What is HMRC Simple Assessment and who gets it?

Full answer

Simple Assessment was introduced in 2017 to remove the need for some taxpayers to file a full Self Assessment tax return. Instead of the taxpayer calculating their own liability, HMRC uses the information it already holds (from pension providers, employers, DWP) to calculate the tax due and issue a notice. Who receives Simple Assessment? HMRC typically issues Simple Assessment to: -- State Pension recipients whose total income (State Pension + other income) exceeds the Personal Allowance of GBP 12,570, particularly where the excess income has not been taxed through PAYE -- People with income from savings interest or other sources that HMRC already knows about but that cannot be collected through tax codes -- Employees or pensioners with relatively straightforward tax affairs where HMRC has all necessary data Simple Assessment is not issued to people who have income from self-employment, rental income, foreign income, or other complex sources that require a full SA return. What do you receive? PA302 is a "Simple Assessment" notice showing the income HMRC thinks you had, the tax already deducted (if any), and the tax remaining to pay. PA101 is a repayment notice if HMRC owes you money. How to pay The balance of tax due must be paid by 31 January following the end of the tax year (the same deadline as Self Assessment). You can pay online via the Government Gateway, by bank transfer (using your Unique Taxpayer Reference), or by cheque. Challenging the calculation If you believe the HMRC calculation is wrong (e.g., wrong income figures, missing reliefs), you can query it online or by phone within 60 days of receiving the notice. HMRC will then review and, if appropriate, issue a revised notice. If you need to declare additional income not shown on the notice, you may need to register for Self Assessment. State Pension and Simple Assessment The State Pension is paid gross (without tax deduction) by the DWP. If your State Pension alone exceeds the Personal Allowance, or your State Pension plus other income does so, HMRC may be unable to collect all the tax through your PAYE code (the code cannot go below zero). In that case, Simple Assessment is used to collect the shortfall.

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