There’s been a surge in end of year tax demands with more than 1.3m being contacted by HMRC in 2023/24, nearly double the number just two years earlier.

The figures have been revealed through an FOI request tabled by LCP partner Steve Webb.

Many of the demands are for relatively small sums, with nearly a quarter being for under £100, though nearly a quarter are higher than £1,000.

Mr Webb said the issue relates to a process known as ‘simple assessment’, which is when HMRC does the calculations for people with no PAYE code or who don’t have complex tax affairs.

He said an example would be state pensioners whose pension is above the tax threshold and who owe tax, but who don’t have a private pension and hence no PAYE code.

Mr Webb said: “In cases like this HMRC does the calculations, in effect, fills in a tax return for people, and sends an end year demand.”

The numbers receiving such demands have fluctuated from year to year but averaged around 610,000 in the period 2017/18 to 2021/22 inclusive.

However, the freezing of the personal tax allowance has led to a surge, with the number jumping from 758,000 in 2022/23 to 1,321,000 in 2023/24.  

Another reason for the surge in numbers was the large increases in the state pension, which included an increase of 10.1% in April 2023.

With the state pension having risen a further 13% between April 2023 and April 2025, that suggests that the number of people receiving simple assessment demands is likely to have risen further and could pass the 2m mark, Mr Webb said.

He added: “The continued freezing of the income tax personal allowance means that the numbers getting unwelcome end-of-year tax demands have soared. 

“Many of these people will be pensioners whose only income is the state pension, and they now get an annual tax demand, with the amounts growing each year. 

“Although the Government has indicated it may address this issue for a subset of pensioners from 2027, a much wider-ranging solution is needed.”