Hundreds of thousands of pensioners across the UK are facing unexpected tax bills after being issued with HMRC “simple assessments,” with experts warning the system is quietly dragging more retirees into the tax net.
According to HMRC figures, 1.32 million simple assessments were sent out in the 2023–2024 tax year – a record number and a 74% increase on the previous year.
A spokesperson for Spencer Churchill Claims Advice said: “We are seeing the full effects of fiscal drag in action. The Government’s decision to freeze income tax thresholds while increasing the state pension has created a perfect storm – one where more pensioners are unknowingly pushed into the tax system.”
Many retirees mistakenly assume they earn too little to pay income tax, only to be blindsided by a demand from HMRC, the experts said, adding: “A growing number of people who have never had to deal with HMRC before are now receiving tax bills out of the blue. It’s incredibly stressful, particularly for those on fixed incomes who believed they were under the threshold.”
Personal tax allowance
The tax-free personal allowance currently stands at £12,570, but with the state pension rising due to the triple lock and many pensioners receiving private pension income on top, it’s easy to exceed the limit without realising.
The experts said: “The tax rules haven’t changed – but people’s income has, and that’s what’s catching people out. These aren’t high earners. They’re ordinary pensioners who might only be a few hundred pounds over the allowance, but they’re now being treated like underpaying taxpayers.”
What is HMRC simple assessment?
Simple assessments are issued when HMRC believes it already holds enough information to calculate what is owed, removing the need for a full self-assessment return. But pension experts warn this creates confusion: “Most pensioners don’t expect to hear from HMRC unless they’ve done something wrong – so receiving a formal tax bill with little explanation feels intimidating. Many are left unsure how to challenge it and reaching HMRC for support has become increasingly difficult.”
Spencer Churchill Claims Advice is calling for a wider review of how the tax system handles pensioners, particularly as frozen thresholds are set to remain in place until at least 2028: “This issue is only going to grow. If current policies continue, we expect even more pensioners to face tax demands in the coming years. There needs to be clearer communication and a more supportive system in place for those being caught out through no fault of their own.”
For those who have received a simple assessment and are unsure why they owe tax, experts recommend seeking professional guidance and checking whether HMRC’s calculations include the full picture of their income and entitlements.
The spokesperson added: “We’d urge any pensioner who’s confused or concerned by a recent tax demand to get advice before paying. It’s possible that income or allowances have been miscalculated, and there may be ways to challenge the bill.”
