PAYE tax refunds and underpayments
HMRC’s annual reconciliation of PAYE for the tax year 2015-16 is well under way. HMRC uses 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 uses the P800 form to inform taxpayers. HMRC expects to send all P800 forms by the end of September 2016 for those due a refund and by the end of October 2016 for anyone that has more tax to pay.
Most P800 forms are generated automatically by HMRC’s computer systems. Taxpayers that have paid too much tax, will be sent a cheque, 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 2017-18 annual tax code. 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.
We would strongly advise any taxpayer that receives a P800 form to ensure that the figures quoted are correct as there are many variables that could result in the P800 form being inaccurate. We would be happy to help you review your P800 form.