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Taxation: Self-assessment

Answer

Following a review of self-assessment in April 2004 HM Revenue and Customs (HMRC) introduced revised criteria for completion of self-assessment tax returns. As a result, many customers with straightforward tax affairs were no longer required to complete an annual tax return. The number of individuals who have automatically been taken out of self-assessment is provided in the following table.

	Number of individuals taken out of self-assessment
2005-06	285,584
2006-07	214,667
2007-08	190,453
2008-09	196,017

Manual processing is required where a self-assessment main tax return is filed on paper. Returns filed electronically do not require manual processing and short tax returns filed on paper are subject to automated data capture.A self-assessment tax return can be regarded as incomplete for a number of reasons, for example: no signature or missing supplementary pages. HMRC will send these back to the taxpayer for completion. HMRC will correct obvious errors made by the taxpayer; for example:"Where the taxpayer transposes figures;""Puts a decimal point in the wrong place;""Makes arithmetical errors; or""Incorrectly records national insurance benefits."Information on the number of incomplete or incorrect returns is available only at disproportionate cost, as the data are not centrally held by HMRC's systems.Based on the sampling undertaken as part of the Department's monthly quality monitoring exercise, the five most common errors made by individuals completing self-assessment forms were:In 2005-06 failing to:"1. declare the correct amount of national insurance benefits on the return;""2. complete all the relevant boxes on the trust page;""3. include the amount of underpayment from an earlier year included in the PAYE code for a later year;""4. claim fixed rate expenses; and""5. include details of in-year repayments already received."In 2006-07 failing to:"1. declare the correct amount of national insurance benefits on the return;""2. complete all the relevant boxes on the trust page;""3. include the amount of underpayment from an earlier year included in the PAYE code for a later year;""4. correctly complete boxes on the return; and""5. include details of in year repayments already received."In 2007/08 failing to:"1. declare the correct amount of national insurance benefits on the return;""2. include the amount of underpayment from an earlier year included in the PAYE code for the return year;""3. claim fixed rate expenses;""4. include details of in year repayments already received; and""5. include the amount of underpayment from an earlier year included in the PAYE code for a later year."In 2008-09 failing to:"1. declare the correct amount of national insurance benefits on the return;""2. include the amount of underpayment from an earlier year included in the PAYE code for the return year;""3. include the amount of underpayment from an earlier year included in the PAYE code for a later year;""4. claim fixed rate expenses; and""5. complete the tax paid on pension income on the SA return."

Secondary information

Type

Written question

Reference

505 c107-8W; 312332

Session

2009-10

Subjects

Self-assessment

Contains statistics

Yes

Link

View this Written question on www.publications.parliament.uk