Simple Assessment guide for pensioners
Updated 22 August 2024
© Crown copyright 2024
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/pensioners-and-tax-communications-materials/simple-assessment-guide-for-pensioners
What is Simple Assessment
Simple Assessment is a way for HMRC to collect underpayments of tax from taxpayers with relatively straightforward tax affairs. As we are able to issue Simple Assessments to customers it means they are not required to complete a Self Assessment tax return.
When will HMRC issue a Simple Assessment
Customers receive a Simple Assessment where there is an underpayment of Income Tax for a tax year that cannot be collected automatically via Pay As You Earn (PAYE) and the customer is not subject to Income Tax Self Assessment. PAYE is the system an employer or pension provider uses to take Income Tax and National Insurance contributions before they pay wages or pension.
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)
How it works
HMRC will use the information it already holds, and information supplied from banks and building societies about your income and tax situation. Information about the State Pension you are due will also be provided to HMRC automatically by DWP.
They will calculate any tax you owe or the tax refund you’re due and you’ll receive a Simple Assessment letter (PA302) showing the calculation.
The State Pension figure shown in the letter is the money you were entitled to receive for the whole tax year. This will be a full 52 weeks’ worth.
Key Dates
HMRC sends the majority of Simple Assessment letters between July and August after the end of the tax year, although Simple Assessments can be sent at any time as information becomes available.
If you owe tax, you’ll need to pay it by the deadline stated on the letter (usually 31 January or 3 months from the date of the letter).
What You Need to Do
You will need to check the information on the Simple Assessment letter carefully, including your address.
If the information is correct, you just need to follow the instructions on how to pay your assessment. You can pay online or by using the HMRC app.
If the information is incorrect or you have additional untaxed income, you’ll need to contact HMRC to update your details within 60 days.
Simple Assessment advantages
There is no need for you to complete a Self-Assessment tax return – HMRC does the tax calculation for you.
Simple Assessment limitations
Simple Assessment is not suitable for more complex tax affairs (such as self-employment income, rental income, capital gains).
Getting help
GOV.UK has guidance on Simple Assessment, and you can also contact HMRC or seek professional advice if you have any questions or concerns.
If pensioners believe that they might have income above their personal allowance and have not received a Simple Assessment, they can work out if they need to pay Income Tax.
Remember, Simple Assessment is designed to make the process easier for pensioners with straightforward tax situations. If your circumstances change, you’ll need to inform HMRC.
Customers with more complex tax situations may need to complete a Self-Assessment tax return.