Question to the HM Treasury:

To ask His Majesty's Government what estimate they have made of the average cost to HM Revenue and Customs of issuing and collecting a Simple Assessment from a person over state pension age whose total income in 2027–28 falls within the Pension Tax Allowance withdrawal range of £13,037 to £13,319; and how that cost compares with the average amount of income tax collected from such a person.

HMRC does not hold estimates of the number of people over State Pension Age who will be required to complete a Self Assessment tax return for future years. Producing these estimates would require forecasting individual yearly circumstances over several tax years and then forecasting customer channels ‘for the first time.’

The government has introduced the Pension Tax Allowance (PTA) to reduce the disproportionate administrative burden of paying small amounts of tax for those with income up to the value of the full new State Pension in this Parliament. Most pensioners already pay tax on their income, including their State Pension where applicable. Depending on individual circumstances, tax can be collected through PAYE, Self Assessment or Simple Assessment.

It is estimated that, in 2027 to 2028, the PTA will mean that over 200,000 pensioners will not receive a Simple Assessment bill that they would have otherwise received.

HMRC takes a proportionate approach to the reporting of small amounts of income and collection of tax on those amounts.