US UK Tax Returns Preparation: HMRC Simple Assessment PA302

An HMRC Simple Assessment, issued as form PA302, is a tax calculation HMRC raises from data it already holds — not a tax return you have filed. It carries its own payment date and a 60-day statutory query window. For anyone with US connections, it is never a substitute for Self Assessment, and accepting it quietly can create exposure on both sides of the Atlantic.

At Jungle Tax we see the same pattern every autumn. A client with a US passport, a US brokerage account and a UK pension receives a PA302, notices that the figure looks broadly plausible, pays it, and assumes HMRC has now “done” their year. It has not. A Simple Assessment is HMRC’s arithmetic on HMRC’s data. Where the correct US UK tax returns preparation position depends on income HMRC cannot see, on a treaty article, or on a foreign tax credit claim, the PA302 is at best incomplete and at worst wrong in your favour — which is the more dangerous outcome.

What exactly is a Simple Assessment, and why is it not a tax return?

Simple Assessment was introduced by Finance Act 2016 and took effect from April 2017. It inserted a new set of provisions into the Taxes Management Act 1970 that allow HMRC to assess an individual’s income tax or capital gains tax liability without ever issuing a notice to file, and without the taxpayer submitting anything at all.

The distinction is constitutional, not cosmetic. Self Assessment is a self-declared return: you state your income, you make your claims, and the figure is yours until HMRC challenges it within an enquiry window. A Simple Assessment inverts that. HMRC states the figure; you have a limited period in which to say it is wrong. Silence is agreement, and after the window closes the assessment is final and enforceable.

The statutory machinery behind the PA302

Understanding which section you are operating under determines what rights you actually have. The framework runs as follows.

• Section 28H TMA 1970 — defines the Simple Assessment for individuals, the circumstances in which HMRC may issue one, and what the notice must contain: the amount due, how it was calculated, and the information HMRC relied on.
• Section 28I TMA 1970 — the equivalent provision for trustees, which matters for family trusts and estates in administration where a US beneficiary is in the picture.
• Section 28J TMA 1970 — HMRC’s power to withdraw a Simple Assessment entirely.
• Section 8C TMA 1970 — allows HMRC to withdraw a notice to file a Self Assessment return before issuing a Simple Assessment. This is how a taxpayer who was in Self Assessment can be quietly moved out of it.
• Section 59BA TMA 1970 — sets the payment obligation and the due date for the assessed amount.
• Section 31AA TMA 1970 — the right to query the assessment, with power for HMRC to suspend or postpone collection while the query is considered.
• Section 7 TMA 1970 — the duty to notify chargeability, amended so that a Simple Assessment removes the duty only where it captures all of the income and gains in question.

That last point is the hinge on which almost every cross-border problem turns, and we return to it below.

Who is receiving PA302 letters, and why so many in 2026?

Simple Assessment was designed for people HMRC considers to have straightforward affairs: pensioners whose state pension exceeds their personal allowance, employees with an underpayment too large to code out, and individuals with untaxed savings or investment income that PAYE cannot capture. Broadly, HMRC turns to a Simple Assessment where the tax cannot be collected through a tax code — typically because the underpayment is too large to code out, or because there is insufficient PAYE income against which to code it.

Volumes have risen sharply. The freezing of the personal allowance against a rising state pension has pulled very large numbers of pensioners into charge on a few hundred pounds of income, and HMRC has industrialised the response. Reported figures for 2026 point to roughly 1.8 million Simple Assessment letters, with working-age recipients receiving them from late June 2026, pensioners from mid-August 2026, and a further tranche later in the year driven by bank and building society interest data.

That last tranche is the one that should concentrate the mind of any internationally mobile client. Bank and building society interest reporting feeds HMRC automatically. So, separately, does information exchanged under the Common Reporting Standard. When HMRC starts assessing on data it received rather than data you declared, the arrival of a PA302 tells you something useful: HMRC now has a view of your affairs, and it is a partial one.

Simple Assessment versus Self Assessment: what actually differs

The two systems are frequently described as interchangeable routes to the same number. They are not. The table below sets out the differences that matter when a US filing obligation sits alongside the UK one.

Feature	Simple Assessment (PA302)	Self Assessment (SA100)
Who states the figures	HMRC, from third-party and PAYE data	The taxpayer, on a filed return
Trigger	Issued unilaterally; cannot be requested	Notice to file, or taxpayer notifies chargeability
Filing deadline	None — there is nothing to file	31 October (paper) / 31 January (online)
Payment date	31 January following the tax year, or three months from issue if issued after 31 October	31 January, with payments on account where applicable
Window to correct	60 days to query under s.31AA	12 months from the filing date to amend
Right of appeal	Only after a query has been raised and finally answered	Against HMRC amendments, closure notices and discovery assessments
Foreign income pages (SA106)	Not available	Available
Residence, remittance and treaty pages (SA109)	Not available	Available
Foreign tax credit relief claim	Cannot be made	Claimed on the return
Evidence for a US Form 1116	The assessment and proof of payment only	Full return, computation and payment record

Why a PA302 is never a substitute for Self Assessment if you are US-connected

HMRC only assesses what it can see

A Simple Assessment is built from employer payroll data, DWP records, pension provider returns, and UK bank and building society interest reports. It is not built from your US brokerage statements, your K-1s, your US rental schedule, your Roth or traditional IRA distributions, your restricted stock vesting on a US payroll, or the gain on the Delaware LLC interest you sold in March.

None of that is HMRC failing. It is HMRC doing exactly what the statute permits: assessing on information held. The consequence is that a US person resident in the UK will very often receive a PA302 that is arithmetically correct on its own inputs and materially wrong as a statement of their UK liability. Paying it does not close the year. It closes only the part of the year HMRC happened to know about.

The claims a Simple Assessment cannot make

Because there is no return, there are no supplementary pages, and because there are no supplementary pages, there are no claims. A PA302 cannot carry a claim for foreign tax credit relief against US tax paid on the same income. It cannot make a split-year treatment claim for the year of arrival or departure. It cannot claim the Foreign Income and Gains regime that replaced the remittance basis from 6 April 2025. It cannot invoke a treaty article — for example to determine which state has primary taxing rights over a pension or a government-service salary. It cannot report a foreign capital loss election.

Every one of those claims requires a filed Self Assessment return, and several of them are subject to their own time limits which run independently of the 60-day query window. A client who accepts a PA302 in a year in which they should have claimed foreign tax credit relief may simply pay UK tax twice on income the US has already taxed, with no mechanism inside Simple Assessment to recover it. Where those claims are in play, the correct route is a properly prepared return — the discipline our US-UK tax accountants apply to every dual-filing year.

Section 7 notification of chargeability still applies

This is the point most generalist commentary gets wrong. It is often said that receiving a Simple Assessment removes the obligation to notify HMRC of chargeability. That is true only in a narrow sense. Section 7 TMA 1970 is disapplied where the Simple Assessment assesses the income and gains in question. Where you have chargeable income or gains the assessment does not cover, the duty to notify survives, and the deadline is 5 October following the end of the tax year.

Failure to notify carries penalties calculated on the potential lost revenue, and where the non-compliance involves offshore income, assets or transfers, penalty categories are uplifted — substantially so for jurisdictions with less transparent exchange arrangements. A US-connected taxpayer who received a PA302 covering their UK pension, paid it, and said nothing about a US investment account has a notification failure, not a settled year. The PA302 in the file will not help; if anything it evidences that HMRC opened a dialogue and the taxpayer answered incompletely.

The 60-day query window: how it actually works

Section 31AA TMA 1970 gives you the right to query a Simple Assessment. The statutory period is 60 days from the date the notice of assessment was issued, or such longer period as HMRC may allow. On receiving a query, HMRC must consider it and give a final response: confirming the assessment, issuing an amended assessment, or withdrawing it altogether. HMRC also has power to postpone collection while the query is considered. The official guidance for recipients sits at gov.uk/simple-assessment, and the statutory text at legislation.gov.uk, section 31AA TMA 1970.

The trap: there is no right of appeal until you have queried

This is the single most expensive misunderstanding in the area, and almost no consumer-facing page mentions it. HMRC’s own Appeals, Reviews and Tribunals Guidance states that where a customer disagrees with a Simple Assessment there is no right of appeal — and consequently no right of statutory review — unless a query has been raised under s.31AA and a final response has been given to that query.

In practice this means the sequence is rigid. Query first. Obtain a final response. Only then do the ordinary appeal and review rights against direct tax decisions become available, with the usual 30-day appeal period running from the decision appealed against. A taxpayer who writes a letter headed “appeal” and waits will find, months later, that they never entered the statutory process at all and that the assessment has become final. If a PA302 looks wrong, the first document out of the door must be a s.31AA query, framed as such.

What a properly constructed query contains

HMRC is being asked to displace its own data with yours. Assertion is not enough. A query that succeeds first time generally includes:

• The tax year, the 14-character payment reference beginning with “X” shown on the assessment, and your National Insurance number.
• A line-by-line reconciliation of each figure on the PA302 against source documents — P60s, P45s, P11Ds, pension provider statements, DWP state pension award letters, and bank interest certificates.
• The corrected figure for each disputed line, with the document that supports it attached and cross-referenced.
• Any income HMRC has omitted, disclosed proactively. Volunteering an omission inside the query is materially better than having it discovered later.
• Where the year genuinely requires a return — foreign income, treaty claims, residence questions — a request that the Simple Assessment be withdrawn under s.28J and that you be brought into Self Assessment instead.

Payment, postponement and interest

The payment date is 31 January following the end of the tax year where the assessment is issued before 31 October, and three months from the date of the letter where it is issued on or after that date. Raising a query can result in collection being postponed, but a postponement is not a cancellation. Where tax is ultimately due, late payment interest generally runs from the original due date, so a query that takes months to resolve does not stop the clock on the amount that turns out to be payable. Where the disputed element is modest and the cash-flow cost of interest exceeds the amount in dispute, paying on account while the query is considered is frequently the better commercial decision.

If the 60 days has already passed

The position is not necessarily hopeless. Section 31AA expressly contemplates “such longer period as HMRC may allow”, and HMRC retains the power under s.28J to withdraw an assessment. Late queries are accepted where there is a credible reason — and for internationally mobile clients there frequently is. Simple Assessments are issued to the address HMRC holds and are also posted to the Personal Tax Account and the HMRC app; the 60 days runs from the date of issue, not the date you read it. A taxpayer who moved to New York in the relevant year, never updated their address, and discovered the assessment when a debt letter followed has a genuine argument. Separately, HMRC generally has up to four years from the end of the tax year in which to issue a Simple Assessment, so assessments can and do arrive long after the year has been closed off mentally — and, more importantly, long after the corresponding US return was filed.

How a PA302 lands on your US return

This is where generalist UK guidance stops and the real cross-border work begins. A US citizen or green card holder remains within the US filing net wherever they live, so a change in UK tax is never a purely UK event.

Foreign tax credit timing: paid versus accrued

UK income tax assessed by a PA302 and actually paid is creditable foreign tax for US purposes, claimed on Form 1116. The mechanics of Form 1116 and the wider credit rules are set out in the IRS foreign tax credit guidance. The critical question is whether you claim on the cash basis or have elected the accrual basis. On the cash basis, the UK tax enters the US calculation in the year you pay the PA302, which may be one or two years after the UK year to which it relates — producing a credit in a US year with no matching income, and often an unusable credit that must be carried back one year or forward ten. On the accrual basis, the tax relates back to the UK year it was assessed for, which usually gives a cleaner match but requires the amount to be settled and, if it is not paid within the statutory period after the close of the relevant year, triggers its own consequences.

When the UK number changes: foreign tax redeterminations

A successful s.31AA query is, from the US perspective, a foreign tax redetermination. If a challenge produces an amended or withdrawn assessment after you have already claimed credit for the original figure, the US credit and the US tax liability must be recomputed. The IRS requires notification of a foreign tax redetermination, generally through an amended return with a revised Form 1116 and the supporting schedule identifying the redetermination, the dates and the amounts. Failure to notify the IRS of a refund of foreign tax or a change in the amount paid or accrued attracts a penalty absent reasonable cause.

The practical implication is uncomfortable and widely missed: winning a UK challenge can create a US obligation. It does not make the challenge wrong — it makes sequencing and record-keeping essential, and it is precisely why the UK query and the US filing position should be handled by the same team rather than two advisers who never speak. That joined-up handling is the substance of our cross-border tax work.

Limitation periods do not line up

A PA302 issued three years after the tax year can require a US amendment for a year that is approaching, or has passed, the ordinary US refund limitation period of three years from filing or two years from payment. There is a longer special period for claims attributable to foreign tax credits, which is why a late-arriving UK assessment often remains actionable in the US when an ordinary amendment would not be. Establishing which clock applies before you decide whether to challenge or accept the PA302 is a real part of the analysis, not an afterthought.

A worked sequence when a PA302 arrives

• Day 1 — diary the deadline. Record the date of issue on the letter and count 60 days. Record the payment date separately; they are different dates and both bind.
• Days 1–7 — reconcile. Rebuild each line from source documents. Identify not only what is overstated but what is missing.
• Days 1–7 — test the return question. Ask whether the year contains foreign income, a treaty position, a residence question or a gain HMRC cannot see. If it does, the answer is a Self Assessment return, not a corrected PA302.
• Days 7–21 — file the s.31AA query. Head it as a query under section 31AA TMA 1970. Attach the reconciliation and the evidence. Request postponement of collection if the disputed amount is material.
• In parallel — model the US side. Determine which US year the UK tax lands in, whether a credit is usable, and whether an amendment or redetermination notification will be required once the UK figure is final.
• On final response — decide. Accept the amended assessment, or lodge an appeal within 30 days now that appeal rights exist.
• After settlement — close the US loop. File any amended US return and redetermination statement, and retain proof of UK payment for the Form 1116 file.

When a PA302 is really a warning shot

For a meaningful minority of clients, the Simple Assessment is not the problem; it is the symptom. HMRC assessed interest on an account the client had not mentioned, which means the data reached HMRC through automatic reporting. If a UK account surfaced that way, the client should assume the equivalent US visibility exists: US persons must report foreign financial accounts on the FBAR and, where thresholds are met, specified foreign financial assets on Form 8938, with information also flowing to the IRS from foreign institutions.

Where the PA302 reveals that neither UK nor US filings have kept pace — unfiled UK returns, missed FBARs, an unreported UK pension or ISA on the US side — the correct response is a planned catch-up rather than a narrow reply to one letter. For non-wilful US non-compliance, the streamlined procedures remain the principal route, and preparation quality determines the outcome; that is the work we do through IRS streamlined filing. Attending to the 60-day window while leaving a multi-year exposure untouched is a false economy, and it is the single most common way a manageable position becomes an expensive one.

The short version

A PA302 is a calculation, not a return. It is issued on partial information, it binds after 60 days, it carries no appeal right until it has been queried, and it cannot carry a single one of the claims a US-connected taxpayer usually needs. Treat it as an invitation to prove your own numbers, on both sides of the Atlantic, and it is manageable. Treat it as a settled bill and it can quietly close a year that should have been reopened. Further reading across related filing positions is collected in our guides.

If a Simple Assessment has arrived and you hold US citizenship, a green card, or income and accounts on both sides of the Atlantic, the 60-day clock is already running. We will reconcile the assessment line by line, determine whether a query or a full Self Assessment return is the right response, and model the consequence for your US filing before anything is sent to HMRC. To discuss your position in confidence, contact our cross-border team for a private consultation.