We are sharing this update from ACCA, our professional body, for the interest of clients and contacts. The content is (c) ACCA
Guidance on simple assessment letters and ways of paying tax
Self-Serve Time to Pay has now been introduced to support taxpayers with Simple Assessment debts. The arrangements offer taxpayers the opportunity to set up a payment plan to pay off their debt by instalments if they have been unable to pay off the tax due by the payment deadline.
Simple Assessment letters – providing detailed calculations for any tax owed for income received between April 2024 and April 2025 – are being sent to taxpayers over the next few months.
While some taxpayers may receive a Simple Assessment year-on-year, most will have no previous knowledge of what a Simple Assessment is, how it’s calculated or why they have underpaid tax. You may therefore start to receive queries from clients who receive one of these letters.
HMRC is offering support to taxpayers who receive a Simple Assessment letter to know what to do, how to pay or to query the calculation.
The Simple Assessment letter details exactly what taxpayers need to do and includes information about:
- how much tax is owed
- when it needs to be paid (usually by the following 31 January)
- how to pay it, including what to do if they disagree with the assessment.
There are various ways for taxpayers to pay, including the HMRC app. Further information on paying a Simple Assessment tax bill can be found on GOV.UK.
Taxpayers can watch this video for further information and guidance:
A common reason for a Simple Assessment is to pay tax on State Pension. Taxpayers can use HMRC’s interactive tool check if you need to pay tax on your pension to see if this is likely to apply to them.
In these circumstances taxpayers can also watch the following videos:
- How increases to the State Pension can affect the tax you pay
- How you pay any tax due on your State Pension if it’s more than your Personal Allowance
Taxpayers who owe tax from bank, building society interest – or both – may receive two Simple Assessment letters in the same tax year.
When this happens the second letter will include the total tax figure owed for the year — including the amount that was set out on the first letter — even if the customer has paid that back to HMRC. If the taxpayer has already paid the first amount back, they will owe the amount set out in the second letter minus what they have already paid.