HMRC Simple Assessment Letter 2026: PA302, PA101 and What To Do Next

Receiving a letter from HMRC can be unsettling -- particularly if you have never dealt with a tax calculation before. If the letter is headed "Simple Assessment" or contains a reference to a PA302 or PA101 form, this guide explains exactly what it means, why you received it, and what you need to do next.

What Is a Simple Assessment?

HMRC introduced Simple Assessment in 2017 as an alternative to Self Assessment for people with straightforward tax affairs. Rather than asking you to file a tax return and calculate your own tax, HMRC does the calculation for you using data it already holds from third parties -- employers, pension providers, banks, and the Department for Work and Pensions (DWP).

The assessment arrives in one of two formats:

• PA302: the standard Simple Assessment notice, which tells you that you owe tax and the amount due
• PA101: used where HMRC needs you to confirm or correct information before it can finalise the calculation

The notice shows HMRC's calculation of your income, the Personal Allowance deducted, the taxable income, and the tax due. It also shows any tax already paid (for example, through PAYE) and the net underpayment you need to settle.

Who Receives a Simple Assessment?

HMRC uses Simple Assessment for two main groups of taxpayers.

Group 1: State Pensioners with Other Income

The new full State Pension in 2026/27 is GBP 241.30 per week, which over a full year amounts to GBP 12,547.60. The Personal Allowance is GBP 12,570 -- so the State Pension alone falls just GBP 22.40 below the threshold.

Any additional income -- even a small occupational pension -- pushes total income above GBP 12,570 and creates a tax liability. Because the State Pension is paid without tax deducted, and because many pensioners have no employer to operate PAYE, HMRC uses Simple Assessment to collect this tax rather than asking pensioners to register for Self Assessment.

Group 2: Employees with PAYE Underpayments

If you are an employee who has underpaid income tax through PAYE -- for example, because you had two jobs simultaneously, or because your tax code was wrong -- HMRC may issue a Simple Assessment if the underpayment is less than GBP 3,000 and cannot be collected through a future tax code adjustment.

Underpayments above GBP 3,000, or those involving more complex income sources such as rental property, foreign income, or self-employment, are handled through Self Assessment instead.

How HMRC Calculates the Assessment: Margaret's Example

Margaret is a retired teacher aged 68. In 2025/26 she received:

• State Pension: GBP 12,547.60 per year (GBP 241.30 x 52)
• Occupational teacher's pension: GBP 1,200 per year

Her total income is GBP 13,747.60.

HMRC will send Margaret a PA302 showing this GBP 235.52 underpayment. She has until 31 January 2027 to pay it.

How to Check the Figures

Before paying, it is worth checking HMRC's figures carefully. Common errors include:

• State Pension amount: check your DWP State Pension award letter or your online Personal Tax Account
• Occupational pension: compare against your P60 (if your pension is taxed at source) or your pension provider's annual statement
• Bank interest: HMRC receives information from banks but may include interest you reinvested or that was credited in a different tax year
• Other income: check whether HMRC has included income you no longer receive, or missed an allowance such as Marriage Allowance

You can view the details underlying your Simple Assessment through your Personal Tax Account at gov.uk. Log in with your Government Gateway credentials to see the income sources HMRC has used.

How to Challenge a Simple Assessment

If you believe the figures are wrong, you have 60 days from the date of the notice to object. You can:

1. Call HMRC on 0300 200 3300 and explain the error verbally -- useful for straightforward corrections
2. Write to HMRC at the address on the notice, enclosing copies of the relevant evidence (P60, pension statement, bank statement)
3. Use your Personal Tax Account to update your income details online, which may trigger a revised calculation automatically

If you miss the 60-day window, you can still raise a dispute but the process becomes more formal. In some cases you may need to pay the assessed amount and then seek a refund if HMRC agrees the calculation was wrong. Do not simply ignore the notice -- unpaid Simple Assessments attract late payment penalties and interest.

How to Pay

Payment is due by 31 January following the end of the tax year (so 31 January 2027 for a 2025/26 assessment). If HMRC issues the notice less than 30 days before that deadline, you have 30 days from the notice date to pay.

Payment methods available:

• Online or telephone banking using HMRC's bank account details (sort code 08-32-10, account number 12001020, reference your UTR or NI number)
• Debit card payment through your Personal Tax Account or the HMRC app
• Cheque made payable to HM Revenue and Customs and posted to the address on the notice
• Direct Debit if you set one up in advance through your Personal Tax Account

Late payment interest accrues from 31 January at the HMRC late payment rate (currently 7.25% per annum). If the debt remains unpaid after 30 days, a 5% late payment penalty may also apply.

Simple Assessment vs Self Assessment: Key Differences

If you receive a Simple Assessment but believe you should be in Self Assessment -- for example, because you have rental income that HMRC has overlooked -- you can register for Self Assessment voluntarily and file a return instead. This gives you more control and the ability to claim allowable expenses.

Our income tax calculator lets you enter your total income from all sources -- State Pension, occupational pensions, employment income, and savings interest -- so you can verify HMRC's Simple Assessment figures and check whether the amount on your PA302 or PA101 notice is correct before you pay or object.