Tax Warning as HMRC Error Risks Double Payment
UK households are in 'real danger' of being billed twice for their tax due to an administrative error by HM Revenue and Customs (HMRC). The tax office has been sending out duplicate 'simple assessment' notices, creating widespread confusion and putting savers at significant risk of overpaying.
How the Duplicate Demand Crisis Unfolded
The problem emerged when HMRC began sending follow-up letters to many savers that incorrectly combined new charges on savings interest with amounts already included in earlier bills. These new notices show total figures that add both new and old tax liabilities together, even when the original payment has already been successfully processed.
Savers initially received their standard tax demands for the 2024-25 tax year. However, they were then sent a second 'simple assessment' tax demand that included both the tax owed on savings interest plus the amount from the first letter, regardless of whether this initial tax had already been paid.
Simple assessment is HMRC's method of collecting tax without requiring taxpayers to complete a full self-assessment return. This system is typically used for pensioners or employees who have underpaid their tax through PAYE.
Expert Warnings and HMRC's Flawed Solution
Tax experts have raised serious concerns about the potential for widespread financial harm. Joseph Adunse, a specialist from tax consultancy Moore Kingston Smith, cautioned about the 'real danger' that recipients of these secondary tax notices might 'panic' and pay the entire sum without realising they might owe nothing or only a fraction of the amount demanded.
'In the rush to collect as much tax as possible, HMRC has been sending several simple assessment letters to bewildered taxpayers,' Mr Adunse stated. He further explained: 'The problem is that the agency has bypassed its vast data warehouse and is sending affected taxpayers a total tax bill including tax that was demanded in an earlier letter.'
In guidance issued to accountants this month, HMRC acknowledged the problem and suggested that recipients of a second letter should deduct any tax already paid from the second total to determine their actual liability. However, experts warn that this places an unreasonable burden on confused taxpayers who may lack the confidence or understanding to perform these calculations correctly.
The situation leaves many savers, particularly those unfamiliar with tax processes, vulnerable to paying more than they owe. With the November 2025 deadline approaching, affected households are urged to carefully review any tax demands they receive and verify previous payments before settling their bills.
