Bill shock for millions

SIMPLE TAX ASSESSMENTS

- By Harvey Jones

MORE than a million state pensioners on low incomes face a shock bill after unwittingly being sucked into HMRC’s net by Chancellor Rachel Reeves’s ongoing tax threshold freeze.

The taxman issued a record 1.32 million so-called “simple assessments” in the 2023/24 tax year, up 74% from 757,745 the year before, according to figures obtained by wealth manager Quilter following a Freedom of Information request.

This follows several large state pension triple-lock hikes at a time when income tax thresholds have been frozen until at least 2028.

Even more pensioners will be forced to file self-assessment tax returns as a result, or risk costly penalties that were increased by Reeves last month.

HMRC uses simple assessments to collect tax without requiring the taxpayer to complete a self-assessment return. It will issue a tax bill directly if it thinks it holds enough information about that person’s income to do so.