HMRC to send 1.4 million letters over unpaid tax
HM Revenue and Customs (HMRC) will send 1.4 million letters in the coming months to alert UK taxpayers about unpaid income tax as part of its annual compliance exercise.
The notices, known as Simple Assessment letters, are issued to individuals whose income has not been fully taxed through Pay As You Earn (PAYE) or Self Assessment.
HMRC said the assessments cover tax owed on income above the personal allowance for the 2024/25 tax year.
The letters will be sent primarily over the summer, although HMRC may issue them at any time as new information is received.
They are triggered when the tax authority receives data from employers, banks, building societies, financial institutions, or the Department for Work and Pensions indicating that additional tax is due.
Who will receive a letter?
Recipients typically include people with:
- unpaid tax on interest from savings or dividends,
- income from second jobs,
- tax-free allowances they were not entitled to, or
- pension payments where the correct amount of tax has not been deducted.
The notices also alert individuals who have paid too little tax in error.
Taxpayers have until 31 January 2026 to pay the amount owed in full or to agree an instalment plan with HMRC. Payments can be made online through GOV.UK, by bank transfer, or by cheque.
Those who believe their notice is incorrect can query it within 60 days of receipt. If HMRC accepts the query, a revised letter will be issued. If not, the original assessment stands, but individuals have the right to appeal online within 30 days.
The use of Simple Assessment letters has become a regular feature of HMRC’s compliance strategy, allowing the authority to collect tax without requiring individuals to complete a full Self Assessment return.
The system was introduced to simplify the collection of tax from people who owe small amounts outside PAYE.
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While the letters are routine, HMRC emphasises that taxpayers should review them carefully to avoid penalties or interest on unpaid amounts. Failure to act could lead to enforcement measures.
Most letters are sent during July and August, aligning with the end of the tax year data cycle, but HMRC has stated that they may continue issuing notices into the autumn depending on when information is processed.
