Number facing year-end tax demands could rise to 2 million

More than 1.3 million people received HMRC 'simple assessment' year-end tax demands in 2023/24, and figures obtained via a Freedom of Information request by Steve Webb indicate the total could approach two million as state pension increases push some incomes above the frozen £12,570 personal allowance.

HMRC has sent increasing numbers of 'simple assessment' year-end tax demands to people with relatively straightforward tax affairs. More than 1.3 million received such demands in 2023/24, and a Freedom of Information response obtained by former pensions minister Steve Webb suggests the number could approach two million. The rise is linked to state pension increases that are nudging some incomes above the frozen £12,570 personal allowance. The Government said in the Budget it is exploring ways to avoid small tax bills for some pensioners from 2027/28, though detailed proposals have not been announced. Key facts: - More than 1.3 million people received HMRC 'simple assessment' demands in 2023/24. - Figures obtained via a Freedom of Information request indicate the total could pass two million. - The personal allowance is frozen at £12,570 while state pension rises have pushed some pensioners above that threshold. - The Government has said it is exploring options to prevent small tax bills for a subset of pensioners from 2027/28. Summary: More people, particularly some state pensioners, are receiving HMRC end-of-year tax demands as pension increases bring incomes above the frozen personal allowance. The Government has indicated it will look at measures from 2027/28 for a subset of pensioners, but wider change is undetermined at this time.