HM Revenue and Customs (HMRC) has raised concerns by sending out multiple tax payment demands that could lead to thousands of savers paying twice for the same tax on savings interest. The issue stems from “simple assessment” tax bills dispatched to individuals, which may omit tax owed on interest earned from banks or building societies.
According to HMRC, from next month, some savers will receive a second tax demand that includes tax on savings interest in addition to the amount stated in the initial letter-even if that tax has already been paid. This has raised fears of inadvertent overpayment among account holders.
The number of savers liable to pay tax on savings interest has surged, more than tripling from 1.22 million in the 2022-23 tax year to an estimated 4.51 million in 2026-27.
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Joseph Adunse, a representative of the accountancy firm Moore Kingston Smith, expressed concern over the increased workload and financial strain this creates for taxpayers. He stated: “HMRC are creating more work for people, and potentially causing overpayments – these people won’t get automatic refunds. It’s surprising after the same issue took place last year. Surely there must be a way for HMRC to see that you’ve already paid? It would be more efficient to send out one bill, but HMRC wants to get tax in early.”
A Simple Assessment is issued if you owe tax for a previous year that hasn’t been collected through your tax code. At the end of each tax year, HMRC evaluates tax payments using data from employers, pension providers, banks, and building societies. If insufficient tax has been paid and cannot be recovered via the tax code, HMRC sends a Simple Assessment tax bill (also known as a PA302) by post or via the Personal Tax Account. The letter outlines the amount owed, how the figure was calculated, and payment instructions.
An HMRC spokesperson commented: “To prevent customers from overpaying, our letters now make clear that customers don’t need to pay the total tax shown if they’ve already made a payment towards a previous simple assessment bill from earlier in the year.”