As the tax year draws to a close, individuals who are employed or receiving a pension may soon find themselves facing a potentially daunting letter from HMRC.
HMRC is currently issuing urgent warnings to hundreds of thousands of UK households who are receiving tax letters through their letterboxes.
The tax authority is sending these letters to taxpayers whose tax payments don’t align with their income.
Known as Simple Assessment Letters or Tax Calculation Letters, both letters explain if you are due a refund or need to pay more tax from the previous tax year, 2023/2024.
The letter will be sent to those who owe tax that cannot be collected through the standard Pay As You Earn (PAYE) system.
A HMRC spokesperson said: “We’re currently issuing Simple Assessment letters for the 2023/24 tax year. Customers will automatically receive one if they owe tax that cannot be collected via their tax code or are not registered Self Assessment.”
Simple Assessment letters are sent to three specific groups of taxpayers.
Simple Assessment letters are sent to three specific groups of taxpayers
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Those who receive these letters include people who owe Income Tax that cannot be automatically deducted from their income.
The letters also target individuals who owe HMRC £3,000 or more.
State Pension recipients who need to pay tax on their pension income form the third group receiving these assessments.
A tax calculation letter, also known as a P800, is commonly issued when someone is owed a refund or needs to pay more tax due to an incorrect tax code, changing jobs and being paid by multiple employers in the same month, or starting to receive a pension at work. It can also be sent if an individual begins receiving Employment and Support Allowance or Jobseeker’s Allowance.
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Those who think the calculations are wrong can contact HMRC but will need to specify which amounts they think are wrong and why.
The payment deadlines for these Simple Assessment letters are strictly defined.
For those who received letters before 31 October 2024 for the 2023/24 tax year, payment must be made by 31 January 2025.
Recipients who get their letters on or after that date, whether for the 2023/24 tax year or earlier tax years, must pay within three months of the letter’s date.
HMRC typically sends most Simple Assessment letters between July and August after the end of the tax year, though they can be issued at any time as information becomes available.
Recipients who receive a Simple Assessment letter must carefully check all information within 60 days and contact HMRC if they spot any errors.
If taxpayers cannot meet the payment deadline, they must contact HMRC directly to discuss their situation.
HMRC may offer the option to pay the outstanding amount in instalments, but this can only be arranged after the payment deadline has passed.
Taxpayers can choose to pay online, make a bank transfer, or send a cheque.
Those making payments will need their National Insurance Number and UK bank account details. HMRC will request details about the taxpayer’s income, monthly expenditure, and any existing savings or investments.
Those with savings or assets should be prepared, as HMRC will expect these to be used to reduce the tax debt as much as possible.