HMRC Issues 1.8 Million Simple Assessment Letters for 2025-26 Tax Year with January 2027 Deadline

HMRC will issue around 1.8 million Simple Assessment letters this summer for the 2025 to 2026 tax year, the department announced on 28 July 2026^[1]. Recipients must pay any tax owed by 31 January 2027 unless a different date is specified in their individual letter^[1].

The letters - officially designated PA302 - are sent to individuals who have tax to pay on income that has not been collected through Pay As You Earn (PAYE) or Self Assessment^[1]. HMRC's Chief Customer Officer Myrtle Lloyd said: "If you receive a Simple Assessment letter and have tax to pay, please don't ignore it. It is quick and easy to pay any tax owed via the HMRC app."^[1]

Who Receives Simple Assessment Letters

HMRC sends Simple Assessment tax calculation letters to customers who have tax to pay that cannot be collected automatically^[1]. According to the department, customers may receive a letter if they have:

• Tax to pay on interest on savings or dividends
• A second income that has not been taxed
• Tax due on pension income
• Received more tax-free allowance than they were entitled to
• Tax that cannot be collected through a tax code, for example larger amounts owed, typically £3,000 or more^[1]

The letters set out exactly how much tax is owed and why, providing a calculation based on income information HMRC already holds^[1]. Payments can be made in full or in instalments before the deadline and do not require a tax return^[1].

Simple Assessment and Company Directors

Company directors represent a significant portion of those likely to encounter Simple Assessment. Directors who draw both PAYE salary and dividend income from their companies - a common tax-efficient remuneration structure - may trigger Simple Assessment if their dividend income exceeds the personal allowance after PAYE deductions.

Directors with multiple appointments are particularly exposed to this mechanism. When dividend income from several companies combines with PAYE income, or when directors hold positions in one company while receiving pension income, the resulting tax liability often falls outside HMRC's code-based collection system and into Simple Assessment territory.

Payment Methods and Compliance

Customers can pay using the HMRC app, online via GOV.UK, by bank transfer or by cheque^[1]. The department emphasises that people should check the figures in their letter against their own records before making payment^[1].

Detailed guidance on Simple Assessment - including a dedicated guide for pensioners - is available on GOV.UK^[1]. HMRC's Tax Confident website also offers resources to help people understand their tax obligations^[1].

The Simple Assessment system operates as a halfway house between fully automated PAYE and the manual Self Assessment regime. Unlike Self Assessment, recipients do not complete a tax return - HMRC performs the calculation based on data it already holds from employers, pension providers, and financial institutions. This reduces administrative burden for taxpayers but also limits their ability to claim reliefs or deductions not already known to HMRC.

UK Company Director Population Context

The UK company register currently shows 33.2 million active company officers across the economy^[2]. This economy-wide figure includes all active directors, company secretaries, and other officer appointments registered with Companies House.

Across the broader UK company register^[2], the sectors with the highest company counts include real estate (438,776 companies in "other letting and operating of own or leased real estate"), management consultancy (267,187 companies), and business support services (220,381 companies)^[2]. Directors in these sectors frequently structure remuneration through dividend payments, which can trigger Simple Assessment when combined with other income sources.

The register shows 5.6 million active companies across all sectors^[2], with 15,317 new incorporations in the past seven days^[2] - indicating continued growth in the director population who may eventually encounter the Simple Assessment system.

The Growing Role of Automated Tax Collection

The 1.8 million Simple Assessment letters represent a substantial parallel tax collection stream operating outside both traditional PAYE employment and the Self Assessment system. For directors accustomed to the predictability of PAYE deductions or the annual rhythm of Self Assessment, the arrival of a PA302 letter can come as a surprise - particularly when it relates to income from previous tax years that recipients may have assumed was already settled.

HMRC's emphasis on the HMRC app and digital payment channels reflects the department's broader digitisation strategy. The Simple Assessment process requires no paper filing, no manual calculation by the taxpayer, and increasingly, no human intervention from HMRC staff. This automation allows the department to process millions of cases that would previously have required either Self Assessment registration or manual correspondence.

As more taxpayers accumulate multiple income streams - employment, self-employment, pensions, property, savings interest, and dividends - the boundaries between PAYE, Self Assessment, and Simple Assessment will continue to blur. Directors navigating this landscape face an increasing compliance burden: understanding which income sources trigger which collection mechanism, and ensuring they meet deadlines they may not have anticipated receiving.