HMRC to send Simple Assessment tax statements to pensioners

HMRC will send Simple Assessment tax statements to pensioners in the next few weeks.

The combination of frozen tax thresholds and a substantial increase to the state pension has led to many more pensioners being dragged into paying income tax for the first time.

The last government froze the personal allowance at £12,570 until 2028.

The full new state pension saw a 10% increase in April 2023 to over £10,600 annually, followed by another 8.5% rise in April 2024, taking it to more than £11,500 per year.

HMRC says that pensioners will receive a Simple Assessment where there is an underpayment of income tax for a tax year that cannot be collected automatically via PAYE and they are not subject to income tax self assessment.

An underpayment of income tax can result from:

• pensioners who receive income from the State Pension, occupational pensions, employment pensions, and most taxable state benefits
• pensioners with up to £10,000 of untaxed income (for example, from savings or investments).

HMRC will use the information it already holds and information supplied from banks and building societies about people's income and tax situation.

The tax authority will calculate any tax owed or refund due and the Simple Assessment tax statement will show the calculation.

HMRC says taxpayers will need to check that their Simple Assessment statements are correct before paying any tax due.

Please contact us for advice on Simple Assessment matters.

Internet links: GOV.UK