HMRC is set to send around 1.4 million letters over the coming months as part of its annual compliance exercise to recover unpaid income tax for the 2024/25 tax year.
The letters, known as Simple Assessments, are issued when HMRC identifies income that hasn’t been fully taxed through the Pay As You Earn (PAYE) system or Self Assessment. These assessments typically relate to income exceeding the individual’s personal allowance, where additional tax is owed.
Who will receive these letters?
The letters are being sent to individuals whose financial records suggest underpaid tax due to:
- Interest from savings or dividends
- Income from second jobs or freelance work
- Overclaimed tax-free allowances
- Pensions that were not fully taxed
HMRC uses data from employers, banks, building societies, financial institutions, and the Department for Work and Pensions (DWP) to determine whether extra tax is due.
Most letters are expected to be issued during July and August, in line with HMRC’s usual summer compliance schedule. However, additional letters may continue to be sent into the Autumn, depending on when new data becomes available.
What should taxpayers do?
If you receive a Simple Assessment letter, it’s important to review it carefully. You’ll have until 31 January 2026 to:
- Pay the full amount owed, or
- Agree a payment plan with HMRC
Payments can be made through GOV.UK, by bank transfer, or cheque.
If you believe your assessment is incorrect, you can:
- Query it within 60 days of receipt. If HMRC agrees, a revised notice will be issued.
- If the query is rejected, you still have the right to appeal online within 30 days.
Why is HMRC using Simple Assessments?
Simple Assessments are part of HMRC’s ongoing effort to reduce the administrative burden for taxpayers with relatively straightforward tax affairs. The system allows HMRC to collect unpaid tax without requiring a full Self Assessment return, streamlining the process for both individuals and the tax authority.
Don’t ignore the letter
While these notices are routine, HMRC stresses that failure to act could result in penalties, interest charges or even enforcement action.
Get in touch
If you’re unsure whether your notice is accurate or need help understanding your tax position, get in touch with a member of the tax team by emailing enquiries@pmm.co.uk.
