What is a P800 tax calculation from HMRC and what should I do with it?

Full answer

Each year after the tax year ends (typically between June and November), HMRC sends P800 tax calculations to employees and pensioners whose tax has been deducted through PAYE. The P800 is a reconciliation -- comparing the tax HMRC believes you should have paid with the tax actually deducted by employers and pension providers. Why do tax underpayments or overpayments arise? -- Multiple employments or pension sources in the same year -- Starting or ending employment part-way through the year -- Incorrect tax code -- Receiving taxable benefits in kind -- Savings interest or dividend income not captured through PAYE -- The State Pension beginning mid-year If you have UNDERPAID If the P800 shows you owe tax: -- For underpayments of GBP 3,000 or less: HMRC usually adjusts your PAYE tax code for the following year to collect the debt (a "K code" or a reduced personal allowance reduces your take-home pay spread over 12 months) -- For underpayments above GBP 3,000: HMRC may issue a Simple Assessment letter asking you to pay directly -- For underpayments outside the PAYE window: HMRC may ask for direct payment by 31 January following If you have OVERPAID If the P800 shows HMRC owes you a refund: -- You may receive an invitation to claim online (through Personal Tax Account at gov.uk) where payment is made directly to your bank account -- Alternatively, HMRC may send a cheque automatically -- If no claim is made within 45 days, HMRC sends a cheque How to dispute a P800 If you believe the P800 is wrong: -- Check the income figures against your P60(s), P45(s) and employer payslips -- Contact HMRC by phone (0300 200 3300) or online within 60 days of receiving the P800 -- HMRC will review the figures and issue a revised calculation if appropriate P800 vs Self Assessment If you are registered for Self Assessment and file a tax return, you will NOT receive a P800 -- your SA return serves the same purpose. If you think you should be in Self Assessment (e.g., you have rental income, are self-employed, or earn over GBP 100,000), you should register rather than relying on a P800.

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