The number of people receiving end-of-year tax demands from HMRC has soared to over 1.3 million, with experts warning the figure could reach 2 million as the personal allowance freeze continues to affect state pensioners
James Rodger Content Editor
12:21, 06 Jan 2026
Over 1.3 million individuals have been hit with end-of-year tax demands from HMRC(Image: georgeclerk via Getty Images)
Over 1.3 million individuals have been hit with end-of-year tax demands from HMRC, according to a Freedom of Information (FOI) request submitted by LCP partner Steve Webb, which has highlighted a significant increase in those affected.
The FOI reveals that during the 2023/24 financial year, over 1.3 million people received such demands, nearly double the figure from just two years prior. A large proportion of these are for relatively minor amounts, with nearly a quarter being for less than £100, though almost a quarter exceed £1,000.
These bills impact those who have fairly straightforward tax affairs (thus not requiring a tax return) but where there is no PAYE code available to collect the tax due on their income. An example would be a state pensioner whose pension exceeds the tax threshold and therefore owes tax, but who doesn’t have a private pension and hence no PAYE code.
The freezing of the personal tax allowance has triggered this surge, with the number leaping from 758,000 in 2022/23 to 1,321,000 in 2023/24. (It should be noted that self-assessment demands for 2024/25 are issued during 2025/26, so final figures for 2024/25 are not yet available).
Given that the state pension has seen a further 13% increase between April 2023 and April 2025, it’s suggested that the number of people receiving simple assessment demands is likely to have risen even more and could surpass the 2 million mark, reports Birmingham Live.
Offering his perspective, former Liberal Democrat Pensions Minister Webb, who is now a partner at pension consultancy LCP, remarked: “For many people, having to deal with the tax office is a hassle they can do without. But 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”.