⚠️ Please note: we are currently working on updating our tax guidance for 2020/21
across the LITRG website
What is Simple Assessment?
This page looks at what Simple Assessment is. Simple Assessment is a method of assessing income tax due in simple cases where a taxpayer had not paid enough tax on their income during the tax year.
What is Simple Assessment?
Individuals in Simple Assessment do not have to submit a tax return to pay tax on the taxable part of their income. Instead, HMRC send the individual a calculation of tax owed for the tax year (PA302). This should also be available to view in the taxpayer’s Personal Tax Account.
HMRC base the Simple Assessment on information that the Department for Work and Pensions (DWP) and other organisations provide to them. It is therefore important to check the figures on the Simple Assessment calculation carefully.
Can I appeal against a Simple Assessment?
If you disagree with the Simple Assessment, you have an initial appeal period of 60 days from the date of the Simple Assessment.
If you do not object to the Simple Assessment within 60 days of it being issued, it is automatically finalised.
When is tax due under a Simple Assessment?
Tax payable under a Simple Assessment is due on 31 January following the end of the tax year – the normal payment date for Self Assessment income tax, or three months after the date of the Simple Assessment, if that is later.
Payment must either be made online via your Personal Tax Account, or by sending a cheque, made payable to ‘HM Revenue and Customs only’, to:
You must put the reference number from the Simple Assessment letter on the back of the cheque. There is no payslip to send with the cheque but if you contact HMRC they will arrange to send you one. Make sure you make this request in plenty of time so that your payment is not late. Alternatively, you could send a brief covering letter with the cheque explaining you are making the payment to settle a Simple Assessment tax bill for the relevant tax year. You may also wish to staple the cheque to the letter.
Who does Simple Assessment apply to?
HMRC initially introduced Simple Assessment for certain taxpayers with only a state pension for 2016/17 – there is more information about who this affects in our news article of September 2017 Important changes for taxpayers with only a state pension.
HMRC are also starting to use Simple Assessment for other simple cases, for example, certain individuals who have more than one source of income and who would normally expect to receive a P800 (a PAYE reconciliation).
Simple Assessment is not used if you have already received a P800 and the first letter requesting voluntary payment of the tax due.
Simple Assessment is also not used if HMRC have to reconcile your income tax for more than one tax year.
The roll-out of Simple Assessment was halted in May 2018 as resources were redeployed to prepare for the UK’s exit from the European Union. It is likely that the roll-out will be further delayed in light of the coronavirus outbreak in 2020.
It is not possible for an individual to register for Simple Assessment unilaterally; HMRC use Simple Assessment at their own discretion.
Do HMRC charge interest and/or penalties on Simple Assessments?
HMRC can charge interest on the underpaid tax and penalties for late payment of tax in respect of Simple Assessments.
It is our understanding that they are currently not doing so.
What records do I need to keep?
There is no legal requirement for people in Simple Assessment to keep records.
You may wish to keep some records however, for your own purposes.
There is more information on record-keeping for Self Assessment on GOV.UK, which you might find helpful.
Where can I find more information?
You can find information on how to pay a Simple Assessment tax bill on GOV.UK.