Understand your Simple Assessment tax bill
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1. Overview
You may get a Simple Assessment if you owe tax for a previous tax year.
At the end of each tax year, HM Revenue and Customs (HMRC) checks how much tax you have paid using information from:
- employers
- pension providers
- banks and building societies
HMRC sends you a Simple Assessment tax bill (also known as a PA302) if you did not pay enough tax and they could not collect it through your tax code.
You’ll receive a letter by post or in your Personal Tax Account. It tells you how much tax you owe, how it was calculated and how to pay.
Simple Assessment is not the same as making a Self Assessment tax return.
This guide is also available in Welsh (Cymraeg).
Why you may get a Simple Assessment
You may get a Simple Assessment if you:
- owe Income Tax that cannot be collected through your tax code
- owe £3,000 or more in tax
- need to pay tax on your State Pension
- have untaxed income (such as savings interest or dividends)
Example
You receive a State Pension of £16,000 a year because you also receive Additional State Pension payments. You also get £1,500 a year from a private pension.
Your tax-free Personal Allowance is £12,570. HMRC takes your tax-free Personal Allowance off your total income to work out the amount you’ll need to pay tax on.
This means you pay tax on £4,930 at the basic rate of 20%. The total tax you are due to pay is £986.
You’ll pay £750 tax through your private pension during the tax year. This is 50% of your private pension income, which is the maximum amount of tax that can be collected through your tax code.
HMRC sends a Simple Assessment after the end of the tax year to collect the remaining £236 tax due.
If you get more than one Simple Assessment
Sometimes HMRC may send more than one Simple Assessment tax bill for a tax year.
This can happen if HMRC receives new or revised information after your first tax bill was sent.
The latest Simple Assessment will show the total amount of tax you owe for the year. This includes any amounts shown in earlier tax bills, even if you’ve already paid it.
If you’ve already paid the amount from an earlier tax bill, you’ll only need to pay the difference between what you’ve paid and the total in the latest tax bill.
Example
You receive a Simple Assessment showing you owe £300 and pay it in full.
HMRC then receives updated information from your bank about your savings income. They send you a new Simple Assessment showing you owe £450 for the same tax year.
The £450 is the total amount of tax you owe for the year, including the £300 shown on your first Simple Assessment. Because you’ve already paid £300, you only need to pay the remaining £150.
If you pay too much, you’ll need to contact HMRC for a refund.
2. Check your Simple Assessment tax bill
You should check the figures used in your Simple Assessment tax bill to make sure they are correct before paying. This will help make sure you pay the right amount of tax.
Your Simple Assessment will show:
- your taxable income (for example, income from pay, pensions or state benefits)
- any Income Tax you’ve already paid
- the amount of tax you owe
- a 14-character payment reference number (starting with X)
You’ll find a detailed breakdown of the calculation in the letter.
Some things such as receiving Marriage Allowance or tax you owe from a previous year may not appear as separate entries on your Simple Assessment. Instead, these amounts will usually be included in the total shown in the adjustments section of your Simple Assessment.
How to check your tax calculations
If you’re not sure the figures are correct, check the amounts in your Simple Assessment match those in your records, for example on:
- your P60 or P45
- bank statements
- letters from the Department for Work and Pensions (DWP) or Social Security Scotland
- pension or benefits summaries
You may be able to use the HMRC tax checker to estimate how much tax you should have paid in the previous tax year.
If you do not understand your calculation, you can get advice from HMRC or a professional, for example a tax advisor or accountant.
If you get state benefits
You can use your state benefit award letter to check the amount in the Simple Assessment is correct.
The payment frequency for state benefits can vary.
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Check your award letter for the relevant tax year to find out how much and how often you’re paid.
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If you’re paid every 4 weeks, multiply your payment by 13 (not 12) to get the annual amount. If you’re paid every 2 weeks, multiply your payment by 26. If you’re paid monthly, multiply your payment by 12.
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Check this amount against the amount in your Simple Assessment to make sure they’re the same.
If you get the State Pension, find out how your State Pension is taxed to check the amount in your Simple Assessment is correct.
Paying your tax bill
If the calculation is correct, you must pay the amount shown by the deadline on your Simple Assessment.
Find out how to pay your Simple Assessment tax bill.
3. If the amounts used in your tax calculation are wrong
Call or write to HMRC within 60 days of the date on your tax bill if you think the amounts in the calculation are wrong.
You’ll need to tell HMRC:
- which amounts you think are wrong
- what the amounts should be
You should explain what records you used to check your tax calculation. This could include documents such as payslips, bank statements or pension information.
HMRC may ask you to send these records as evidence.
What happens next
If HMRC agrees that your Simple Assessment was wrong, you’ll be sent a new Simple Assessment with an updated tax calculation.
If they disagree, you’ll get a decision letter explaining why, how to pay and how to appeal if you still disagree.
You’ll still need to pay your Simple Assessment tax bill by the deadline unless HMRC tells you they’ll delay your payment date.
How to appeal
If you disagree with HMRC’s decision in the letter, you can make an appeal. Your letter will tell you how to do this.
You have 30 days from the date your decision letter was issued to appeal.