Simple Assessment (PA302)

A Simple Assessment is a formal tax calculation sent directly to you by HMRC. It is officially known as Form PA302.

It is important to note that you cannot actively choose or request to use Simple Assessment. HMRC automatically decides when to issue it if they already hold sufficient third-party data regarding your income and tax position to calculate your liability without your input.

Who Receives a Simple Assessment?

HMRC typically issues a Simple Assessment to individuals with straightforward tax affairs who do not need to be in the full Self Assessment system, but still owe tax that cannot be captured via standard monthly payroll.

Common examples include:

• State Pensioners: Individuals whose state pension income has crossed above the tax-free Personal Allowance threshold.
• PAYE Employees: Workers who have underpaid tax in a previous year where the balance is too large to be collected or coded out through their ongoing monthly payslips.

What You Need To Do

If a PA302 letter drops through your letterbox, you must review it thoroughly. The document will explicitly outline your total income sources for the tax year and show how HMRC arrived at your final tax bill.

• If the information is correct: You do not need to fill out any forms. You simply pay the exact amount owed using the payment details and deadline specified in the letter.
• If the figures are wrong: You must act quickly to dispute the calculation.

The 60-Day Dispute Rule: If you spot an error on your Simple Assessment, you must contact HMRC within 60 days from the date printed on the notice. You will need to provide supporting documentation—such as final payslips, P60s, or bank pension statements—to prove the inaccuracy. HMRC will then review the evidence and issue an amended PA302 if they agree with your challenge.

Important System Limitation

If HMRC has officially issued a Simple Assessment (PA302) for a specific tax year, you are legally blocked from submitting a standard Self Assessment tax return (SA100) for that same income. Because HMRC has already institutionalized your tax position based on their internal data, the PA302 completely replaces the requirement for a traditional tax return. If you have additional untaxed income streams that HMRC doesn't know about, you must contact them to have the Simple Assessment canceled and your Self Assessment record re-opened.

Key Points to Remember

• A Simple Assessment is an automated bill generated by HMRC, not something you can apply for.
• It is aimed at non-self-employed individuals with straightforward underpayments or pension incomes.
• You have a strict 60-day window to legally challenge the figures if you spot a mistake.
• A valid PA302 completely overrides the need to file a standard annual tax return.