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From 6 January 2024, the main rate of class 1 National Insurance contributions (NIC) deducted from employees’ wages is reduced from 12% to 10%. From 6 April 2024, the main rate of self-employed class 4 NIC will reduce from 9% to 8% and class 2 NIC will no longer be due. Those with profits below £6,725 a year can continue to pay class 2 NIC to keep their entitlement to certain state benefits. Our guidance will be updated in full in spring 2024.

Updated on 6 April 2023

Simple Assessment

Simple assessment is a method of assessing income tax due in certain straightforward cases.

Content on this page:

Introduction

Individuals in simple assessment do not have to submit a self assessment 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 (the calculation is referred to as a 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), employers and other organisations (such as banks) provide to them. It is important to check the figures on the simple assessment calculation carefully.

Right of appeal

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.

Payment of tax

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, by making a bank transfer or by sending a cheque.

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 should not fasten the cheque to the letter with a staple, paperclip or similar.

There is guidance on other methods of paying your simple assessment bill on GOV.UK.

When HMRC use simple assessment

HMRC use simple assessment for certain taxpayers with only a state pension and 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.

It is not possible for an individual to register for simple assessment unilaterally; HMRC choose when to issue a simple assessment.

Interest and penalties

HMRC can charge interest on the underpaid tax and penalties for late payment of tax in respect of simple assessments.

Record-keeping requirements

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.

We provide more information on our separate page on tax record-keeping, which you might find helpful.

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