P800 Tax Calculation Letter Explained: Refund, Underpayment or Nothing to Do
A P800 is HMRC's way of telling PAYE taxpayers they've paid the wrong amount of tax across the year. Here's what triggers one, how to read it, and what to do whether it shows a refund or a bill.
What Triggers a P800
Payroll error correction guide| Common trigger | Why it causes a mismatch |
|---|---|
| Changed job mid-year | Emergency or incorrect tax code applied for part of the year |
| Multiple jobs or pensions | Personal Allowance sometimes applied more than once across employments if codes aren't coordinated |
| Employment benefits (company car, medical insurance) | Estimated benefit value in your tax code differs from the actual P11D figure |
| Started or stopped work partway through the year | Cumulative PAYE calculation can under- or over-collect relative to full-year liability |
| State Pension started mid-year | Interaction between pension income and PAYE coding can be miscalculated initially |
Reading the Letter
A P800 shows, for the relevant tax year:
- Total income from each source (employment, pension, benefits)
- Total tax that should have been paid
- Total tax actually paid through PAYE
- The resulting refund or underpayment, and how HMRC proposes to resolve it
If You're Owed a Refund
- Check the calculation against your own P60 and payslips — confirm the income and tax figures match what you actually received.
- Claim online through your Personal Tax Account if a claim option is offered, which is typically the fastest route.
- If you don't claim within the window HMRC specifies, a cheque or automatic payment may follow, but this can take longer.
- Query anything that looks wrong directly with HMRC before accepting payment, since correcting an error afterward is more complicated than querying it upfront.
If You Owe Tax
- Check whether the underpayment resulted from an HMRC error you couldn't reasonably have spotted — this may support a case for Extra-Statutory Concession A19 relief, though it isn't automatic.
- If the debt stands, HMRC will typically propose collecting it via a tax code adjustment in a future year (spreading it over time) if you're still employed under PAYE.
- For larger amounts, or if you're no longer employed, HMRC may request direct payment or agree a payment plan.
- Address the underlying cause (e.g. get a second employment's tax code corrected) to avoid the same issue recurring the following year.
Why This Doesn't Apply to Self Assessment Filers
If you complete a Self Assessment return, your own return is the reconciliation mechanism — any refund or balancing payment is calculated and settled through the Self Assessment process itself, not via a separate P800 letter, which is specifically a PAYE-only mechanism for people who don't otherwise file a return.
Frequently asked questions
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