Understand your Simple Assessment tax bill
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.