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Self-assessment and government is changing, but does everybody know?

Self-assessment for income tax has a finite life. People who have to fill in tax returns, such as freelancers, company directors, shareholders and a great many other people you probably know if you aren’t one of them, have 12 hours after this article goes live to file their returns online and part with thousands of pounds.

Many people face an annual panic about this; it’s like the inverse of Christmas, the date is fixed, everyone knows it’s coming and a per centage of us spend 50 weeks in denial about it and leave it all until the last minute. The government’s wish to make it more straightforward will be welcomed by many.

The idea is to integrate accounting packages together so that instead of an annual scramble, you have an incentive to fill in your details and keep things up to date as you go, so rather than the authorities getting a once-a-year look at your liabilities, the whole thing becomes more dynamic and up to date. People who already keep records accurately and assiduously can only benefit.

A related move is the government’s decision to scrap the Government Gateway, which at the moment allows different elements of government business to be conducted through different log-ons. It was a great system when it was introduced but it should be possible to do better in an always-connected society.

Self-assessment ignorance is a problem

That’s as long as everybody understands exactly what’s going on, and this is where the government has given itself a headache. As a jobbing journalist I’m on a number of groups for other writers and over the last fortnight they have been full of individuals saying “am I the last to hear about this?” when it comes to self-assessment.

Put frankly, the message hasn’t got through to everyone yet. Given the focus on getting this year’s tax returns out of the way, that’s probably fine; since many of the people involved will be using accountants to navigate the system for them it probably doesn’t matter exactly how it operates as long as their representative gets it right.

For a substantial chunk, though, anything other than the current self-assessment model is going to be a shock. HMRC may well be making the system better and easier for them to navigate, but it needs to sharpen its communications so that everybody knows about it. Tax is essential to pay for government services we take for granted; it’s never all that pleasant paying it, but it shouldn’t be a massive surprise when the system changes.