Over the next 6 weeks, HMRC are writing to around 560,000 taxpayers who have taxable income but who are not in Self-Assessment, or for whom we can’t automatically deduct the tax owed via a PAYE tax code.
As a member of SPA you will know how HMRC operate. However it is important that you know what is going to happen to some of your clients. Taxpayers without an accountant may not know and this should create an opportunity to help and grow your client base.
The letter will include a detailed calculation of any tax due for income the taxpayer received between April 2023 and April 2024.
The taxpayer will need to pay what they owe using Simple Assessment.
For some, including around 140,000 pensioners who will receive a letter, this will be the first time they’ve received a Simple Assessment.
How you can help
HMRC would like your help to explain to taxpayers why they’ve received HMRC letter and what, if anything, they need to do.
HMRC have added some information below and, specifically for pensioners, an online guide to help you with this.
About the letter HMRC are sending to taxpayers
It will explain:
- what they need to do
- how much tax they owe
- how to pay it
- when they need to pay it (usually by the following 31 January)
They don’t need to do anything before receiving the letter.
If they don’t receive a letter, this means they probably don’t have any tax to pay – and they don’t need to contact us.
How HMRC receive income information
HMRC receive information about a taxpayer’s taxable income including state pensions, savings and dividends – from the Department for Work and Pensions, banks and building societies.
If a taxpayer’s taxable income is more than their Personal Allowance (£12,570 for most people), they may owe tax. Many taxpayers report their income to HMRC using the Self-Assessment process or HMRC automatically deduct the tax owed using taxpayer’s
PAYE tax code. If a taxpayer isn’t in Self-Assessment and HMRC can’t collect tax via PAYE, HMRC issue a Simple Assessment.
A taxpayer may have a lower Personal Allowance if they’ve transferred part of their taxable allowance – such as Marriage Allowance – to their partner.
HMRC online is available at Simple Assessment guide for pensioners.
