HMRC spent 28 July telling 1.8 million people not to bin the brown envelope. The letter is a Simple Assessment — form PA302 — for 2025/26. Working-age recipients have been getting them since 30 June; pensioners from 12 August; a second bank/building society interest wave lands October–December.
If you are a CFO, FD, PE portfolio finance lead or tax agent, this is not a retail curiosity. It lands on directors, NEDs, senior managers with savings and dividends, founders on salary plus interest, and employees who will walk into payroll asking what the letter means. Treat it as a controls and cash item.
Official source: HMRC’s 28 July 2026 press notice. Practical payment rules sit on GOV.UK Simple Assessment and the check/dispute guide at Check your Simple Assessment tax bill.
What Simple Assessment actually is
Simple Assessment is HMRC’s reverse of Self Assessment. Instead of the taxpayer filing a return, HMRC builds a computation from third-party data it already holds — employers, pension providers, banks and building societies, and DWP — and issues a demand. Challenge within 60 days or the assessment hardens.
Introduced by Finance Act 2016 and rolled out from 2016/17 for state pensioners over the personal allowance and PAYE underpayments that could not be coded out, volumes have exploded. ATT notes over 1.3 million assessments for 2023/24 alone, driven by frozen personal allowances, the state pension triple lock, and higher interest rates. See ATT on simplifying Simple Assessment and ICAEW Tax Faculty on checking letters.
HMRC’s consumer explainer is on the Tax Confident Simple Assessment page; Ross Martin’s freeview remains a useful technical summary: Simple Assessment at a glance. Typical triggers for a PA302:
- Tax due on savings interest or dividends that PAYE cannot collect
- A second income not fully taxed at source
- Tax on pension income, including State Pension above the personal allowance
- Underpayment that cannot be coded out (often £3,000 or more)
- More personal allowance used than the taxpayer was entitled to
It is not a full tax return. It does not replace Self Assessment where chargeability rules still require a return. If someone is already in Self Assessment and receives a PA302 in error, the assessment should be withdrawn — contact HMRC promptly. ICAEW has flagged this failure mode repeatedly.
The 2025/26 timetable CFOs need in the diary
For the year ended 5 April 2026:
- Working-age letters: from 30 June 2026
- Pensioner letters: from 12 August 2026
- BBSI (bank/building society interest) tranche: October to December 2026
- Payment: if the letter is dated before 31 October 2026, pay by 31 January 2027; if on or after 31 October 2026, pay within three months of the letter date
- Challenge window: 60 days from the date of the letter
Payment routes: HMRC app, online, bank transfer, cheque. Instalments before the deadline are allowed. Time to Pay is available, including online applications for Simple Assessment liabilities under the usual thresholds. See difficulties paying HMRC and the HMRC app.
Do not confuse the payment deadline with the challenge deadline. You can still owe the money after a failed challenge. You can also lose the right to reopen figures if you sleep on the 60 days.
Why the numbers go wrong — and why CFOs should care
HMRC’s marketing line is that the letter is usually accurate because it is built from third-party feeds. Practitioners know the failure modes.
1. Interest matching is incomplete. ATT reports HMRC can match roughly four in five bank account records to an individual. Interest figures on the PA302 are often aggregated, not line-by-line by account. Estimates based on prior years still appear. Savers with multiple accounts, joint accounts, or NS&I products are classic error cases. If the interest line looks high, demand the breakdown before you pay.
2. Second assessments do not net prior payments cleanly. ICAEW and ATT both flag the double-letter problem. A first PA302 issues without BBSI. A second arrives later with total tax for the year, including the first liability, without deducting what was already paid. The taxpayer has to do the arithmetic. Finance teams fielding director queries need a simple rule: never pay a second PA302 at face value without reconciling the first.
3. Self Assessment collision. Letters go to people already in SA. The fix is withdrawal, not dual compliance. Agents still lack a clean digital authorisation path for PAYE-only individuals, so correction often means phone or post — slow, and easy to miss the 60-day clock.
4. Missing income is not HMRC’s problem after day 60. If the PA302 omits a chargeable source and the taxpayer pays and walks away, the compliance risk sits with the individual. Where material untaxed income or gains exist, cancel Simple Assessment and open (or keep) Self Assessment — do not treat PA302 as full-and-final clearance.
5. Allowances and band interactions are easy to misread. Personal Savings Allowance, the starting rate for savings, dividend allowance, and frozen personal allowance interactions make “tax on interest” non-obvious. HMRC’s own tools help: tax-free interest on savings and the wider income tax checker.
CFO and PE practical checklist
This is not only a personal-tax story. It hits operating companies and funds through people risk, cash timing, and reputation with management teams.
Board and senior team scan (next two weeks)
- Ask directors, NEDs and exec committee members whether a PA302 has arrived or is expected. Many ignore post; some only check the Personal Tax Account sporadically.
- Flag anyone with material untaxed interest, dividends outside ISA wrappers, State Pension plus other income, dual employment, or large prior underpayments.
Payroll / HR / company secretariat
- Brief the people who will field “I got a tax letter” calls. Standard reply: check figures against P60, pension statements and bank interest certificates; do not pay blindly; diary the 60-day challenge date; use official GOV.UK payment pages only.
- Point staff to how to check an HMRC letter is genuine. Diary mid-August for the pensioner wave.
Cash and personal liquidity for key people
- 31 January 2027 will coincide with Self Assessment balancing payments, corporation tax instalments for many March year-ends, and the usual Q4 working-capital squeeze. Directors who leave PA302 cash unplanned will look for company loans or accelerated bonuses. Pre-empt that conversation.
- Where Time to Pay is needed, start early. Online TTP for Simple Assessment exists; do not wait until January.
Agent and advisor protocol
- If your firm acts for individuals who receive PA302s, log letter date, challenge deadline, payment deadline, and whether a second BBSI assessment is still expected in Q4.
- On dispute, write or call within 60 days with specific wrong figures and the correct ones. Vague “this feels high” fails. Keep the paper trail — decision letters start a separate 30-day appeal clock.
- If the client is already in Self Assessment, request withdrawal of the Simple Assessment immediately.
Governance angle for group CFOs
- Simple Assessment is another data exhaust from the same third-party spine that feeds MTD, RTI and BBSI. Payroll and P11D errors cascade into brown envelopes six months later. Related HMRC themes this summer — MTD quarterly updates and draft Finance Bill 2026-27 clauses — all point the same way: collection is being industrialised. See the Finance Bill 2026-27 draft legislation collection and the first MTD quarterly update deadline.
What “do not ignore” means in practice
HMRC’s Chief Customer Officer put it bluntly: if the letter arrives and tax is due, do not ignore it. For a finance leader, translate that into process:
- Authenticate the letter (post or Personal Tax Account; never pay from a cold email link).
- Reconcile every income line to source documents within seven days of receipt.
- Diary day 55 of the 60-day challenge window and the payment date.
- Dispute or pay — or both, if HMRC has not agreed a hold on collection.
- Watch for a second PA302 in the BBSI window and net any prior payment before transferring again.
- Escalate missing income or SA collision to the agent the same week, not in January.
Pensioners get a dedicated guide: Simple Assessment guide for pensioners. Wider help is on HMRC tax help and the income tax contact route via HMRC income tax enquiries.
Bottom line
Simple Assessment is no longer a niche pensioner fix. At roughly 1.8 million letters for 2025/26, it is a mass collection programme sitting beside Self Assessment. HMRC’s 28 July push signals payment and challenge discipline at scale.
For CFOs the work is boring and valuable: map who is in the PA302 population, force a document check before anyone pays, protect the 60-day dispute right, and stop January 2027 becoming a personal-cash crisis that lands on the company as an informal director loan. Check the letter. Challenge the wrong numbers. Pay the right ones on time. If a second envelope arrives in the autumn with a bigger total, reconcile before you transfer.
This article is general information for UK finance professionals, not personal tax advice. Figures and deadlines should be confirmed against the individual’s PA302 and current GOV.UK guidance.