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HMRC internal manual

PAYE Manual

Reconcile individual: simple assessment: introduction and overview

Introduction

Simple Assessment was introduced in September 2017, as a method of collecting any underpaid PAYE tax following the End of Year reconciliation, where the underpayment cannot be collected via the individual’s tax code, from tax year 2016-17 onwards.

Simple Assessment introduces legislation which replaces the PAYE voluntary payment process and removes the need for customers to complete a Self Assessment tax return, which was the method of enforcing payment of underpaid PAYE tax before Simple Assessment was introduced.

An underpayment being collected by Simple Assessment will have an enforceable due date set as follows:

  • If the End of Year reconciliation is completed between April up to and including the 24 October the due date will be the 31 January of the following year. For example, a 2018-19 reconciliation completed in September 2019 will have a due date of 31 January 2020.
  • If the reconciliation is completed after the 24 October the due date will not be 31 January of the following year, instead the due date is set 3 months and 7 days from the reconciliation date. For example, a reconciliation completed on the 30 October 2019 will have a due date of 6 February 2020.

Outputs

Where a reconciled underpaid tax year is to be collected by Simple Assessment a PA302 is issued to the customer. The PA302 is a tax calculation and contains a charge reference, a due date and reference to the legislation.

The following table shows when a PA302 would be issued

Reconciliation Event Output
Reconciled-Underpaid. Year cannot be coded, to be collected by Simple assessment (2016-17 onwards) PA302 tax calculation containing details and reasons for the underpayment, charge reference and due date
Multiple underpaid years that cannot be coded (2016-17 onwards) A separate PA302 will be issued for each Simple Assessment tax year
Year re-reconciled balanced or overpaid. The Simple assessment charge is reduced to Nil A nil PA302 will be issued cancelling the charge. A P800 will also be issued if the year is reconciled overpaid
Simple assessment year re-reconciled with no change to result, and no Query or Appeal flag is set PA302 will not be issued
Simple assessment year is reconciled by batch process after closure of Query, Query and Suspend, Appeal, Appeal and Suspend flag. PA302 will be issued to inform customer of result even if the result remains the same as original amount
RLS indicator set on customer account PA302 will be suspended. WI215 will be created when a new address is present
The Manual Correspondence Indicator is unset A PA302 will not be released until the year is reconciled. Where there is no change to the amount due a manual PA302 is issued
In year reconciliation produces an underpayment A P800 will be issued in year. A reconciliation which occurs in year will not be collected by Simple Assessment