Glossary · UK
What is HMRC Simple Assessment?
A system where HMRC calculates a taxpayer's income tax liability using data it already holds -- from employment, pensions and bank interest -- and issues a PA302 tax calculation instead of requiring the individual to file a Self Assessment return.
Full Definition
Simple Assessment was introduced in 2017 to remove the burden of Self Assessment filing for people whose tax affairs are relatively straightforward but who cannot be fully reconciled through PAYE alone. HMRC uses data it already receives -- from employers via RTI, from pension providers, from the bank interest reporting regime, and from other sources -- to calculate the individual's income tax liability for the year. It then issues a PA302 Simple Assessment document (not a P800, which is an earlier informal notification) showing the income sources used, the tax already paid via PAYE, and the balance owed or overpaid. The individuals most likely to receive Simple Assessment include: PAYE employees with income above GBP 100,000 (Personal Allowance taper); pensioners receiving both a State Pension and one or more private pensions where the combined income exceeds the Personal Allowance; employees with small amounts of untaxed savings interest or investment income under GBP 2,500 where a Simple Assessment is more proportionate than a full return; and individuals who have recently stopped working and have untaxed income to account for. On receiving a PA302, the taxpayer should check the figures carefully against their P60, payslips, and pension statements -- HMRC's data is not always complete. If the calculation is correct, payment is due within 60 days of the issue date (or by 31 January following the tax year, whichever is later). If figures are wrong, the taxpayer can contact HMRC to request an amended calculation. Simple Assessment does not remove the need for Self Assessment in more complex cases: taxpayers with capital gains, self-employment income above GBP 1,000, foreign income, or high income child benefit charge exposure will still need to register for and file a Self Assessment return.