpay or underpay tax.

I was listening to the radio yesterday and a Chartered Accountant said that 43% of all people who pay tax under the PAYE system pay the wrong tax.

oyster

13,785 posts

278 months

Wednesday 12th February 2014
quotequote all
Upthejunction said:
sidicks said:
oyster said:
Why on earth isn't it compulsory for all higher rate taxpayers to fill in a self assessment? With all the talk of tax evasion/avoidance, quite how the government leaves this massive loophole open is incredible.
Surely it effectively is compulsory. It is YOUR responsibility to pay the right tax. For higher rate taxpayers that inevitably means that extra tax is due (on savings interest).
Really?

With interest rates as they are, most people ( if they have savings) are either using tax efficient savings methods or paying off capital / offset on properties.
With interest rates at super low levels and the FTSE paying 3%+ gross, why would anyone be paying off debt.

My concern is how many of those higher rate taxpayers are paying 32.5% on dividends versus 10%.

Upthejunction

108 posts

156 months

Thursday 13th February 2014
quotequote all
oyster said:
Upthejunction said:
sidicks said:
oyster said:
Why on earth isn't it compulsory for all higher rate taxpayers to fill in a self assessment? With all the talk of tax evasion/avoidance, quite how the government leaves this massive loophole open is incredible.
Surely it effectively is compulsory. It is YOUR responsibility to pay the right tax. For higher rate taxpayers that inevitably means that extra tax is due (on savings interest).
Really?

With interest rates as they are, most people ( if they have savings) are either using tax efficient savings methods or paying off capital / offset on properties.
With interest rates at super low levels and the FTSE paying 3%+ gross, why would anyone be paying off debt.

My concern is how many of those higher rate taxpayers are paying 32.5% on dividends versus 10%.
Because most house owners will gross more than 3% paying down or offsetting their mortgage

NPI

1,310 posts

154 months

Thursday 13th February 2014
quotequote all
Eric Mc said:
NPI said:
The only thing on mine is private medical cover is always a bit higher than in my tax code as that's based on the previous year's premium. Had to pay £50 this year.

All investments are owned by my wife, who doesn't work.
What about tax relief claims?

If you donate to charities using gift aid or deeds of covenant or if you pay into a personal pension , you may be missing out on additional Higher Rate tax relief.
They're good points but I don't normally give to charity and have a non-contributory pension scheme.

Eric Mc

125,784 posts

295 months

Thursday 13th February 2014
quotequote all
NPI said:
They're good points but I don't normally give to charity and have a non-contributory pension scheme.
I wasn't referring to your circumstances specifically. There are lots of people who give to charity and there are lots of people paying into pension schemes. There are lots of people who pay Higher Rate Tax and there are lots of people paying too much or too little tax. There are lots of people with multiple sources of income.

Therefore, there are lots of people who would benefit from biting the bullet and signing up for Self Assessment.