Starting in June, HMRC will begin sending out simple assessment letters which for many will come as an unexpected surprise.
From June 2025, HMRC will begin to issue simple assessment letters to those who are not required to make full self assessment returns. As a rule, you will receive a simple assessment letter if you:
- owe income tax that cannot be automatically taken out of your income;
- owe HMRC £3,000 or more;
- have tax to pay on your State pension;
- either do not have a PAYE code or HMRC cannot collect the tax due via an adjustment to your code.
The letter covers the 2024/25 tax year and gives:
- a detailed calculation of the tax due;
- the latest date by which you must pay the tax (31 January 2026 for the 2024/25 tax year);
- how you pay the tax;
- what action to take if you disagree with HMRC’s numbers.
While some people receive simple assessments regularly, for most, the letter will be unexpected. A key driver behind this is the frozen personal allowance, which has remained at £12,570 since April 2021 and isn’t set to rise until 2028/29.
Although the basic State pension and new State pension are currently below this threshold, any additional State pension, especially with the 6.7% increase in 2024/25, or deferred pension payments could push total pension income above the personal allowance, triggering a tax bill.
To further complicate matters, if you owe tax on bank and/or building society interest, HMRC may send you two simple assessment letters for 2024/25, depending on when they receive the interest information. In those circumstances, any amount due on the second assessment is independent from the first.
What HMRC is likely dreading is an overall increase in the new State pension of 5% or more from the current level (£230.25 a week) before the 2028/29 tax year begins. If that happens, the new State pension alone will exceed the personal allowance, potentially dragging anyone receiving a full new State pension into tax. With inflation presently above 3% and around 5.5% earnings growth, that 5% threshold could be breached in 2026/27.
Tax laws can change. The Financial Conduct Authority does not regulate tax advice.
17th June 2025
