Thousands of savers risk accidentally paying the same tax twice as HMRC sends out multiple demand letters. Some taxpayers who received a “simple assessment” letter from HMRC earlier this year could receive a second tax bill from next month.
The second letter will include savings tax, alongside amounts included in the original bill, even if the taxpayer has already made a payment.
What the second letter means
Joe Lytwyn, personal finance expert at thimbl.com, said: “Receiving a second tax bill can immediately make people think they owe another large payment, particularly when it comes from HMRC.
“But the important thing is not to automatically assume that the total shown on a new letter is the amount you still need to pay.
“If you've already made a payment towards an earlier assessment, check that against the figures shown in the latest letter.”
Simple assessment letters are sent when tax has not been collected through the PAYE system or self-assessment - such as if you owe tax from savings interest or a second job. Around 1.8 million simple assessments are expected to be sent out for the last tax year.
HMRC response and savings tax changes
A spokesman for HMRC said: “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.”
It comes as millions of savers face paying a higher rate of tax on their savings interest from next April. You have to pay tax when you earn over a certain amount in savings interest.
If you're a basic-rate taxpayer, you pay 20% tax when you earn more than £1,000 a year in interest - but from April 2027, this will rise to 22%. Higher-rate taxpayers pay 40% tax when they earn more than £500 in interest a year - this will go up to 42%. Additional rate taxpayers will see their tax rate on savings interest rise from 45% to 47%. The increases were confirmed in the Budget last year by then-Chancellor Rachel Reeves.
The number of savers paying tax on savings interest has more than tripled from 1.22 million in 2022-23 to 4.51 million in 2026-27.
