Some taxpayers will have received a Simple Assessment calculation from HMRC during the warmer summer months. What are simple assessments and what should you do if you receive one?
Please note: The Simple Assessment or PA302 is not to be confused with the P800 End of Year Tax Calculation. Although both forms are used to calculate the end of year tax position, the P800 is issued where an underpayment can be automatically collected through a taxpayer’s PAYE tax code, whereas the Simple Assessment liability cannot be collected automatically and must be settled directly by the taxpayer.
HMRC send out simple assessments following a tax year end where they have calculated that there is a further tax liability, but they do not require a tax return. For example, a simple assessment may be issued if not enough tax was collected from employment or pension income through the PAYE system. Any tax shown as payable by a simple assessment is due for payment by 31 January following the year end to which it relates.
If you receive a simple assessment, you should not ignore it. You should review the simple assessment calculation carefully to ensure it includes all sources of taxable income and that the information is accurate. If it’s correct, the tax should be paid by the deadline. If you think your calculation looks wrong, you should contact HMRC within 60 days of the simple assessment being issued.
If you are unable to pay the amount requested in full, you should contact HMRC where they may be able to agree to an instalment ‘time to pay’ agreement. You will need details of your current income and expenditure to do this.
HMRC has information on Simple Assessments here.