In the coming weeks, HMRC will be issuing Simple Assessment tax statements to pensioners.
Why are Simple Assessment tax statements being issued?
Due to the combination of frozen tax thresholds and significant increases in the state pension, many pensioners are now being required to pay income tax for the first time.
The previous government decided to freeze the personal allowance at £12,570 until 2028.
The full new state pension saw a 10% increase in April 2023, bringing it to over £10,600 annually, and another 8.5% increase in April 2024 saw it rise to more than £11,500 per year.
HMRC has stated that pensioners will receive a Simple Assessment if there is an underpayment of income tax for a tax year that cannot be automatically collected through PAYE, and if they are not required to file a self-assessment tax return.
Are you making a tax underpayment?
Underpayments of income tax can occur in the following scenarios:
- Pensioners who receive income from the State Pension, occupational pensions, employment pensions, and most taxable state benefits.
- Pensioners with up to £10,000 of untaxed income, such as from savings or investments.
HMRC will use the information it already has, along with data provided by banks and building societies, to assess each individual’s income and tax situation. It will then calculate any tax owed or refund due, with the details outlined in the Simple Assessment tax statement.
Need assistance?
HMRC advises taxpayers to carefully review their Simple Assessment statements to ensure accuracy before making any payments.
For assistance with Simple Assessment matters, please contact us.
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