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PAYE Tax Refunds and Underpayments

By Laurence Vogel

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HMRC’s annual reconciliation of PAYE for the tax year 2014-15 is well under way. HMRC use salary and pension information to calculate if the correct amount of tax has been paid. Where the incorrect amount of tax has been paid, HMRC use the P800 form to inform taxpayers. The forms currently been sent show HMRC’s tax calculations in respect of the tax year ending 5 April 2015. HMRC expects to send all P800 forms by the end of September 2015.

Most P800 forms are generated automatically by HMRC’s computer systems. Taxpayers that have paid too much tax, will be sent a cheque, in most cases, within 14 working days from the receipt of a P800 Tax Calculation. Those that have paid too little tax will in most cases have the underpayment collected automatically through their 2016-17 annual tax code over 12 months. Where this is not possible, HMRC will contact taxpayers to discuss the available options to pay the tax outstanding. The recovery of tax underpaid can usually be spread over longer periods in cases of financial hardship.

Any taxpayer that receives a P800 form should check the figures quoted or take professional advice to ensure the amount of tax assessed for the year is correct.

Published August 2015