An individual may have income tax to pay that cannot be collected through pay as you earn. To prevent that person from having to complete a tax return, HMRC may send them a simple assessment letter to collect the tax due. The types of income that are commonly dealt with under simple assessment include the state pension and bank and building society interest. The simple assessment letter (PA302) includes a calculation of the tax due based on the information held by HMRC.  

More letters being sent 

The number of simple assessment letters issued has increased significantly since they were introduced in September 2017. This is due to a number of tax policy decisions and other factors, including the freezing of the income tax personal allowance at £12,570, the impact of the state pension triple lock and increases in interest rates following the COVID-19 pandemic.  

HMRC has confirmed that it is in the process of issuing a new batch of simple assessment letters to individuals with tax to pay on interest received in 2024/25. Simple assessment letters are sent by post or to the taxpayer’s personal tax account if they have one.  

Action to take 

Although ICAEW welcomes simple assessment as an alternative to self assessment for some taxpayers, it is aware of issues with the current system, as explained below. Taxpayers receiving a simple assessment letter are encouraged to check it thoroughly and to call or write to HMRC within 60 days of the date of the letter if they: 

• have any queries; 
• believe that the letter contains an error; or 
• think it should be withdrawn.   

Issue: letters may contain errors  

It is important to check that the figures in the simple assessment letter match those in the taxpayer’s records, for example, their bank statements and correspondence received from the Department for Work and Pensions. Further, some figures may be estimated based on historic amounts (eg, donations made under gift aid, employer benefits, and pension contributions). It is important that accurate amounts are used.  

Calculating income tax can be complicated, particularly where the calculation involves bank and building society interest. For example, depending on the circumstances, no income tax may be payable on interest where it is within the personal allowance or the personal savings allowance, or where the starting rate for savings applies. This can make checking simple assessment letters difficult. To help with this, HMRC has published guidance explaining how interest is taxed and an online tool for checking a simple assessment tax calculation.  

Issue: multiple letters received 

The taxpayer may receive more than one simple assessment letter for a tax year. For example, a taxpayer who has already received a letter for 2024/25 that did not include their bank and building society interest may now receive a second letter taking that information into account.  

This can be confusing, particularly as the second letter will show the total tax payable for 2024/25, including the tax due from the first letter even if this amount has been paid. The taxpayer should deduct any tax paid following the first letter from the tax shown as due in the second letter before making a further payment.  

Issue: letters sent in error 

ICAEW members have reported that simple assessment letters have been sent to taxpayers who are in self assessment. Where this is the case, the taxpayer, or their agent if they have one, should contact HMRC and ask for the simple assessment to be withdrawn. 

Paying a simple assessment tax bill

The due date for paying a simple assessment tax bill for 2024/25 depends on the date of the letter. If the letter was issued before 31 October 2025, the due date is 31 January 2026. If it was issued after that date, the taxpayer has three months from the date of the letter to pay the tax due. HMRC has published guidance on how to pay a simple assessment tax bill. 

If the taxpayer believes they will be unable to pay their tax bill in full by the due date, they may wish to consider contacting HMRC to agree a time to pay arrangement. Since August 2025, an online application can be made in respect of a simple assessment tax liability. 

Further information

• Listen to this recent episode of ICAEW’s The Tax Track podcast to learn more about simple assessment: Paying tax outside self assessment | ICAEW.