Despite HMRC claiming to be reducing the amount of post it sends, it is gearing up to send 1.4m letters to those not paying taxes through PAYE or self-assessment.
Simple assessments letters are not a new thing; they are sent every year to people that HMRC believe need a prompt to pay the correct tax, for example pensioners and side hustle earners.
The letters will include a detailed assessment of unpaid tax on income above the personal allowance threshold and will also inform the taxpayer on exactly how to pay it.
There are several reasons HMRC may contact individuals about this, including potential tax on interest from savings and dividends, people receiving tax free allowances they were not entitled to, and anyone with a second income earned and not taxed at source, such as rental income and online platform sales. This also includes any tax owed on pension income.
The deadline to pay due tax is 31 January 2026 so there is still plenty of time to prepare, but HMRC is also urging those that are contacted to do their own assessments of their records.
If there are any questions about the assessments, taxpayers must raise them with HMRC within 60 days of receiving the letter via the gov.uk website. If HMRC agrees with the proposed amendment then a second letter will be despatched with the correct calculations.
But, if HMRC does not agree then the decision can be appealed, but the taxpayer will only have 30 days to do this.
HMRC has been vocal about wanting to reduce the number of letters sent as it pushes to modernise its systems and force taxpayers online which it believes will save £50m by 2028/2029. This also includes sending texts and emails to taxpayers who are registered on the HMRC app; no-one else will be contacted this way.
Earlier this year, an HMRC spokesperson said: 'Like many financial services that customers will already be familiar with using, HMRC is moving towards using a primarily digital-based service, sharing new communications safely and securely in the HMRC app and online.
'We'll use email and SMS to prompt customers when there is something new to view in their account so they don't miss important information.'
Peter Nichols
Director BFN Accounts & Tax