HMRC tax liability & no self-assessment required letter

hpuse

Received a letter about 2 years ago from Inland Revenue (now HMRC), saying they have studied my previous self-assessment returns and further advising that I do not need to make anymore self-assessment returns unless my employment or circumstances changes or annual salary goes about 80K.

So I stopped doing self-assessments online and the last one was done for 2003-04.

I continue being employed under the same employer and receive allowance and tax liable benefits for around £3000 per year (private health insurance, health club memberships and various other services via employer) and it all appears on the annual P11D form as well.

After reading the recent series of blunders committed by HMRC in the press I wonder if someone could advice me whether I'm doing something wrong here?
I'm sure I must not be the only one received such a letter and then on stopped doing self assessments in the last couple of years. Basically I want to be certain about this.
Usually, I used to consolidate P60's, P11s etc after the SA-online was introduced about 6 years ago and then make a one-off payment clearing dues for the previous year.
I do have my login credentials intact, but from 04-05, I have never bothered to enter the website.

SoozyJ22

I got one of those 'you don't need to fill in a tax return any more' letters a year or so back and quite a few of my colleagues have had the same.

Since my circumstances changed a little last year (our work pension scheme changed so we now pay into it after tax has been deducted) they sent me a form this year where I just had to enter my total pensions payments, charity donations, interest on savings accounts and something else and reckoned they'd sort everything out just from that - I've not heard anything back from them since I sent the form back though.

hpuse

Also just to add, there is nothing in the letter which says, if you currently receive taxable benefits from your employer you must make a Self Assessment return. This has been the case with me for the last 12 years.
Basically the letter gives the following impression when reading ...."look Mr XYZ, thanks for doing tax returns, but don't take pains and submit anymore SA's in the future as long as you remain in this employment and your circumstances remains same. If there is a change - please contact us.

Employer is doing their part by giving the P11D. Clearly I’m saving a bit of money for the last two years by going with the letter.

I do not want to contact HMRC re:this, there is already enough mess for them to sort out so let them voluntarily come to me and clarify the things. I will keep the letter safe in custody!

System

Prior to the change a couple of years ago everyone who fell into the 40% income tax bracket had to complete a full tax return but many of those only fell into that because of employment income and benefits in kind. These were thought of as straight forward as opposed to those who have self employment income, income from property, foreign income, capital gains etc.

So things were changed to cut down the number of returns issued to those with straight forward employment income. So now you only have to complete one if say your income goes above about £100,000 or you have to complete pages for any of the categories I mentioned above.

If you receive benefits in kind from your employer then HMRC should have put a deduction in your tax code to ensure tax was collected on those taxable benefits.

If your circumstances have changed and you aren't sure if you would be required to complete a return then ring HMRC and ask them.

HTH

hpuse

I now understand how they make it straight forward.

Still not able to figure out how the basic tax code is changed with respect to benefits given for a particular employee.

Is it employer’s duty to let Revenue know about the benefits they are giving to an employee, so when they issue a tax code they make it applicable for the rest of the year?

For the last two years, my tax code remains same but my benefit and tax liability has gone up. Clearly, something is missing ?

Thanks

Pam17 wrote: »

Prior to the change a couple of years ago everyone who fell into the 40% income tax bracket had to complete a full tax return but many of those only fell into that because of employment income and benefits in kind. These were thought of as straight forward as opposed to those who have self employment income, income from property, foreign income, capital gains etc.

So things were changed to cut down the number of returns issued to those with straight forward employment income. So now you only have to complete one if say your income goes above about £100,000 or you have to complete pages for any of the categories I mentioned above.

If you receive benefits in kind from your employer then HMRC should have put a deduction in your tax code to ensure tax was collected on those taxable benefits.

If your circumstances have changed and you aren't sure if you would be required to complete a return then ring HMRC and ask them.

HTH

Murdina

Yes - that is what the form P11D does; there are also requirements re cars. However you should still check notices of coding carefully.
Do not rush to be within self - assessment; instead be glad to be taken out. Self assessment is an onerous regime with lots of nasty pitfalls and penalties if you do things wrong and it is easy to get caught out. Under PAYE so long as you check your tax code and keep an eye on your income from savings (if you have any) so that is coded in too then you are unlikely to get any penalties or nasty surprises.